http://www.uspirgedfund.org/sites/pirg/files/reports/USPIRG_State_Tax_Havens.pdf
5. States could withhold taxes as part of federal FATCA withholding. The Foreign Account Tax Compliance Act (FATCA) prescribes a 30 percent federal withholding tax on companies that transfer funds to foreign financial institutions that do not comply with U.S. disclosure and reporting requirements. States that collect income taxes could withhold state taxes on these funds at the same time.
From the article above, this is interesting;
…”Wells Fargo paid no federal income taxes in 2008, 2009, and 2010, despite being profitable all three years, largely due to its use of 58 offshore tax haven subsidiaries….” and also see “Wells Fargo & Co. tops the list of companies receiving the largest tax breaks since 2008, according to a joint study from Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
Wells Fargo is one of 30 companies that paid less than nothing in federal corporate income taxes since 2008, according to the report. The company posted over $49 billion in profits in that period but had an effective tax rate of -1.4 percent, meaning it made more after taxes than before.
The report found that amounts to $18 billion in tax subsidies over the last three years, with the company paying -$681 million in taxes.” from http://iowaindependent.com/63308/report-wells-fargo-tops-list-of-companies-getting-tax-breaks
This during the reign of US Treasury Secretary Timothy-Turbotax-Geithner, and IRS Commissioner-“I don’t do my own taxes because it’s too complex”-Shulman who vowed to relentlessly pursue those who ‘don’t pay their fair share of taxes’. Except they pursued some and not others. They were really keen on pursuing Canadian-tax compliant citizens and permanent residents with no US economic relationship, including our dependent children’s RESPs and RDSPs, as well as Canadian grandmothers with legal local post-tax Canadian retirement savings accounts who’d already paid one full set of taxes to Canada via the Canada Revenue Agency. Strangely, Shulman and Geithner were not as keen on prosecuting US ‘too big to prosecute’ banks and bankers – as well as US Fortune 500 corporations who incorporate in US tax-haven-central Delaware, and hold their profits untaxed, ‘offshore’. Also the duo were strangely not as motivated to prosecute US banks who aided drug lords and money launderers http://www.publicintegrity.org/2011/05/18/4638/irs-crusades-against-americans-hiding-money-offshore-latin-american-tax-cheats-flock .
See also; ‘IRS looks into Wells Fargo tax deductions’…”In 319 pages of filings earlier this week, the Justice Department’s Tax Division said the bank has participated in “abusive tax avoidance” strategies for years.”… from http://www.startribune.com/business/106737628.html?refer=y ‘ by: DAN BROWNING , Star Tribune, Updated: November 4, 2010 – 10:27 PM
This is the bank also responsible for this; ‘Wells Fargo Typo Victim Dies in Court’
“The bank billed Larry Delassus $13,361 owed by his neighbor, then foreclosed”by Jessica Ogilvie Thursday, Mar 7 2013
http://www.laweekly.com/2013-03-07/news/wells-fargo-typo-victim-dead-larry-delassus/
And Wells Fargo is on the too big to fail and too big to prosecute list:
…..”Attorney General Eric H. Holder Jr., who raised hairs on Capitol Hill last month when he testified that the Justice Department hasn’t indicted any of the major U.S. banks or their top officers in cases of financial crimes in the wake of the 2008 global financial crisis because he has been concerned that doing so might hurt the economy or destabilize financial markets.
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,” he told the Senate Judiciary Committee”… http://www.washingtontimes.com/news/2013/mar/26/too-big-to-fail-fears-rise-as-banks-bulk-up/?page=all
Wells Fargo also got an IRS tax break that helped it buy up Wachovia, and get even bigger.
How diligent the US is about looking to confiscate monies from everyone outside its borders, while overlooking the state of Delaware who helps the US be the biggest tax haven in the world, and Florida and Texas and Nevada – who provide bank secrecy to non-resident foreigners with US accounts.
@Badger, it’s why I fear that Expats are going to be targeted rather than these huge U.S.-based banks. ‘You’re either for us or against us…’ I can understand why the U.S. is going after tax evaders (the U.K. is too) but the collateral damage being caused is unforgivable.
I can’t serve two masters; expatriation was a mere act of survival.
