By popular request, I am making a separate post on the second of a two part effort by Stephen Mopsick to focus attention on tax justice for U.S. Persons. His first related to American Citizens abroad, and was a posted here.
On his blog, which he just posted yesterday, is his call for tax justice for immigrants as related to FBAR penalties. I know that there are many immigrant who read here but do not comment, and would be interested in seeing this commentary. They might not have been following the references to this post in other threads, so pulling it out for attention. In it he writes:
The Plight of Recent Immigrants to the US: On top of all this, we are seeing an increasingly large number of a new class of people who are wondering how to be compliant with their taxes: recent immigrants to the United States who are otherwise squeaky clean tax compliant citizens who are only now learning that that bank account back home on which they have signing authority, may now be putting them at risk for confiscatory FBAR penalties.
Note: I have not received Steven’s permission to post his commentary in its entirety, so will just provide the link here. I highly recommend it contents for your attention.
Just Me,
Recent IRS’ new procedure for “low risk non-compliance” US expats with annual tax due of less $1500 should also include immigrants. They both have same disadvantage on discovery of filing requirement.
I made this comment to Mr. Mopsick’s excellent piece on tax justice for immigrants to the US.
Similarly,
from my email to Alberta, Canada Premier Alison Redford, Alberta Minister of Finance Doug Horner, my MLA Dr. David Swann and my Member of Parliament, Michelle Rempel,
@Calgary, excellent!
It’s much like an Isaac Brock Society post, probably like something even I myself wrote in the past: valuable information and interesting argumentation, damaged by the needless inclusion of jingoistic, fact-free rhetoric:
I understand that statements like this are socially acceptable in the U.S. and play well with the intended audience, but it is remarkably offensive to people in every other society which provides a good life to its members. (Incidentally, 50% more Americans obtained Hong Kong employment visas last year than Hong Kongers obtaining American employment visas.)
Not only is Mr. Mopsick’s statement demonstrably false, it is a perfect example of the precise attitude which got the US into its present taxation mess in the first place: the idea that all the other countries in the world are horrible places from which immigrants to the U.S. “escape” with all their savings in their pockets, leaving nothing behind which could possibly be the subject of Forms 3520/5471/8621/8865/8938/FBAR.
@Eric, nicely put, thank you. I too found the closing paragraph jarring and out of place. It’s so clearly false that it made me question the entire rest of the content. The article would have had much more impact if Steven had simply dropped the rhetoric.
This is a chance for the government to show the world that there really is a reason why America is the only country on the planet from which no one is trying to escape and so many are trying to get in.
Very well said indeed, I think most immigrants can not agree more.
Eric, your comment is exactly right. Mr. Mopsick lectures us on what are the appropriate limits of the conversation. Despite whatever good the rest of the article might do, this paragraph is a deeply offensive, ugly American type comment.
I live on a street of immigrants including myself. I don’t see a lot of these people trying to escape Canada to live in the US. A friend’s mother who is a couple years younger than me actually went down to the states to live, but she’s back. She’s from China.
I did manage to renounce my citizenship. I think I’ve escaped. Here’s how I would have written it:
The United States is the only G8 country in the world, from which thousands of people are renouncing their citizenship, but feels it must lie to cover up that fact.
“This is a chance for the government to show the world that there really is a
reason why America is the only country on the planet from which no one
is trying to escape and so many are trying to get in.”
Haha, this is patently false. I’m going to assume here that Steven is trying not to offend some people. However, all of the statistics point to the opposite happening. This site would probably not exist if this really were true.
@Petros,
I don’t see Mr. Mopsick is lecturing you folks (US expats) but US government. Of course people choose to come or leave — what Mr. Mopsick was trying to tell US government to make its policy more friendly — I really don’t see anything wrong.
@IJ, I wasn’t talking about his article, but when he lectures us on what content we can have at this blog.
It is interesting that Mr. Mopsick feels either (1) that he must appeal to the bigotry and ethnocentrism of Americans to get sane policy through; or (2) that there is nothing wrong with considering his own nationality to be superior to every other nationality in the world. Either he is appealing to bigots or he is one. But you are right, he’s done nothing wrong.
@Petros,
My first experience of Olympic game on TV was in 1988 when Ben Johnson won 100M gold. It was a big time proud Canadian story… He got a congratulation call from Brian Mulrone, then the Prime Minster…..
When the doping story came out, all the media started to use “Ben Johnson, a Jamaica Immigrant” — in fact I did not know he was an immigrant until then…
Would I call Canadians being snobby ? (at that time, I was a new immigrant, and I did feel that way).
