Deckard writes of a major irony in the position (or non-position) of Democrats Abroad on FATCA and related issues:
I believe that one of the ironic consequences of our situation is that Democrats Abroad, and others analogous to it, such as Republicans Abroad, shall soon be facing unprecedented existential crises. If FATCA continues to unfold as its architects wish it to then there may be no more than this current generation left to even attend DA meetings and events. Instead, they may begin to resemble lonely Legion halls with a dwindling membership of WWII vets.
Once FATCA begins to be fully implemented, younger Democrats Abroad will be faced with a stark choice: either shed themselves of their now-toxic U.S. citizenship which their parents so lovingly transmitted to them, with all the best intentions – or face a bleak future of financial ruin in their adopted countries because of a crippling inability to participate in the essential tax-deferral vehicles they need to build a secure retirement. Of course, the third choice would be to abandon their overseas homes completely, where they were very likely born, and run headlong into the full embrace of the Homeland, leaving their friends and family behind forever.
I attended the Inaugural Ball celebration at the local chapter of Democrats Abroad last night and I saw very few people under the age of 50 in attendance. If that is the current, baseline demographic for this organization then I would have to conclude that its days may very well be numbered.
I was struck last night at the passion with which one of the organizers spoke of the chapter’s me-too support of new gun-control legislation in the U.S. I could not help but marvel at the irony of an overseas American organization choosing to focus on an almost entirely domestic American issue at the expense of issues that will be of far more immediate and personal consequence to their own lives in the coming years. No one spoke of FATCA, and the destructive scourge of citizenship-based taxation, even though this issue should remain at the very top of DA’s agenda for years to come.
I know that Joe Green is DA’s Canadian point-man for the FATCA/FBAR task force, but it seems that he is the only one in the organization who’s showing any real interest in the topic. Everyone else is blithely enjoying their little get-togethers and making themselves feel good about supporting a few easy motherhood issues from afar, all the while ignoring the ugly, dangerous reality that lies right before their very eyes, on this side of the border. If Democrats Abroad remains blind to where its energies most urgently need to be directed, and if it cannot muster enough confidence to forthrightly speak truth to power, then I believe it is truly doomed and will soon be a footnote to history.
Deckard originally wrote his above observations, in reply a comment to Michael on another thread, which read:
I am a member of Democrats Abroad. I voted for Obama because I agree with him on more issues than I do with the Republicans. At the same time I disagree with FATCA and citizenship-based taxation and enjoy the IBS website. If IBS wants to be as effective as possible in reaching out on citizenship-based taxation — which, like government raids and government overreach, precedes Obama — I would urge you to be more politically inclusive.
Thanks to Michael for his comment as well as to Deckard for his lengthy reply to it. It’s an important matter worthy of focus and exchange of ideas and opinions.
From Shadow Raider.
The Republican Party is seeking comments from the public on what it did wrong in the last election and how it can improve. The survey requires a zip code but I suppose you can use the last one you had.
http://news.yahoo.com/blogs/ticket/republican-party-seeks-learn-mistakes-wants-help-193757378–election.html
http://growthopp.gop.com/default.aspx?s=pro
This is a real opportunity to reach decision makers, regardless of your current affiliation. For those where renunciation is not an option and compliance is ludicrous, changing the law is the only hope.
*If you a US citizen who has never lived in the US and therefore never had a zip code, you can try and see if the survey system will accept your survey by just using a random 5-digit phony zip code. Some will and some won’t.
*I just completed and submitted this Republican survey. On the last page I gave them an earfull on the absolute disdain of the party for the 7 million Americans who live and work abroad.
On the page there is also
Email Us Your Thoughts at GOProject@gop.com.
where I submitted my thoughts.
I mentioned that they missed their opportunity in 2012, despite all of our letters giving them a chance.
