When will the fools wake up and repeal FATCA?
Thanks to low domestic savings rates and profligate government spending, the U.S. economy is reliant on continuous influxes of foreign investment to provide the capital necessary for growth. Yet no doubt thanks in part to FATCA, foreign direct investment in the US for the first half of 2012 declined by 39.2% over the prior year, and China surpassed the US as the world’s largest recipient of global foreign direct investment for the first time since 2003.
*”Still another predictable result of the law is that the FFIs and their clients will pull capital from the U.S. even if they have to invest in smaller and less lucrative markets.”
Even though I am a minnow and a tiny one at that, this is what I am in the process of doing with the ultimate goal of renouncing and never having anything to do with the US again if possible.
Imagine how this will spread with people and corporations who actually have real money…
In behaviour typical to the US, they’ll repeal it only after irreparable damage has been done to themselves and others.
@Suki,
I’ve done the same — no US investments. I have no interest in US cross-border shopping, US tourism, US snowbirding, or anything else that sucks my Canadian $$ out of the Canadian economy and gives to the US economy. I’m a minnow too, so my protest doesn’t mean a lot, but multiplied by the number of us in Canada (and elsewhere), it could mean much more. It just makes me feel better.
I was reading recently that about 7000 smaller US banks are going to go out of business soon under the weight of US regulations. These US banks haven’t even begun to think about FATCA yet … that’ll be the final nail in their coffin. Imagine trying to look for foreign account holders not just from one country but every country in the world.
As awful as it is for banks in Canada and other countries to be on the lookout for US account holders, the US banks would have to do the same for almost 200 countries. Not going to happen.
I wonder if that 39.2% decline in foreign investment might also have to do with the fact that the Treasury has been floating the idea of reciprocity in the last year to get other countries to go along with FATCA.
As everybody knows there is alot of money that ends up in the US from foreign countries especially in the southern states like Florida. Alot of this money comes from Latin countries. Some Florida banks may have as much 80% of their deposits from foreigners.
Remember when Marco Rubio wrote an article in a Miami newspaper where he warned that money would start to leave the US if this FATCA thing wasn’t stopped? Well looks like he was right. That Emily S. McMahon (or whatever her name is) from the Treasury department said there was no evidence that would happen. Well now there’s evidence! Somebody should fire that woman.
*Read the this Forbes article on this subject. I have posted my comment wih this article so click on “Comments” after you have read the article. Andy Quinn, author of this article, is right on target.
http://www.forbes.com/sites/realspin/2012/11/20/coerced-foreign-tax-compliance-is-killing-american-jobs/
@Roger
Well said. I wonder who might respond with “good riddance to US exports”?
US policy making does not generally work for the good of the people and the country, but rather for the good of politicians’ reelection (preservation of power). This is why the US political establishment comes up with erratic laws that harms the country and there is no remedial element available for this.
In Switzerland, a real democracy, this flaw is absent as the final say of any law drafted by legislators rests with the people who can challenge or create any legislation via referendums. Thus, reelection becomes pointless (compared with the US) as power ultimately rests with the people.
US was ranked 7th in Global competitiveness and Switzerland was ranked 1st. For all of the economic flaws and political/social problems the US has, Switzerland is experiencing the exact opposite.
What sane individual with US and Swiss citizenship would find any microscopic inch of value/benefit in retaining a US passport?
*Let’s face it, we know the Treasury is just dangling the FATCA reciprocation idea as a way to get other governments to do what they want and report on US citizens “hiding away their ill-gotten gains”. When it actually comes to passing on info on citizens from other countries they’ll simply not bother. America wants everyone to pander to them without giving anything in return. If any country ever gets a tiny bit of info on their citizens from the US I’ll fall down in shock and die.
The comments so far (2) are as good as the article. From the second:
“Only a government without a scintilla of national pride or dignity would accede to such a preposterous demand.”
Excellent comment, Roger, on the Forbes article which I found to be pretty well written except for this …
“And while the U.S. tax code is hardly a model, it’s generally less bad than other industrialized nations.”