@monalisa, expatriating was what you and others have had to do to protect yourself and your household. The US is forcing us into this, whereas many duals without the US status one would probably be able to live lifelong with no conflict between loyalties or citizenships. I don’t think they’ll come to their senses, so we have been given no other alternative.
When does anyone ever come to their senses when their lack of sensibility is indulged by those around them? I read a story about how a certain Caribbean country’s economy will be destroyed by FATCA and didn’t hear a peep of outrage about it. I realize that media coverage can have an emotionally sanitizing effect on how these things are covered, but that being said, you can sure hear the increasing sound of war drums in the pursuit of offshore tax evaders. I guess tax evaders are just sexier than whinging USP’s and insignificant economies, as far as the BIG media’s concerned.
@Badger, exactly. Though had I been wealthy, could have more easily afforded the ongoing accounting and compliance fees. I suspect that there will still be a well-oft stalwart class of expats who’ll make a patriotic point of remaining U.S. citizens in spite of facing double taxation and expensive compliance; not only because of their covered status but because they’ll consider it a badge of honour to be loyal to America. Perhaps their retaining their citizenship will become a status symbol, who knows??
@monalisa,
…or perhaps they are among the many ‘just working in a foreign country,’ fully intending to at some point go back to the US to live. Of course they will want to retain their US citizenship. Many may have all of their accounting and compliance work and fees covered by their employer. I don’t really think it has a lot to do with an over-inflated sense of patriotism; they will just go back to their country to live.
That segment of US Persons Abroad is much different than others of us who have no intention of ever returning to the US to live — it is our choice to have moved from the US and made whatever other country our home, with all of the responsibilities and benefits that those countries may give us. It is especially egrecious for those who are what we know as “accidental Americans”. Some may want to claim the US citizenship which could be transferred to them by their parents or their accidental place of birth (not residing there) — it should be their CHOICE, not automatically “gifted” to them. In the case of so many, automatic US citizenship is anything but a gift.
@monalisa, that is an intriguing idea – that US citizenship for those who were born or live ‘abroad’ may be, or become or currently is, a luxury/status symbol – because it demonstrates that one can afford expensive accounting and US tax law services and advice.
@bubblebustin, very good point – there are small economies, and countries like Jamaica who could be totally ruined by paying millions for FATCA compliance infrastructure, when they could be paying for schools and hospitals. The US bears none of the costs and all of the supposed ‘benefits’. And Jamaica will not derive any benefit or increased revenues, only potentially lose more.
And I fear that the pursuit of wealthy individuals is a smokescreen for the non-pursuit of the larger pots of untaxed profits of corporations. Such as Goldman Sachs – from whence several Obama appointees have come – including the probable pick for US Ambassador to Canada
“……….Five banks that received federal bailout funds during the financial crisis didn’t pay income taxes for one or more years between 2008 and 2010, according to an iWatch News analysis of a new study http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf of tax dodgers.
Wells Fargo & Co., Goldman Sachs Group, PNC Financial Services Group, Capital One Financial Inc. and State Street Corp. were among 78 of America’s largest and most profitable corporations that managed to avoid paying income tax in at least one of those years…. ” http://www.publicintegrity.org/2011/11/03/7294/bailed-out-banks-paid-no-income-tax-some-years-according-study http://www.cbsnews.com/8301-201_162-57577914/report-big-business-no-stranger-to-offshore-tax-havens/ http://www.bloomberg.com/news/2012-03-02/cash-horde-expands-by-187-billion-in-untaxed-offshore-accounts.html and
You said; “When does anyone ever come to their senses when their lack of sensibility is indulged by those around them?” And things are rigged for the US to do this. Look at our next US ambassador to Canada – from Goldman Sachs. Look at the media silence on FATCA – except mostly the ads for the FATCA Compliance Industrial Complex
As we have seen, the media does not follow or report or analyze on this story – for whatever reason. The US is stealing from other countries’ treasury, and from their taxpayers – who will bear the compliance costs.
And some of those countries may have taxpayers who have hidden US accounts. Which the US pretends may possibly in a future alternate universe be disclosed under the faux FATCA ‘reciprocity’. Thus, another way in which the US profits on the backs of other countries.