@ij, I remember laughing about that at the time. Yes, everyone was really proud of him until the doping scandal, and then he was a Jamaican. They blamed Johnson when it was really the whole Canadian program that was at fault. Naturally, they were embarrassed.
Did you see recently that the National Post accused Ye Shiwen of doping only because nobody can swim that fast without doping. Commenters immediately denounced the journalist. In fact, one comment was better than the article itself. Ethnocentricism comes in all forms and everyone is susceptible to it. Canadians are not exempted. But sometimes its the Canadian inferiority complex, the little brother syndrome, that causes Canadians say the most embarrassing things.
One of the problems with concept of American exceptionalism is that it leads to bigotry. How many times did I get the message, because I renounced, that I was a coward or a traitor, that I shouldn’t let the door hit me on the way out. I understand. Americans are uncomfortable with the idea that there might be good places to live outside of the United States. That might shatter their illusions.
@Petros,
All Chinese athletes are professional — they have been trained/paid by the government. After winning the medals — they will get big time money award.
They were selected at early age and they were trained (very hard). Chinese athletes do have history of doping (in particular swimmers) so Ye might be treated unfairly.
You might have heard recent comment of Sen Reid on US Olympics team uniform (made in China), and he wanted to put them on fire and burn. I see a lot CNN readers comments on this story.
I was rather surprised by so many people negative to China. They were made in China — because it was cheap (or better quality for the same price).
What if they were made in Canada, or Mexico ?
The senator has no shame to spend money borrowed from China, what is really wrong for US athletes to wear Chinese made uniform ?
The way the US is going, expect the anti-Chinese rhetoric to become stronger. I was appalled by the article that I mentioned. Many nationalities have a history of doping, including Americans (e.g., Marion Jones). But the Chinese were ahead in the medals and there must have been some reason other than they were just simply better this time around.
The way the US is going, expect the anti-Chinese rhetoric to become stronger.
Yup, agreed 100%. Watch and see: China will become the next USSR in terms of major competitor with the US. The only problem I see with this is that the US tries to make its competitors into real enemies.
Sorry, this is not FATCA/FBAR related, just my opinion on how the US is.
I’ve been rooting for China not that I really care, but I was quite happy that China was ahead in the medal count, and now that that Phelps the bonger is done winning his swimming medals, perhaps China could pull ahead. If China won at basketball that would be a dream come true!
@Eric
I see Steven’s statement in context of the audience you are trying to reach. It is a marketing statement that appeals to the narrative that many people feel, and by the over all numbers, generally speaking, is still true. You just have to look at the Green Card lottery every year. Knowing what I know, I would like to WARN every applicant, but even forearmed with that knowledge, if you are applying from Southern Sudan, or rural China, you don’t care! 🙂 All you see the positive opportunities and not the possible negative consequences.
I agree with ij’s perspective here.
He would not be more effective by attacking his IRS audience or saying negative things about America in conclusion, so I just shrug it off, like I shrug off all advertising. He is saying, at least to my ears, “You, America, see yourself as exceptional, so treat immigrants with justice in light of your Exceptionalism national narrative.”
The sad thing is, in America, the audience generally is not receptive to the truth even when something is demonstratively provable as bad policy. Maybe that is generally true in all developed countries, where democratic politics and governing is seen as the sole game of the elites.
Even if both parties believe something, and support it, our politicians dare not say it publicly, as it will not be well received by the electorate. I was listening to a podcast yesterday that brought that point home to me, and reminded me how difficult the task of changing Citizenship taxation will be, as it goes against the populist ‘Exceptionalism’ narrative.
It is called Six Policies Economist love (and politicians hate)
While these 6 are U.S. Centric, (sorry “Annoyed” for inserting politics here) but I think the broader principle applies everywhere. I bet I could find 6 similar issues in New Zealand, Australia and Canada politics that Labor and Conservative parties would agree with, but would not sell, even if it is the truth and best for the country as a whole.
To be a message that will be well received, it has to be put into populist language, and I guess that is how I see Steven’s final comment. Doesn’t resonant with you, or me anymore, but it does with the American (IRS) audience. And as they always say about sales and marketing, “know your audience!” 🙂
Just my opinion, and I could be wrong!
*Just Me
What is interesting about those six policies is to the extent which Australia, Canada, and New Zealand have all gone in the direction of implementing them with cross party support.
1. Canada does not have and has never had a mortgage interest tax deduction
2. Canada does have a deduction for employer sponsored health benefits however, most health care is provide under the aegis of the single payer medicare system.
3. While Canada has not eliminated the Corporate Income Tax it has reduced it substantially at both the provincial and federal levels. Australia and New Zealand also while having higher corporate tax rates than Canada have more investment “friendly” CIT policies than the US(franking etc.)