That one made my eyes pop and my head shake. What other “industrialized nation” has a tax code 70,000 freaky pages long???!!! It’s not Canada that’s for sure. (To be clear — my comment refers to the Forbes article NOT Roger’s comment on the Forbes article.)
anybody remember where that profile of americans overseas is at? I am searching around the flophouse and haven’t found it in there yet, as I can’t remember what month it was. I’m leaving Mayberry tomorrow and going in to the state capitol to drop into some US legislator offices.
the one about what a typical US person abroad is (not a FATCAT). It was broken down in categories, it was someone’s study
@mark twain:
This NY Times article mentions contents of the Judith Murray and Amanda Klekowski von Koppenfels academic studies on US expats:
http://www.nytimes.com/2012/08/27/us/politics/votes-from-expatriates-could-play-crucial-role-in-election.html
My imperfect memory has a picture of something with no mention of politics, just that it was a pure discussion and graphs by a scholarly study.
@mark,
This isn’t what you’re looking for but I will send it anyway (map and number of Americans Abroad): http://www.aaro.org/about-aaro/6m-americans-abroad.
Nice to see you posting again omghesstillanamerican. 🙂
The decline in the US’s direct foreign investment is covered in the Chinadaily USA with some optimism that the US might move toward recovery in the second half of 2012:
http://usa.chinadaily.com.cn/business/2012-10/25/content_15847821.htm
“FDI flows will, at best, level off in 2012 at slightly below $1.6 trillion because the slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes continue to reinforce the wait-and-see attitude of many transnational companies toward investment abroad,” the UNCTAD projected.
FDI inflows to the EU declined by 3.8 percent year-on-year to $175.9 billion for the first half of 2012 while inflows to North America were down by more than one-third due to a dramatic 39.2 percent year-on-year fall in inflows to the US, according to the report.
However, the UNCTAD also said that “FDI flows to the US might be stronger in the second half of 2012” in view of early indications.
The value of cross-border mergers and acquisitions in the US in the third quarter of 2012 were double those of the first half of the year, while some further acquisitions are “already taking place or announced in the fourth quarter”, according to the report.”
Thanks nobledreamer. I’ve been staying away for a while because a) I can’t keep up with all the posting and b) it often makes me more anxious.
But I miss all of you guys so I do pop in now and then.
In my heart I know everything will work out in our favor but boy it’s taking long enough.
Agreed, nobledreamer. I miss the person who was the inspiration of ‘the OMG moment’ term — we all know what that is for each of us. Good to see you commenting, omghestillanamerican or OMG for short.
Roger Conklin had a summary of this in its previous times, does he or anyone remember where it is?
Roger discusses this subject lots.
Maybe you’d like some of his comments at: http://isaacbrocksociety.ca/2012/11/17/full-disclosure-needed-just-what-is-us-tax-compliance-requirement-for-albertas-recruitment-of-oilsands-workers/
Pingback: Roger Conklin on the stupidity of US tax law « Freedom from the tyranny of U.S. citizenship-based taxation for U.S. and dual citizens outside the U.S.
Thought I would add this story that was published yesterday in The Independent
Land of the flee: why, despite Obama’s re-election, Americans are renouncing citizenship in droves
Since President Obama took office in January 2008, nearly 5,000 people have voluntarily surrendered their American passports, according to data made available by The United States Office of the Federal Register. Last year alone, nearly 1,800 US citizens went rogue, compared to about 230 four years ago. Renunciation figures shot up shortly after the UBS scandal of 2008, when the Swiss bank was caught helping thousands of Americans evade taxes, a revelation that led to tighter restrictions on overseas bank accounts. Many in the expat community believe that the US government has gone too far in its monitoring of foreign bank accounts and taxing on assets and worldwide income. And for the defectors, financial freedom has become more important than heritage.
That’s a good Forbes article. The author did a great job of hitting every angle. I had my own suspicions as well about “compliance firms” making a lot of money over the FATCA. I seriously doubt that any compliance person cares about our lives since their paychecks are on the line.