In the past, one used to seek to win friends and influence people. Such was even updated for the digital age. Yet, now times are changing, as explained in this excellently written article:
How to Lose Friends, Citizens and Influence
The U.S. Foreign Account Tax Compliance Act seeks to co-opt foreign banks as long-arm enforcement agencies of the IRS.
The fact that Ms. Graffy is a former State Department official makes this quote all the more interesting:
Many, like the very British mayor of London, Boris Johnson, are “accidental Americans.” He was born in New York, where his father worked for the U.N. And unless Mr. Johnson has actively renounced his citizenship, which requires an appointment at a U.S. Embassy, forms and fees, he is still an American citizen. Mayor Johnson repudiated his American citizenship in a newspaper column once, but it’s far from clear that this would satisfy U.S. authorities. Mr. Johnson, have you filed your taxes and reported all your U.K. bank accounts to the U.S. Department of Treasury yet?
She very likely knows whether Boris Johnson has formally renounced. If he had, she wouldn’t equivocate like that. Looks like Boris has simply repudiated the US but it would cause a diplomatic crisis if they called him on it.
@Johnson, many of us in France are thinking the exact same thing about Anne Sinclair (DSK’s former wife). She MUST be filing FBAR’s. And, by the way, when I tell my French friends and family that she’s an American, they flip out – “C’est pas possible! Si, si, mes amis…” 🙂
Hasn’t Boris Johnson renounced his citizenship after one airline didn’t let him travel on a British passport to go to Mexico for a vacation (via the US) some years ago?
And talking about the impact on people, I recently read that now that Tina Turner has renounced, she is getting married. I wonder if this was one of the reasons she did.
@Chris
You can find the story here (http://www.boris-johnson.com/2006/08/29/american-passport/). He was traveling to Mexico with his family via Houston when he was denied boarding by the airline who insisted he had to get a US passport from the US embassy. Instead, he bought a ticket to Mexico via Madrid and managed to get there 45 mins earlier than his family. I’m guessing that the USG won’t consider his blog posting containing the following as legally valid:
“I make this formal, public, and, I hope, legally valid renunciation, because as a result of this moronic rule I had to ask my wife (who bore this latest cock-up with amazing good humour) to take the children on her own to Houston, and I then had to spend a stonking sum on another ticket.”
It’s unclear whether he followed up his blog post “renunciation” with a valid renunciation at the embassy. In his June 2012 appearance on Letterman he was asked if his birth in NY made him an American citizen and he said “It does”. (about 3:20 into the interview – https://www.youtube.com/watch?v=gZdY-qJRMG0)
Unfortunately, FATCA may just have to be launched in order to see how many leaks it has!
Anne Hornung-soukup from ACA is commenting on the article. For those not familiar with her, her interviews on Goldstein on Gelt are worth a listen:
http://www.youtube.com/watch?v=__qgj0-0Zjk
Three Canadian senators not responding to my repeated emails to “inquire into” constitutionality of FATCA IGA:
—Senators Runciman and Fraser; Chairs of Senate Committee on Legal and Constitutional Affairs
bob.runciman@sen.parl.gc.ca joan.fraser@sen.parl.gc.ca
Long shot but I suggested to both that even though IGA has not yet been signed or come to Senate, the essential feature of IGA cannot change and should be reviewed at the earliest stage, especially as government may try to rush IGA through Parliament or implement IGA without Parliament. Please begin a “preliminary inquiry” now into its constitutionality as this is the mandate of your committee and there are one million USPs in Canada etc.
–Senator James Cowan, Opposition Leader in Senate jim.cowan@sen.parl.gc.ca
Sent email (cc’d to Committee senators above) to Cowan immediately after his article in National Post appeared “proudly” justifying existence of Senate (which most want abolished) by defending Canadians from unconstitutional bills. Thought that I might have some chance with Cowan as Senate is now going through many scandals (Mike Duffy) and could use good PR.
http://fullcomment.nationalpost.com/2013/07/03/senator-james-s-cowan-a-proud-day-for-the-canadian-senate/
Cowan: “Could the elected members of the House of Commons have done the job that we [Senate] did? Undoubtedly – but for whatever reason, they did not. Instead of three weeks of committee hearings on C-377, they spent four hours listening to witnesses. Not one constitutional expert testified, nor any provincial government.”
“We [the Senate, are] supposed to be, as George Washington described the (then-appointed) U.S. Senate, the Chamber that “cools” legislation passed by the House, “just as a saucer is used to cool tea”.”
No acknowledgement to any of my emails. Perhaps others could give it a try and express an opinion using email addresses above?
I just noticed this morning that the WSJ story is running this article on another page under a separate headline with an entirely different set of comments. The one posted above is on the European Opinion edition apparently, and the new one the American Opinion page, or so it seems…
It is titled…
A Special Tax Misery for Americans Living Abroad
It only has 51 comments, while the EU page has 91 comments. I will try to add a comment or two there also.