4. Canada, Australia, and NZ all have broad based “GST” Consumption taxes with a low income credit. Personal income tax rates in all three countries remain relatively high but not that much in the context of undoing the Bush tax cuts and US state and local income tax.
5. Both Australia and New Zealand have either Emissions Trading or Carbon Taxation systems. The Canadian province of BC has a carbon tax and Alberta, Manitoba, Ontario, and Quebec all have some form of carbon pricing in place or underway.
6. Penalties for marijuana position are far less in Canada, Australia, and NZ. Industrial Hemp production is legal in all three countries. The “Drug War” is far less intense in all three.
@ Just Me: then my first option is correct: It is interesting that Mr. Mopsick feels either (1) that he must appeal to the bigotry and ethnocentrism of Americans to get sane policy through.
By the way, don’t feel like you have to ever apologize to “Annoyed”.
@Petros..
For Annoyed, I am just trying to show some harmless deference to a preference… 🙂
@Tim..
As I was listening to those 6, as was thinking about some of what you have said, especially related to the interest rate deductions or lack there of in NZ, Australia.
“Franking” is something you could never explain to an American! 🙂 And in Australia, the Conservative Johanny Howard sold the GST, on the promise of lowered income tax rates, but that quickly gets forgotten. I can’t imagine it being accepted in the U.S.
In NZ and Australia, they allow the interest deductions on rental property, and there is a lot of game playing there in the tax system, with interest only loans and “negative gearing,” as they call it. That one should go, and many would agree, but now it is so institutionalized and so many participate, that they would have a hard time dumping it.
There are other examples of changes that all agree with, but won’t happen. The Welfare payments with WINS in NZ and all the ‘wink wink’ cheating that occurs there, especially with small contractors working for cash while getting WINs payments. There is a lot of other gaming of the system. (It is the human condition) All agree it has to be changed, but doing it is a different thing. The out cry of the hardship on the poor, always pulls up the politician, and even the Nationals have not been able to change it.
The one major change I have seen in NZ, that went against populist opinion was the cold turkey elimination of farm subsidies in New Zealand, and that was done by a Labor government, even if it eliminated those wonderfully low milk rates for the poor. 8 cents a pint. Now it is $2 a liter, in a monopoly market place controlled by one major wholesale producer, Fonterra. They really control the retail price setting in the major grocery chains, many of them are owned by the same company.
*Perhaps you need to learn the story of Brian Mulroney and the Canadian GST. Mulroney did not so much “sell” the GST to the Canadian public as simply ram it down their throats. To be completely accurate Mulroney did promise to introduce the GST in his prior election platform the problem is no one noticed because in the 1988 election the main topic of dicussion was whether Canada should have a free trade agreement with the US or not. To the extent most American politicians are aware of Canadian politics circa 1990 I suspect they would take out of it the lesson that there is little or no personal gain for themselves in advocating for any type of “radical” tax changes(including the elimination of citizenship based taxation). Johnny Howard’s introduction of the GST is actually considered a “success” story compared to Mulroney’s
Here are some videos that show what things were like during the introduction of the Canadian GST:
http://www.cbc.ca/archives/categories/politics/federal-politics/federal-politics-general/mulroney-stacks-senate-to-pass-the-gst.html
http://www.cbc.ca/archives/categories/politics/federal-politics/federal-politics-general/1990-canadians-to-face-more-taxes-with-the-new-gst.html
*Now more recently the “second” phase of the original GST “plan” was enacted when Ontario eliminated its retail sales tax in favor of a “Harmonized” VAT combined with and based of the Federal GST. Videos below:
Sorry for being off topic with this specific thread. Feel free to move it to its own post if you wish.
Talking about bipartisan populist measures, I just came across this:
France goes solo on FTT
France is enacting, as of August 1st a 0.2% Financial Transaction Tax, to be levied on transactions in French securities where stock market capitalization exceeds EUR1.23bn and a 0.01% tax is to be levied on credit default swaps and on speculative “automated” trading.
That was voted with big bipartisan support and labelled as “moral”.
I am not sure what the impact of this new tax will be and if it will be followed by other European countries.
*Christophe
All of this FATCA included is tied back to the 2008 Financial Crisis. You have to look FATCA from a US government to bank perspective and not so much from a US government to individual perspective.
@ Christophe
But American banks complained and so the French modified the law to suit them….
Taxe sur les transactions
financières : sursis pour les actions américaines
http://www.lemonde.fr/economie/article/2012/07/31/taxe-sur-les-transactions-financieres-les-actions-americaines-obtiennent-un-sursis_1740683_3234.html