*As much as I would like to hope otherwise, I am afraid that there is nothing Carter can personally do to change the attitude of the Democratic party leadership towards Americans who live outside of the United States. With the attitutude the permeates that party and overflows well beyond party lines to the US population in general that any American who would willingly live abroad must be a traitor and a tax cheat, Carter taking a position different from that would not help Democrats win national elections. It would help gain votes of those who live abroad but it could end up costing them votes at home. After all no American in his right mind could possibly ever live anywhere but in the USA unless he had something to hide.
Incidentally, Carter’s wife’s uncle was an expat. When he was campaigning for president Carter and his wife made a visit to Brazil. We lived there at the time and I rember it well. While there they visited the cemetery in Americana, a city in the state of Sao Paulo which was founded by Americans from the Confederacy who, at the end of the Civil War, emigrated with their slaves to Brazil. Most were from South Carolina and they had been recruited by Dom Pedro II, the emperor of Brazil, to colonize the vast fertile land that was available practically for free.
The Carter’s visited the local cemetery and found the grave of Rosalyn’s uncle (or great uncle, I forget which) who had been among those who left South Carolina for good and started a new life in Brazil. He probably did not renounce his citizenship because it was not necessary in those days in order for an American to survive living in another country. That was before there was an IRS. Americana today is a city of 250,000 population where there is still a good sprinkling of names like Smith, Jones and Brown in the telephone directory, and where the English of South Carolina of 130 years ago is spoken when the descendants of those early immigrants to Brazil get together to comemorate their heritage.
How tragic it is today that today’s fiscal policies with respect to its expatriates and their descendents force them to renounce US citizenship in order to just survive living in another country.
*This quote from George Orwell’s essay “Notes on Nationalism” helps a lot in understanding why US homelanders, and even expatriates like Democrats Abroad, are apparently blind to the negative aspects of extra-territorial taxation and related policies such as FATCA:
I think people on both sides of the extra-territorial-taxation issue could benefit from reading that essay, which can be found on the internet. We who have adopted Canadian and other non-US nationalities are probably similarly blind to some facts that may seem obvious to US nationalists. (Not that I think extra-territorial taxation and FATCA are good things!) It would be helpful to keep in mind that nationalistic loyalties or hatreds are ideologies, which, like all ideologies, are theories that prejudice our understanding of truth.
If we are interested in being guided by useful, empirical facts, we should always be willing to revise our theories on the basis of new evidence. Yet, paradoxically, one demonstrable fact of human nature is that most of us (including me) are reluctant or unwilling to acknowledge evidence that contradicts our favorite theories.
So, although we here at Brock experience the negative effects of US extra-territorial taxation policies first hand, it doesn’t surprise me that most US nationalists don’t understand our position and aren’t even interested in hearing about it. For them to admit to negative effects of US policies is almost impossible. The only possible way to get them interested would be to persuade them that they, personally, could be negatively affected by those policies, and that’s very hard to do.
*@anonjAnon. Sound thinking and good advice for all of us. I will follow your suggestion, ind it and read it. I remember vividly the movie I saw in 1955 based on Orwell’s book Animal Farm, where the pigs took over the property from its owners and proclaimed tat all were equal, but some were more equal than others.
Interesting note @AnonAnon, re Orwell. And, it is true about human nature. When I read US government justifications of extraterritorial citizenship-based taxation, they do not use facts or references to support their claims. They just make statements. This is their creed. Some perhaps see its limitations when gross contradictions and real life examples surface, but they just rationalize that if you want to make an omelette, you have to break some eggs. And, we are those eggs. We are out of sight and out of mind – except as revenue on legs.
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@AnonAnon
Thank you for a very good description of the “bubble” that we as human beings should strive to avoid enveloping ourselves in. That fact that I’ve for the first time in my life been victimized and persecuted (and by my own country no less) has changed my perception of the world around me. The US’s treatment of it’s own citizens is repugnant, and if Canada follows the same course by facilitating the US, there’s no predicting how this betrayal will effect the many of us. Could the compounding persecution skew the thinking of a few, if it hasn’t already?