The Tax Foundation just wrote:
“As with corporations, the United States tax code taxes the income of individuals, no matter where in the world they earn it. The only two other counties in the world that tax individuals this way are North Korea and Eritrea. Let me repeat that: North Korea and Eritrea.”
Although it’s nice that a think tank is finally mentioning the subject, the statement is incorrect for two reasons. First, the US is not the only country that taxes income of individuals “no matter where in the world they earn it”, it’s no matter in the world they live. Most countries do tax foreign income of their residents. The issue is not worldwide vs. territorial, it’s citizenship vs. residence.
Second, North Korea does not tax its citizens abroad. What happens is that the North Korean government makes contracts with foreign companies to send its citizens to work there, the companies pay the North Korean government directly, which then pays the workers. Of course the government keeps a large part of the money, but it’s not exactly a tax, it’s a subcontract. If North Koreans are able to move to another country on their own, there is no law that says that they should pay tax to North Korea. Actually, North Korea officilally abolished all taxes decades ago. That’s right, North Korea doesn’t have any taxes, except on foreign investment. Instead, the government just owns the whole country.
Of course it’s catchy to include North Korea in the list because it’s an infamous country, while most people have never heard of Eritrea. But it’s actually worse: not even North Korea has citizenship-based taxation.
I see the page for the latest story in the WSJ requires a Facebook social plug in to sign in, so guess I won’t be commenting.
I have FB and just left a comment. Here’s what i wrote (kinda lost my temper)
To the gentleman who asked, “How many of you have actually been an expat and had to deal with these laws?”
I’m one. 20 years outside the US. Married with two kids and a career as an IT manager. What a nightmare the last few years have been. Didn’t know I had to report my foreign bank accounts. It was never mentioned to me at the Embassy (we have a local IRS office that gets both French and American holidays off). Spent MONTHS gathering the information to file and what fun that was. Had to include everything: all our joints savings and checking accounts (so my French husband’s financial info and guess how happy he was about that?) and even my daughters’ little savings accounts with 200 Euros in them. Please explain to me how any of this is useful to the US government and are ever so ESSENTIAL in the fight against tax evasion? Honestly, I just don’t get it…
As for the taxes, may I correct Mr. Sewell. I have paid my taxes to the US government on top of what I already pay to the French government. Mr. Conklin is absolutely correct and in the past two years I have shelled out 10,000 USD in American taxes to the IRS when ALL of my money was earned and invested in France, I already pay French national and local taxes, and I’ve never done anything more complicated than save for retirement and for my girls’ college. Hell, on my last US tax return I had to include my FRENCH unemployment benefits. Sorry but it’s all true and if you like go look at the IRS website where even they say that the tax credits and such only diminish the burden and are not a guarantee against double-taxation. And some of us have learned this the hard way.
Does this help you to see why there are millions of Americans abroad who are in a RAGE over this? Why there are entire sites (getting hundreds of thousands of hits) devoted to fighting this. There are conversations going on about this among the 6 million+ Americans everywhere on this planet (France, China, UK, Brazil, Canada….) Renunciations are up and unlike previous eras, we are not going quietly this time around. We are spreading the word in every country using social media, blogs and the like. We are telling our friends, our family and the local media about this special responsibility that comes with US citizenship. I’m not sure what’s coming next but it’s not going to be pretty. Maybe demonstrations in front of US embassies all around the world? I wouldn’t rule it out….
Welcome to the American Diaspora Tax War of 2012-2013!
Thanks Shadow Raider.
Too bad the Tax Foundation article won’t take comments.
Interesting about N Korea. I’d heard on the news that they weren’t bringing their contractors back from Libya after Gadafi’s overthrow because the government didn’t want to bring witnesses to a successful overthrow home to influence anyone.
@Victoria
As with many genocides, the extermination of Americans abroad will have its deniers too. We must be exaggerating or making these things up, or they believe that America is somehow justified in doing something so exceptional.
North Korea doesn’t officially have taxes. From Wiki:
North Korea claims that it is the only state in the world that does not levy taxes. Taxes were abolished beginning on April 1, 1974
Not true of course:
http://www.dailynk.com/english/read.php?cataId=nk02900&num=6203
@bubblebustin, I sent an email to the author of the article.
@Victoria,
Terrific rant! We need to see a lot more of this all over the internet and in the media.
The author of the article at the Tax Foundation just responded. He agrees that they should do more research on the impact of international taxation on individuals, and he intends to mention the subject in the future.
@shadow raider
Well, what do you know!
