Cross posted from RenounceUScitizenship
#americansabroad Does the Schumer bill provide incentives to renounce or incentives to remain a US citizen? Converse: isaacbrocksociety.com/2012/05/22/ex-…
— U.S. Citizen Abroad (@USCitizenAbroad) May 23, 2012
Schumer bill provides strong incentive to NOT pay the expatriation tax – isaacbrocksociety.com/2012/05/22/ex-… – but it’s stupid for other reasons too #FBAR
— U.S. Citizen Abroad (@USCitizenAbroad) May 22, 2012
The following comment from the Isaac Brock Society about the Schumer Casey Ex-Patriot Act is deserving of a separate post and discussion:
Interesting to see the various responses to the new bill on how it will affect renunciations.
@Eric: you quote Simon Black saying: “More importantly, this bill is also a major deterrent for people who are thinking about renouncing US citizenship today. The passage of this law will undoubtedly cause many people who were considering expatriation to abandon the idea altogether as the thought of being permanently barred from entry is too much to bear.”
@Gabriel says: “Previously I was conflicted about renouncing. I have no need of my citizenship, but it seemed foolish to close a door unnecessarily. Now the message is loud and clear – get out while you still can.”
Both are undoubtedly true. This will cause major anguish to people whose future will be profoundly altered by this bill in ways they are utterly unable to predict. Even the threat of banishment is cruel and unusual punishment. It has placed many many people, myself included, at a clear fork in the road of our lives.
I hear tell that many conservatives are furious about the bill and are letting Boehner know it. If he backs off his support for the bill, it won’t pass. Wouldn’t it be nice if we could all just put this catastrophe behind us and go back to the mere nightmare we were living in a few days ago?
Your thoughts and comments?
Thanks for posting the video. The audio was a little weak, but I was able to watch it. My favourite part was watching the anchors’ reactions. My impression is they think US tax policy DOES NOT encourage immigration and this politician is acting ridiculously.
There’s a version of the video here, with clearer audio:
http://www.bing.com/videos/watch/video/the-ex-patriot-act-aimed-at-facebooks-saverin/3xo5719x?cpkey=5433c839-10aa-4196-a534-db84ec82341b%7C%7C%7C%7C
At 05:01 you can clearly hear the Brit half of the presenter duo laughing at Casey’s overblown rhetoric. What pity these two didn’t put Casey on the spot more firmly.
Now, anyone up for a new abortion law, aimed at grandstanding Senators and retroactive to cover the past 65 years or so?
If anything we see the good Senator getting redfaced and mealy mouthed at the line of questioning that exposed his lack of logic.
The English presenter was perplexed by the Senator’s position. It was one of those “what are the Americans on about moments.”
The Ex-patriot Act to the presenters seemed so vindictive and short-sighted certainly lacking any sense of fair play. Congress left open a loop hole where someone could ex-patriot, and avoid capital gains taxes, However in Congress’s arrogance they never imagined anyone would renounce their US citizenship to avoid taxes. Well times have changed people are willing to do just that.
The Englishman didn’t seem to be in any rush to queue up and get his US passport.
The Senator doesn’t get it. The Congress made the rules, Saverin followed them, and got caught with their pants down. Now Senators Bemis and Butthead are retrospectively trying to change them in mid-stream to gain some cheap political shots.
I hope in future companies decide America is not the place for them and set up in Canada or Mexico via NAFTA instead.
Well we wait for next quarter’s renunciations report eagerly.
Got to love the British reporter’s expression when The Senator was going on about spitting on people!
Obama just finished peddling his “you’re the most free in America” rubbish at the US Air Force Academy until you want to emigrate and stop being liable to US taxes! It’s a joke.
http://valensiroselaw.blogspot.ca/2012/05/dramatic-rise-is-us-expatriations-may.html
Tuesday, May 22, 2012
‘Dramatic Rise is US Expatriations May Have its Roots in Foreign Asset Disclosure Laws’
by Geoffrey Weg
“The Federal Register does not reveal an individual citizen’s purpose for expatriation (nor is any citizen required to provide a reason to the government). However, for tax professionals, one huge change in tax law stands out like a sore thumb – FATCA – the Foreign Account Tax Compliance Act.”…..
