Professor Christians has released the paper that was the basis for her presentation at the Tax Conference on January 18, 2013. In order to listen/view her presentation see an earlier post with commentary on the Pepperdine Tax Conference.
Based on the video, what was extraordinary about the Conference attendees was that:
– at most half of them had heard of FATCA; and
– of those who who heard of it had little understanding of it.
What this means is that few in the “Homelander Elite Core” have any awareness of how much resentment FATCA is causing toward the US. Certainly the fastest growing and most articulate expression of anti-Americanism comes from US persons abroad. Gradually governments will become aware that US extraterriorial taxation steals from the treasuries of their countries. At some point this will result in even more diplomatic problems than exist today.
So, hang in! Keep the arguments coming. Work on educating the world. The US can have either FATCA or extraterritorial taxation, but not both. The rest of the world will not (in the long run) AT THEIR EXPENSE:
Root out US persons and turn them over to the IRS for processing when once processed the result will be a net loss to the Treasury of that other country. Here is what cooperation with FATCA means to Canada:
The Government of Canada agrees, that it will at the expense of the Government of Canada, identify US persons and then allow the US to extract wealth from the Canadian economy because they have identified those “taxic elements”. This is an accurate description of what FATCA really is.
In other words: The rest of the world, by cooperating with FATCA, is planning to commit suicide in order to avoid dying.
Perhaps in the interim, it would be wise for countries to not allow U.S. citizens to immigrate.
In any event, of interest in Professor Christian’s paper is:
Predictably, this has given rise to vociferous objection from parties who may not themselves even be subject to FATCA or its related reporting requirements, but who see the interaction of FATCA and citizenship-based taxation as an unnecessary affront to human mobility. To put this in international law terms, FATCA’s enforcement of citizenship-based taxation represents a violation of the duty of the US to “take into account the sovereign interests of other states, yet at the same time ensure that the interests of the forum state and of the international community are sufficiently heeded.”The violation arises because it involves aggressively pursuing people who live, work, and pay taxes in other countries based on their ongoing status as citizens or green card holders in the US, even if they also hold citizenship in the country of their residence.
Many such dual or multiple citizens may have lived for years and even decades without understanding their ongoing obligations to the US; some may not even have realized they had such status, because they may have—mistakenly—believed that citizenship required their affirmative consent or pursuit.
There are some fairly straightforward solutions to the citizenship-based jurisdiction reasonability problem, but they would require political appetite for tax reform that maybe lacking in the US. One solution is to reverse course incrementally by either exempting from reporting requirements any assets or accounts held in the same country as the owner’s residence, defined for these purposes under the normal international standard (such as that encompassed in the OECD Model tax convention).
That does not relieve the compliance burden of foreign institutions, but it does remove some of the stigma created by highlighting citizenship taxation via an already controversial expansion of the US tax jurisdiction. A related incremental move would be to move in the direction of the Stop Tax Haven Abuse Act by creating a “high tax country” kickout of sorts, which would exempt listed jurisdictions from FATCA all together. The US Treasury has already state that it will not consider such a move, so there are high political barriers to this solution even though it would accord with past international practice. Both of these incremental steps would move the US closer to the residence standards embraced by other countries including all of its developed country peers, and relieve some of the opposition to FATCA.
Pages 29 – 30
The U.S. can have FATCA or US person-based extraterritorial taxation, but it can’t have both!