Just an important heads up for those commenting on these types of articles. When the issue of voting rights from abroad come up, it is NOT correct that ALL US citizens have the right to register or to vote from abroad. Each state makes its own rules about who can register and vote absentee in federal elections. Almost half of US states (just under half?) DO NOT allow those born abroad with US citizenship with NO US residency period to register or vote from abroad. See https://www.votefromabroad.org/news/facts-voting-abroad a site sponsored by Democrats Abroad . Only some states allow those who were born in the US to register in the last state that their US parent lived in – IF that parent WAS eligible to vote there http://www.fvap.gov/reference/nvr-res.html. The rules vary wildly by state. Effectively, a large portion of those deemed US citizens abroad can NEVER register or vote from abroad – unless they were to move to the US and establish some period of actual residency. See FAWCO ‘Voting rights for US citizen children born abroad ‘ “…Unfortunately if neither of your parents is from one of these states, you may be an American citizen who has no voting rights. ..” http://www.fawco.org/index.php?option=com_content&view=article&id=1921:voting-rights-for-us-citizen-children-born-abroad&catid=110:us-voting-from-overseas&Itemid=343 and also http://www.aaro.org/aaro-around-the-world/254 ‘Which American Kids Don’t Have the Right to Vote? Ours!’ “…When these foreign-born American citizens overseas turn 18, they will need to file US taxes and sons will be expected to register with the Selective Service. But a lot of them won’t be able to vote….”……….”if the person in question has never been domiciled in a state? UOCAVA doesn’t cover them. The right to vote is not guaranteed by the Constitution; it is a “gift” of the states. …”
Only in recent years has the US even made it a project of trying to make voting from abroad for those who qualify somewhat easier. They are far more interested in facilitating our taxation than our voting rights. They continue to let a conflicting patchwork of US state laws interfere with the ‘right’ to vote, whereas they have no doubts whatever that we have the ‘right’ to be taxed by the US. I remember very clearly when I initially went to the Toronto US consulate to see if I could register and vote from abroad, and the clerks behind their sealed glass counter pointed me to a row of telephone directory sized books chained to the far back wall. I received zero assistance other than that, though I asked how I would even know which state to even apply to register with if I had no US residency as an adult. I was told it was up to me to figure it out.
US citizens with and without the right and ability to register and vote from abroad is of course but a smaller subset of the far larger group of those deemed/doomed to be ‘US TAXABLE persons’ – including those who can never qualify to vote because they are NOT citizens – for ex. greencard holders and ex-greencard holders, plus those who were only visitors who stay too long and become US taxable but who are neither citizens nor legal permanent residents.
So, the cry of “taxation without representation” is effectively the case for most of us. And, even those abroad who can register and vote have no EFFECTIVE representation – as we have seen when our congresscritters and senators deny us easy access to their offices by screening out e-mails from outside their districts, much less outside the US. We are also blessed with having US taxation without effective government services when the IRS cancels all in-person information and assistance in our consulates and embassies – due to budget cuts, at the same time as aggressively ratcheting up the enforcement only bias of the FBAR and FATCA fundraiser and jihad against all assets held outside the US – where we happen to live, and often were born. Despite being notified officially and repeatedly of this problem by the Taxpayer Advocate, Congress, Treasury and the IRS persist with persecuting us extraterritorially, but refuse to provide any significant and in-person extraterritorial assistance in the countries with millions of deemed ‘US taxable persons’ and US citizens abroad – Canada and Mexico. You CAN rat out someone to the IRS via the IRS attache in Ottawa, but you can’t get any information or help with your attempts to be compliant.http://canada.usembassy.gov/consular_services/taxpayer-assistance.html . Note that there are still NO tollfree IRS numbers listed on this HELP page, and the TAS numbers are in Puerto Rico. I suggest you look up the long distance charges before you try waiting on hold for assistance via Puerto Rico.
Happily, this article by Graffy is getting comments, being passed on, and quoted on a variety of very diversely themed sites – including those whose main constituency are sports fans plus various church and religious congregations.
When an article about politics and tax gets discussed by such a diverse audience, you know it is gaining traction.
@Badger..
I hope you have made a comment to that effect on both WSJ articles, especially to those that are spouting the benefits that American Citizenship brings to those that live abroad! 🙂
@Victoria
I saw your comment, and I see that I was WRONG about Facebook plug in. I didn’t realize that I was automatically logged in from my comments the previous evening, and this was just another option for logging in. So, I entered a couple comments just to add for this audience which is decidedly different than the one commenting on the EU opinion web page. It is GREAT that the article is getting such wide discussion, so might check in later and see what new nonsense is being spouted by those who haven’t a clue. 🙂
@Shadow Raider…
Way to go, and glad you got a response. The author is in the <3% who do respond to emails, but it was worth the effort if he acknowledged that you were right!
@Only a Canadian, Yeah, I kinda lost my temper. Maybe I should do that more often.
@Just Me and Badger, Can we track down some of the sites where people are discussing the article? Might be useful to engage them directly. It is 10 PM here and I need to go “dodo” but I’ll have a look in the morning. We might also think about encouraging our “hometown” newspapers to reprint the article.
It’s funny that back in 2006 when Ms Graffy was deputy assistant secretary of state for public diplomacy, she didn’t think Gitmo was using torture, yet the treatment of US persons abroad is unbearable. I guess like with Mr Stack, your opinion the US’s behaviour depends on what team you’re on.
http://www.guardian.co.uk/commentisfree/2006/mar/22/comment.guantanamo