I haven’t been on the computer much today, and just getting around this evening to catching up. I noticed this story at NBC that was posted yesterday. I decided to have a read to see what he is up to.
By Tom Curry, NBC News national affairs writer
This article is probably a little dated now to waste much time commenting on. There are already 648 comments, and it may have run it’s course. Not many comments are inspiring or hopeful that folks are looking for a meaningful discussion of overseas issues. Frankly a lot are inane, or at least the ones that I have read. I wasn’t going to post anything, but this got me thinking about some of the specific points, questions or assurances that I might want Romney or Obama to address if one of them showed up in New Zealand asking me for my vote.
So, I have quickly (without much refinement) went ahead tonight and posted this below. It is probably an exercise in futility, as few will read it. It seems the NBC audience is just looking for quick cute or caustic partisan talking points. However, someone (like Tom Curry) might pause and give it consideration. You never know. It does give me something to link to later in tweets, blog comments and email, and I can keep working on it to make it more succinct. The NBC posting did not take the links that were embedded, but took everything else. See below:
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As an average middle-class person who until recently resided in New Zealand, Below are the 5 issues I would like to see Romney (or Obama) address and support if they (either one) want my vote in 2012.
If Romney were to adopt these issues, and Obama does not, in my opinion he would get a large majority of the overseas American vote which probably went to Obama last time. Obama has failed on his 2008 promises to Americans Aboard, which are provided here: http://bit.ly/P201Lw
Sadly, his Administration has turned Americans abroad into pariahs that financial institutions do not want to deal with any more. He has also unleashed the IRS to prosecute in a draconian and unjust way offshore accounts, by conflating Expat Minnows with Homeland Whales in a one size fits all penalty regime just because they both might have an offshore account. What is offshore to a homeland resident American, is “on shore” to an non U.S. resident American abroad. Separate issues, but the IRS treats and penalizes them the same.
The 5 key issues that I want a Candidate to address are these:
1. Eliminate the U.S. Citizenship taxation burden on Americans abroad, and adopt a Territorial Tax system just like the 50 states in the homeland do, as does every other OECD country in the world!!
Citizenship taxation, complexity, compliance cost and penalty risk is dramatically impacting US competitiveness overseas. America is an unique outlier in how it taxes its citizens. Allow Americans abroad to function on a level playing field with all other nationalities. They pay taxes in the country where they live, and should not be double taxed or administratively burdened in a way that no other nation’s citizens are.
Elimination of this requirement would allow Americans to move overseas more readily to create export jobs for the mainland. Just like the Chinese and Indians that go abroad and contribute the export boom back in their countries. The inability of Americans to start small businesses overseas, have joint partners, or take a job (like a salesman) for US Corporations is a direct contributor to the loss of US exports and significant contributor to US trade deficits.
2. Eliminate FBARs (Foreign Bank Account Reporting) for full time US Citizens, and U.S. Persons including the military who live, work, start businesses or are retired abroad.
This 1970 FBAR form was created to stop terrorist funding and money laundering from homeland Americans. It should have never been applied to its Citizens or U.S. Persons abroad in the first place. After almost 40 years of no enforcement, the IRS is currently using the very severe penalties for failure to file, as a bludgeoning tool to raise revenue on the backs of innocent Americans abroad who are not the target of the form in the first place. They never knew about its requirement.
3. Restrict the provisions of FATCA (Foreign Account Tax Compliance Act) included in the 2010 Hire Act to apply ‘only’ for homeland resident Americans/U.S. persons instead of for all Americans and U.S. Persons including green card holders and military personnel living everywhere on our little blue globe!
FATCA is an incredibly hubristic extra territorial Congressional legislation that is requiring all FFIs (Foreign Financial Institutions) to be IRS tax collectors and reporters. They have to set up expensive and cumbersome procedures to search out all Americans and U.S. Persons that are resident anywhere in the whole wide world.
The procedures are so onerous, hated, and expensive to FFIs, that many are just refusing to accept Americans and U.S. Persons any more. This is shutting Americans out of normal banking services and makes Americans pariahs that no one wants to deal with. See this recent example: http://bit.ly/OXbZWL
How can you live, pay bills, or run a business if you can’t have a normal checking account? Exchange cash on the black market street corner?
4. End the current IRS offshore jihad for valid US Citizens / U.S persons including military personnel living abroad. Restrict its application to US homeland residents, for which it was intended.
If any offshore Citizens / U.S. Persons are currently caught up in the ridiculously complex, onerous, inefficient, 2 year long, LCU (life credit Unit) sapping IRS offshore Voluntary Disclosure Program (OVDP)……,
,,,,,give them full amnesty for failures to file FBARS or submit tax returns. These have only recently been enforced under Bush appointed IRS Commissioner Doug Shulman in a very punitive and negative manner. End the penalties for these benign failures.
Special Note: Also, for immigrants to America, forgive the penalties for non willful failures to FBAR file forms, which they were never informed about in their “Welcome to America” State Department packages. (Still aren’t) Give them equal treatment with Timothy Greithner who had no penalties for his tax failures. Allow them an easy route to compliance by paying back taxes plus interest without stealing high percentages of their family savings in their homelands of India, China, Canada, Mexico, Iraq, Afghanistan, Kenya, etc.
Most homeland Americans are unaware that the IRS has been on this jihad for the past 3 years. If they have heard about it, they have some vague perception that it was about Rich Whales living in America who were hiding funds in secret Swiss offshore Accounts. Some definitely were, and this proposal is not about them.
Unfortunately, the IRS has not restricted itself to just resident Americans engaged in this evasion activity. In its global search it also applied severe FBAR penalties on Americans and U.S. Persons the world over who just had innocent accounts in their “on shore” banks where they live and work.
These IRS programs have unjustly separated significant amounts of retirement savings from benign Minnows who were not the Whale tax cheats the IRS was targeting. Commissioner Shulman has NOT been telling you and the press the full story of how “successful” these programs are, and at whose expense!
It is shameful how he has been conducting himself. He has refused to release even the most elementary statistics like how many had overseas addresses? What was the Minnow to Whale ratio in his programs, or what portion of revenue collected is taxes and what portion is penalties?
He has refused to address or respond to the “Bait and Switch” issue, as criticized in a Tax Advocate Directive (TAD) spelled out in item 5 below.
5. Promise to read and respond to the National Tax Payer Advocate Report by Nina Olson, which has been ignored by Commissioner Shulman and Congress. It lightlights many of the issues I have described in items 1-4. Here is a link to a copy: http://bit.ly/xIqDb7
In Conclusion: If either Candidate wakes up to the damage this current administration has done to the community of Americans abroad, and adopts these 5 recommendations, they might stem the rising tide of U.S. Citizens relinquishing or renouncing their citizenship.
It is NOT just the RICH who are figuring out that the cost vs benefit of the U.S. Passport in the past 3 years has become too high. An inflection point has been reached, and many are abandoning the little blue book. Not because they really want to, but in order to survive abroad, they have surrender their passport. http://bit.ly/KTlVT5
I know this doesn’t fit the popular narrative you hear in the MSM these days with sensational stories about Eduardo Saverin and Densie Rich fleeing America to save on Taxes. It is misplaced and WRONG emphasis!! Here is the real untold story of what is going on. It is not the taxes per se that people are fleeing. Rather, with the IRS offshore jihad against Citizens / U.S. Persons abroad, the FBARs, plus FATCA, it’s the tax complexity and penalties, stupid! 🙂