….”both tax practitioners and US citizens living abroad now face a huge administrative burden in order to comply with FATCA. …… anecdotal evidence from tax practitioner and taxpayer advocate groups indicates that it is this burden – FATCA – that is directly responsible for the dramatic increase in US expatriation. “…..
“……..these are individuals with significant income and assets, and they are deciding to leave our country, taking their skills, assets and tax-paying abilities with them. Moreover, the number of people doing this is simply skyrocketing. If it continues, at some point there will be a noticeable impact on the US economy. Congress and the Department of Treasury should take this new trend seriously, and think long and hard about whether to continue to impose this burden on these taxpayers, and ultimately, on all Americans.”
The article seems also to say that it is only ‘covered’ expatriates that are listed in the Register – so that the real number is actually higher – as the IBS has speculated.
If you don’t like chuck you can “like” this Facebook page: chuck schumer=disgrace
Sorry I don’t know how to copy the link from my iPhone. The page was created over another boner of his, but it may be an opportunity to get our message out to more people.
In the link I posted above, http://valensiroselaw.blogspot.ca/2012/05/dramatic-rise-is-us-expatriations-may.html the dots are connected in terms of REPORTING and administrative burdens correlated with rising rates of expatriation, rather than concerns about TAX per se. Hope others will pick this up, and see that it is FATCA and the myriad of other ever-growing incomprehensible and labyrinthine extraterritorial reporting and layers of penalties that are driving people away from acquiring or keeping US citizenship.
@Badger, exactly!
On December 14, 2008 the New York Times published an article on Schumer’s role in the Wall Street meltdown. The article stated that Schumer embraced the industry’s free-market, deregulatory agenda more than any other Democrat in Congress, even backing measures now blamed for contributing to the financial crisis.[94] Schumer took steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees. He succeeded in limiting efforts to regulate credit-rating agencies. This article also charged that Schumer blocked ratings agencies reforms proposed by the Bush Administration and the Cox SEC.[94] [Wikipedia]
Socialist, commie? I think not. Just a moronic American.
@badger, This article is right on the stop. I can’t think of any other reason that could explain the sudden increase in expatriations. I believe that the additional revenue that FATCA could bring is smaller than the loss in revenue due to the expatriations. I guess Congress didn’t think that people would “dare” to leave the system. The biggest loss is to the US itself.
I meant to say “right on the spot”.
@badger: “If it continues, at some point there will be a noticeable impact on the US economy. ”
Previous idiotic tax laws have already done so, as Roger Conklin has amply described, but of course the adverse effects blend in with so many adverse effects from other factors that they are invariably blamed on the policies of the opposition party.
The result is the slow train wreck we are seeing now, with the locomotive crew blaming each other, blaming the previous crew, blaming the passengers who are jumping off, and oblivious to the fact that they took the wrong branch line long ago thinking it was a short cut to Utopia.
@foxy, @shadow, @mona, and @all, problem is that it is the other distorted sound-bites in the headlines that get repeated over and over – ex. Shulman’s repetition of the mantra that ‘customer satisfaction’ with the IRS is high (who and what was the sample?), or the mantra that those expatriating are doing so to avoid paying ‘their fair share’ of US taxes (when they already pay in their country of permanent residence or other citizenship), etc. very few other voices out there. : (
The fair share comment by Sen Casey just exemplifies his lack of understanding beyond US borders, he’s a true homelander. Senator of course we pay taxes abroad, but our fair share goes to the country of our residence (hint: other countries collect taxes too), and often more than US rates.
Senator Casey’s wikipedia page doesn’t mention anything about him going abroad even for college. it looks like his biggest “foreign adventure” was teaching 5th graders at an inner city Philadelphia school. Otherwise it’s probably swift Congressional trips abroad staying in nice hotels completely cut off from the locals wondering what all this foreign monopoly money is worth.
I guess that qualifies him to make judgements on ex-pat issues.