@bubblebustin—-this isn’t what I had been taught in Govt class in high school, or all the crap I learned in grade school and junior high.
@Mark Twain
Maybe you’re getting ‘un-skewed’.
@bubblebustin, re; “The US’s treatment of it’s own citizens is repugnant, and if Canada
follows the same course by facilitating the US, there’s no predicting
how this betrayal will effect the many of us. Could the compounding
persecution skew the thinking of a few, if it hasn’t already?”
I’d say more than a few.
And I actually wonder, if more of us are forcibly outed under a FATCA IGA, if this will not come back to bite the federal Conservatives and Canadian banks and financial institutions permanently. If they back us into a corner, and we have nothing to lose by demonstrating in public, and picketing the US embassy and other sites, and nothing to lose by coming forward and making lots of public noise, then that brings something out into the light of day that they all seem to want to remain hidden. The CBA and our federal government are not putting notices in the Globe and the Star to alert us or solicit public commentary.
You have to wonder why no public coverage of FATCA? Obviously Canada does not want it brought to light either. And, what if we do manage to attack FATCA as unconstitutional and as illegal under the Charter, and NAFTA, etc.? And as possibly not even a legitimate US agreement (as per Prof. Christian’s opinion). And, at the same time, start attacking the flawed nature of the ‘reciprocal’ tax agreement that Canada already has with the US? And tell everyone that over 1 million of our Canadian homes are claimed as subject to US taxation? Our homes, and our savings, and our children are something that everyone can understand us fighting for. We might be able to win a PR battle in Canada.
The battle isn’t just won via the law, it is won in the minds of the public. FATCA has NO upside in a public relations sense for Harper and Flaherty in Canada. Unless they want to start saying that > 1000,000. in Canada are money laundering criminals, and that Canadian banks have been ‘hiding’ us. The US has been able to push FATCA stateside because US residents don’t care about us, and because the IRS and Treasury and Congress are happy to slander us if it helps justify what they want to do, but I don’t think that will work as well in Canada. What PR ploy can Flaherty and Harper use to rationalize FATCA – a US law, in Canada? They also have to get over the hurdle of answering questions as to all the costs of implementation – as an eternal commitment to the US.
This has already affected my level of cynicism and mistrust of politicians and the political process. Because the Finance Minister and the Canadian Federal government have not made public the implications of enabling FATCA in Canada, and have buried the notice on the Finance dept. site, and act as if it is a foregone conclusion that we have no right to comment on or reject; I am hard put not to view my relationship to Canada with some new cynicism. Two countries formally register and recognize my allegiance and my relationship to them as a citizen, but apparently, neither one owes me as a citizen a duty of care or reciprocal responsibility. Neither is acting as a democracy in the way in which this is playing out. Both apparently don’t care what will happen to a million or more who may be about to be flayed alive by the US Treasury.
Just the very real possibility that both Canada and the US don’t give a fig for those citizens and residents and families who are squeezed between them – through the essential conflicts between the two systems of taxation and citizenship laws have only increased my wariness of government and politicians. It is what is politically expedient that rules. It is the powerful and influential interests (ex. the CBA and financial institutions) that rule. It is oil and resource extraction interests that rule. I was never in doubt about this before, but this particular taxation and treaty angle is an arena that had never occurred to me to consider before – because I didn’t know the ramifications and fine details of US citizenship-based extraterritorial taxation.
I also didn’t know before that my birth citizenship had become a trap and a shackle.
The Canadian federal government has a duty of care to its citizens and residents. If it feels that the interests of the majority of Canadians is better served by bending over for the US re FATCA, and also re the huge gaping holes in our so-called ‘reciprocal’ tax treaty (re the savings clause, last in time rule, taxation of TFSAs and the like, taxation of our primary residence…) then it should at least have the guts and gonads to say that out loud in public instead of skulking about making deals in the backroom – that will bind us to the US more firmly, forever.
In this situation, silence makes Canada complicit with what the US is doing to us, and also becomes yet another obstacle to letting us decipher where we truly stand. If we know the real deal, we can make our own decisions – based on knowing that under FATCA, BOTH Canada AND the US would be allied against us – collaborating on enabling and further institutionalizing US citizenship-based double taxation.
Flaherty led us to believe that Canada was going to show some backbone and protect its citizens and residents, but that turns into entrapment and collusion via FATCA, if we relied on his public position and he doesn’t deliver. And to some extent, he had to have known that the tax treaty he has continued to negotiate changes to, since 2008, has always contained the serious fundamental flaws that we have discovered by accident. If he – and all the previous Canadian finance ministers had publicized that, we could have tried to protect ourselves before.
His continued marketing of the TFSA and RESP and other registered savings, to ALL those in Canada – knowing how the US treats them as toxic taxable ‘foreign trusts’ – and knowing now how truly difficult it is to get rid of US citizenship, means that he is committing a sin of omission towards > 1,000,000. in Canada.
Whether through Canadian federal government complacency (as the US hadn’t ramped up FBAR and filing enforcement to this level before), or through not truly understanding just what a potential train wreck was being engineered by the US for those in Canada and elsewhere, we had absolutely no warning from our own country of permanent residence and birth or citizenship by oath.
We became Canadian citizens and residents in good faith.
Was that faith misplaced?
@all, I posted this link on another IBS thread too, but it may be buried there. I believe it is worth placing it here as well:
Regarding the theme of this thread, consider reading through these documents
http://hdl.handle.net/2027/pur1.32754074746458
fulltext access @ Hathitrust, try ‘classic view’ for faster download of the scan.
United States. Congress. Senate. Committee on Foreign Relations., .
(1980).
U.S. law affecting Americans living and
working abroad: Presidential reports submitted in response to section
611, Public Law 95-426 (as amended by section 407, Public Law 96-60) : a
report to the Committee on Foreign Relations, United States Senate.
Washington: U.S. Govt. Print. Off..
Look at this report and accompanying texts, in entirety (which do not contain the
more extensive supplementary report on taxation alluded to in
the introduction, but not named – commissioned to look more specifically
at details of taxation issues only), at the very end of this
report, are very focussed and astute point-by-point rebuttals by ACA of
the response or lack thereof from the US government (addressed to the President specifically).
@all, and also particularly for any Democrats Abroad, read the end sections where the ACA lists specific examples of discrimination against those of us abroad, and most particularly the ones to do with taxation. I think you will see that nothing has changed in the more than 30 years since these documents were prepared, and in fact many of the ACA comments are exactly ones which are discussed here, and many were highlighted by the TAS in her last reports to Congress. It is so much the same that it is uncanny.
The major difference is that the more recent buttressing of FBAR law, penalties, complexities and enforcement by the IRS, plus FATCA, and other changes (3520/As applied to Canadian registered savings that didn’t exist 30 years ago) – have created additional threats and additional enforcement and confiscatory penalty structures on top of what was always an untenable situation.
I admire the ACA even more than before – because these documents show that they were NOT addressing the US government and the President from a position as lowly supplicants or subordinates who should be grateful for retaining a ‘privilege’. They approached it from a position of what was fair and just – holding the US to account for a tax relationship that was equitable (as compared with stateside resident citizens) in RESULT, not in some rationalized fantasy of equity in theory (ex. “all US citizens should be taxed the same and pay their fair share).
The idea expressed by Joe Green and the rest of the Democrats Abroad FBAR/FATCA Task Force (Joe Green, Stanley Grossman, Maureen Harwood, Carmelan Polce, Maya Samara, Joe Smallhoover) http://isaacbrocksociety.ca/2013/01/15/demsabroad-is-out-with-a-memo-on-fatca/ , http://www.americansinindonesia.org/content/progress-changing-fatcafbar-rules : that the ever increasing costs and threats that are one with US status under extraterritorial citizenship-based taxation is just the price we must accept and pay for the ‘privilege‘ of living abroad – IF we hold US citizenship, was not the way in which the ACA approached the problem back in 1979. The stakes are even higher now, under FATCA and the ramped up FBAR. Those expats did NOT accept that living abroad was a privilege.
