Bernerzeitung – Jon Mettler – 30.04.2013 11:05
I attempted a quick translation of the the latest news. Please excuse spelling mistakes or other errors:
Americans Abroad are Furious
The strengthened US tax laws are heavily burdening Americans in Switzerland. They are reporting the serious consequences this is having on their jobs and family lives. Now, this is inciting resistance.
The nerves of many Americans in Switzerland are on the edge. The reason is the hardened move by the USA against tax cheats. Two abbreviations are causing the hair of Americans living abroad, also called Expatriates or short Expats, to stand up: FATCA and FBAR.
FATCA and FBAR
The FATCA-law is the same as an automatic exchange of information (see box). The FBAR-report demands from US citizens that they expose foreign accounts with more than 10000 dollars. This includes business accounts with spouses of a different nationality. Americans also have to report foreign bank connections for which they have signature access, even when they have no direct beneficiaries of these accounts.
What Fatca and FBAR actually cause, is seen with the following examples in Switzerland: A private banker with a Swiss and US passport got fired by his employer. The man is convinced that such is related to his US citizenship because he reported the accounts of his clients to the IRS over which he had signature access. With such, he violated banking secrecy and Swiss laws.
Facing the divorce
An American who lives together in Switzerland with her Italian husband is going through a divorce. Her husband is not willing to allow the US government see their shared banking connections. She is also burdened with the uncertainty of having correctly declared her financial data in the past. Now, she fears punishment from the US tax authorities on their joint account.
A third American reported that his bank account got cancelled. He lives and works in Switzerland. Yet, he needs a local bank account to pay his bills and mortgage. Other expats feel restricted in their profession or fear returning to the US.
Those involved fear being openly named. Too great is the fear of being targeted by the US tax authorities. One exception is Edward Karr. He is Co-president of Republicans Switzerland, president of American International Clubs in Geneva and financial adviser of his own company. “This is how far we are now. The US authorities are ensuring that simple Americans fear speaking openly with journalists”, said the 44 year old. Karr also experienced the rigorous methods of the US-fiscus. As the holder of a simple salary account by a large Swiss bank, he gets redirected to a special counter for US citizens whenever he wants something from the bank.
Karr is unhappy about the situation facing his fellow countrymen abroad. He created a working group for Americans abroad which listens to the concerns of 20000 to 24000 estimated expats. At the end of 2012, the working group led in Bern, Basel, Zürich, Genf, Lausanne and Lugano citizen meetings. These so-called “Town hall meetings” were very emotional, reported some present. US ambassador, Donald Beyer, was confronted with fear, anger, panic, uncertainty and feelings of betrayal.
Damaged national pride
Expats fail in understanding why their own nation practices general suspicion of tax evasion – while they view themselves as being good national representations. That continuously more dual citizens in Europe are abandoning the US pass, strongly targets the national pride of Americans abroad.
The working group further wrote a report on its recognitions and recommendations. The most important demands are: The USA needs to abolish citizenship-based taxation. Instead, it needs to tax based on residency. Furthermore, Americans living abroad need representation in Washington and an ombudsman service.
The working group wrote in September 2012 to every individual member of US congress in Washington, to raise their awareness of the miserable situation expats are in. The reaction from the capital was limited. “There were a few responses, written from the student workers in the parliament”, said Karr. As a result, he changed his strategy. The working group is now focusing on winning the favor of the the US economy. US tax law has also made it increasingly irritating and burdensome for US corporations to employ Americans abroad. Karrs calculation is simple: politicians are more likely to be bent in the lobby-dominated Washington when they are pressured by US corporations and thereby exposed to money. Karr also has high hopes in social networking on the internet. His dream is to connect Americans abroad through Facebook and Twitter. This would, in his view, also increase the pressure. “The weapons lobby, NRA, has 4.5 million members and is one of the most influential groups in America. There are around 7 million Expats. If we work together then Washington won’t be able to ignore us”.