I believe Casey has done some foreign traveling. When asked by Charles Smolover whether he had ever visited Israel (October 2005 interview) Casey replied: “I’m happy to tell you that I’ll be making my first visit there this November. I’m really looking forward to it.”
So Eduardo’s additional punishment is designed to prevent him from investing in US companies. Wow, just wow.
Internet entrepreneurs looking to access Eduardo’s 2 billion dollars worth of capital would be smart to set up shop in Canada instead.
I run an Internet company from Canada. My American customers don’t even notice that I’m actually not in the US.
Congress just gave Canada a huge gift!
The CEO of Cisco said it is currently easier to do business in Canada and Russia than the United States. Awesome.
@all
Pick this video up at about the 4:30 mark. This is by far the best and most relevant part. What Casey says in response to the question of whether U.S. tax policies are causing people to leave:
“What we want in this country are people who are going to pay their taxes.”
Incredible, confirms the U.S. government sees the primary purpose of U.S. citizenship is to be a tax slave.
Also, this moron (Casey) goes on and on about how times are tough in Pennsylvania, the people are having a tough time. The subtext of this BS is that therefore, Saverin should have to pay.
No acknowledgement that he has already paid (or will pay a huge exit tax).
Incredibly, Casey is an example of the “envy specialists” who are running the U.S.
Just waiting for Obama to make this part of his “class warfare” theme.
http://youtu.be/7v14tsb6DHw
Eduardo seems to be saying that the primary reason he renounced his US citizenship is the fact that FATCA made it impossible to have more than a very basic bank account in Singapore. I think he has a good argument. Look at all the ordinary citizens who are renouncing because FATCA is causing them banking problems. A lawyer could go a long way with that in a court of law.
Remember Eduardo moved to Singapore in 2009. FATCA legislation didn’t happen until early 2010. He couldn’t have predicted that he would have these kinds of problems just being a US citizen. Who knows, he may not have renounced if it weren’t for FATCA. I wonder what Timothy Geithner has to say about it now. He didn’t care when ordinary US citizens were being denied bank accounts but when a billionaire renounces for the same reason you’d think an alarm would go off in his head. Gee why didn’t he see this coming? This is a great example of Karma. The US government messed relentlessly with the little guy and now the billionaire Gods are messing with them.
I think we’ll see more rich people following in Eduardo’s footsteps.
Instead of bringing in $8B in additional tax revenues over the next 10 years, FATCA could actually cost the US an additional $8B in revenue losses.
Congress never did a cost benefit analysis because they said all the cost would be paid by foreign banks. The Republicans should start demanding they do a cost benefit analysis of FATCA now. FATCA was passed by a Democrat controlled Congress.
I think it may amuse all concerned to know that the proposed legislation would rarely accomplish its intended objective of taxing covered expatriates on their capital gains. The provision applies only to US-source capital gains, and the capital gains of a covered expatriate living outside the US would very rarely have a US-source. In general, gain recognized by a nonresident alien from sales of non-inventory personal property would have a US source only if she or he had a “tax home” in the US. And while it so happens that I have a client who is a nonresident ailen but has a US “tax home,” it is extremely unusual.
So, the bottom line is that the proposed legislation is not only mean-spirited and ill-conceived on policy grounds, but also poorly thought out from a technical perspective.
@MIchael: Unfortunately, when someone is vindictive, they tend to lash out in a way that hurts them as much or more than it hurts others.
Congress would do well to remember what Mark Twain said: “Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured.”
Unfortunately, they are splashing that acid on all of us.
@Watcher: The Beatles Fool on the Hill is perfect! I never thought of that song in the context of Capitol Hill, but the lyrics are bang on! I wonder if Paul McCartney is affected by this. Isn’t his new wife an American millionaire? What about Ringo Starr? I believe he has homes in both US and Britain.
Do you think Paul and Ringo would reunite and dedicate a new version of Fool on the Hill to Schumler and Casey? Of course, I’m still trying to get Randy Bachman and Burton Cummings to rerecord American Woman to American Taxman with no success.