I find myself wondering whether the Taskforce itself came up with the phrase “…….. we may have to conclude that IRS compliance will likely involve a financial cost associated with the privilege of living abroad……“, and whether the wording originated in their own sincerely held beliefs about living abroad, or whether after having attending multiple meetings with the IRS, Treasury, and US representatives, they were merely mirroring or internalizing the language the US uses in rationalizing the abuse of those who live outside the US.
@Roger Conklin Here is “Animal Farm”, notes say that it is now public domain.
Thanks for mentionning this Roger, I had heard about the book, but never read it or watched the movie. Of Orwell I only read 1984. And oh, the viewscreen in the bedroom is big brother’s pet FATCAt. But Animal Farm is illegal in France because there is a pig called Napoleon. (Or is this supposed French law just a rumour like we wished FATCAt and Fu**BAR were).
Oops, “drôle” humour alarm just went off.
Ahh… how about we write some 1984-style Orwellian meaningless people’s entertaiment songs to commemorate FATBARDT.
“FATBARDT FATBARDT, FAIR’er dan en Apryylll Dahyyye…”
There we go, new compressed acronymn just invented for FATCA, FBAR and Double Taxation= FATBARDT. FATcafBARDoubleTaxation.
Democrats Abroad (DA) has just announced an anonymous FATCA survey. It seems they are working to secure a same-country exception for FATCA, and that “discussions with lawmakers and regulators will go on straight through the summer, but we need your help as well.” The survey can be found at https://www.surveymonkey.com/s/DA_FATCA, and they are encouraging people to share that link.
The survey asks about one’s experiences with banks and so forth, and provides plenty of space for comments at the end. Someone I know added the following comments to their survey:
“Financial planning and decision-making when living abroad were already difficult for US citizens and green card holders, due to the US’s choice of citizenship (rather than residency) as the basis for its taxation. To this, FATCA has now added a whole new layer of uncertainty and fear. Here in the UK, NS&I are already forbidding US persons from opening their accounts, so it seems likely that more institutions will follow suit.
“Your same-country FATCA initiative may well be a step in the right direction for US persons living in stable countries, such as the UK, where the banks can be trusted, but it is really only a beginning. For those US persons who live in war-torn areas and have to bank in neighboring countries for security, or those who live in countries where banking is customarily done in an adjoining country, it cannot really solve the whole problem. The only complete solution will be to bring the US’s taxation system into line with the international norm of residence-based taxation….
“Thus I hope that your ultimate goal will be moving to a residence-based tax system. However, the same-country FATCA exception does seem like a politically acceptable interim step, and one that should be welcomed by the banks, and I do wish you luck with it. Thank you for your efforts!”
Same country exception applies to FATCA, which is just the detection system.
FBAR still requires schmucks to report themselves to the gestapo Financial crimes enforcement network.
Same country exception only deals with detection.
Besides that, many people live in the EU and EES, where there is complete freedom of movement and banking, ie, the United States of Europe. Same continent exception for FBAR is what is needed.
Economy is advanced by working in difficult locations. For example, Azerbajzhan (or Angola, Nigeria, Algeria, Vietnam) is a challenging location with dynamic economy requiring product. In order to sell high value product, one must live in the country more than 183 days a year and be taxed in that country. However, such countries do not have stable banking systems and require that one banks in a banking powerhouse somewhere in the world, to maintain safety.
USA needs Azerbayzhan and Angola for high level business, and it needs salesman in those locations, but same country banking is impossible
Same country exemption is just a superficial band aid for expats who live in first world countries. It does nothing for expats who live in the third world but bank in the nearest stable country. It does nothing for expats who are mobile within the EU or anywhere else for that matter.
RBT or bust!