I look forward to hearing how the new US Ambassador to Canada, Heyman, lately of Goldman Sachs, (“Heyman runs the private wealth fund at Goldman Sachs and his areas of responsibility include parts of Canada.” http://www.cbc.ca/news/world/story/2013/04/03/pol-us-ambassador-to-canada-obama.html ) will explain why FATCA is good for everyone else, but not even faux reciprocity from US banks. I also look forward to his explanation of how those in Canada should be liable for US taxes and bank account and asset reporting, whereas Goldman Sachs got a bailout from US taxpayer money, and yet didn’t even pay US taxes in some years. Also, see the comments by a Goldman Sachs boss “Goldman Sachs boss Lloyd Blankfein has hit out at David Cameron’s anti-tax avoidance campaign, warning that criticising people for their tax arrangements risks “criminalising every right-thinking person who organises his or her affairs in a sensible way” and said that paying US taxes isn’t a patriotic duty. So, when will Obama’s big fundraiser and new ambassador to Canada tell that to Obama, Treasury, and the IRS, and get them to issue a blanket amnesty for all those the US claims the right to tax in other countries? And advocate for the abolishment of US extraterritorial citizenship-based taxation? See also http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9828166/Goldman-Sachs-chief-attacks-David-Cameron-on-tax-avoidance.html http://www.thisismoney.co.uk/money/news/article-2294409/Goldman-Sachs-boss-believes-giving-banker-bonuses-equity.html http://www.guardian.co.uk/business/2013/jan/15/mervyn-king-goldman-sachs-bonus-row
How true, bubblebustin. No mention of the outrageous cost to some poor countries’ economies with costs of FATCA. It again comes down to morality replaced by over-reaching tax law and lazy journalism — going for those sensational / sexy sound bytes of 700 word only stories and headlines.
Your predictions of whistle blowing may also come to pass — those who are going to try whistle blowing for supplemental to their incomes may be many. Might even be better odds than a lottery for some. Where did I see that there was a university course being offered on that very subject. Here is one such: http://www.pressoffice.cornell.edu/pressoffice/releases/release.cfm?r=72414
Re: “US PIRG wants individual US States to enact their own “FATCA”
Will “offshore” include other US states, widely known to be the US’s biggest tax havens?
I think we should write to Heyman, the expected new Ambassador to Canada, quoting ““Goldman Sachs boss Lloyd Blankfein has hit out at David Cameron’s anti-tax avoidance campaign, warning that criticising people for their tax arrangements risks “criminalising every right-thinking person who organises his or her affairs in a sensible way” and also his comments that paying US taxes isn’t a patriotic duty ““If people organise their affairs to take advantage of the tax regime it’s not bad behaviour,” the bank chief said at the World Economic Forum. “There is a saying in the US that it is not even a patriotic duty to maximise your tax liability” http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9828166/Goldman-Sachs-chief-attacks-David-Cameron-on-tax-avoidance.html
I want to hear Heyman defend FATCA, and defend double taxation of Canadian citizens and residents by the US, and defend the US taxation imposed on the sale of our principal residence (outside the US) and the punitive treatment of our legitimate registered savings as ‘foreign trusts’ (TFSAs, RESPs, etc.) and the new Obamacare tax on investments held by those living in other countries, and all the rest of the nonsense. It will be particularly interesting to see what someone whose responsibility was to private investors in Canada (“Heyman runs the private wealth fund at Goldman Sachs and his areas of responsibility include parts of Canada.” http://www.cbc.ca/news/world/story/2013/04/03/pol-us-ambassador-to-canada-obama.html ) has to say about all the options the US prevents us from using to save in any effective way in our own country.
My prediction is that there will be a dramatic increase in awareness of what a homelanders obligations are when they leave the US. There will be very few left unaware, as we were. We are the last generation to believe we were free to go where our hearts and business opportunities went. Behaviour will change. Many Americans will choose to only leave on ‘tours’ and won’t mix with the natives unless they feel confident they can persuade them to return with them to the homeland. All of this will be ok with them because they are “exceptional”.
Remember, the best thing the US’s citizenship based taxation has going for it is that most are unaware of it. Those who live abroad permanently and choose to keep US citizenship will become very lonely people, America’s ‘dying diaspora’.
@monalisa,
Victoria’s brilliant post, Settlers, Sojourners and Tax Evaders says it best when differentiating: