TD Bank’s vow to make the FATCA experience “comfortable” for the affected clients invoked a powerful impression on my psyche, one which remained ineffable for a few days. I’ve written about a paternalist leadership style, and certainly this fits: the US federal government and its representatives exhibit most of the characteristics of paternalism in its relations with other countries and this is becoming increasingly intolerable.
However, it was yesterday as I watched again the Harry Potter series that I began to grasp better the idea that was eluding me. Through her characters, J. K. Rowling pegs certain stereotypes in our day: the incompetent politician, Cornelius Fudge, the unscrupulous reporter, Rita Skeeter, and the sickly sweet bureaucrat, Delores Umbridge. Despite her feminine pink attire and her pictures of kitty-cats on the wall, Umbridge is a torturer and an abuser of human rights. Thus, she promises through her overt femininity to make torture and banishment a comfortable experience.
Harry refuses to report Umbridge’s abuse, because he knows it would just make things worse. Harry, however, regrets not taking a stronger stance when he sees one of the Weasley twins comforting a first year student who Umbridge has likewise tortured with her blood pen.
In the following scene, Umbridge banishes Professor Trelawney. Knowing what it is to experience the pain and injustice of exile, I am deeply moved by this scene:
Now meet Tara Ferris, Attorney, Office of Chief Counsel at the IRS:
By all counts Ms. Ferris is beautiful and bright–though perhaps a little nerdy in her apparel and mannerisms. She is not my idea of an executioner or torturer but rather of a “girl-next door”. Yet before you think that the IRS is made of people just like me and you, consider the point at which she says that the banks must report to the IRS accounts below $50,000 (starting at 39:21, pointed out by reader Mark Twain), if they belong to an already indicated US person. This has serious implications for those of us who think that we can remain below the radar. Let’s just hope that our bank has no knowledge of our US personhood. For this Tara Ferris is not after just the upper-classmen whales, the Harry Potters, but the little first-year minnows too. (My apologies for the mixed metaphor).
Again, I lack words to describe the evil I see when what is saccharine becomes bitter. Sometimes fiction captures it much better.
Yes, that point brought up by Mark Twain concerned me too. It means that many of us will be betrayed by our personal relationships with out bankers, as many bankers would not have known of our US status had we not told them (perhaps only in passing when they may have asked us about our accents, or chitchatting about travel?). Certainly for those with accounts <$50K, they will never know unless we tell them. Will banks adopt a "don't ask, don't tell" policy with suspected US persons, or will the threat of the ramifications of letting one slip through the cracks result in more invasive questioning? I suppose it will depend on the individual bank where they'll set the scrutiny bar, but none of this is good.
We too will be hung by our own words. This is so reminiscent of the holocaust, where any previous knowledge of someone's Jewishness proved to be a serious danger later. People who are "just doing their job" are also a stark reminder of how human beings can overlook their part in the persecution of their fellow human beings. I'm not going to speak to how Ms Ferris might feel about FATCA, but she does seem to do her job very well.
@Petros
I really like you making the comparison of Ferris to Harry Potter’s Umbridge. When I first saw this video my gut feeling of Ferris was that was an unfeeling bureaucrat who took pleasure in carrying out orders, no matter how horrible.
I guess it is time to get our money out NOW.
@bubblebustin, Well, it really shows what ugly liars the US Treasury Department has become. They are really asking that all US persons be handed over to the IRS: all of them. If they have existing accounts, well that’s another matter. Those accounts, if under $50,000 are grandfathered, but only because it becomes too tedious for the banks to do anything about them.
I repeat: they are dirty liars, and our government betrays us to co-operate with such thieves and scoundrels.
Bubblebustin, if you look at the situation for Category 2 banks under the US-Swiss non-prosecution agreement, which provides that banks that think they may have conspired in a US tax violation may avoid prosecution but be subject to substantial fines based upon the value of (all) the US accounts they held, it becomes pretty clear that “don’t ask, don’t tell” isn’t going to be a viable strategy. I also think that, unfortunately, the “loophole” that currently exists in FATCA–absence of a requirement that FFIs find persons who were born abroad to a US parent or parents who had spent the requisite number of years in the US to automatically convey US citizenship to them–will be closed, somehow, at some stage. Nothing will stop the US Congress from requiring the banks to find these unfortunate people at the banks’ expense.
One of my friends is a CFO at a Swedish bank. She said it is legal to ask, but it wasn’t legal to demand an answer. This will likely change when they implement the IGA, and I read that they are allowing for the IGA in their budget negotiations and budget documentation going on now. At that point it will become quite dangerous to visit the bank in person.
for most of us in other language countries, the best one can hope for is to be identified as being from UK or Canada.
What a disgusting performance.
My earlier comment on this seems to have been lost in the ether. I don’t think the banks can adopt a “don’t ask, don’t tell” strategy and I base that view on the content of the US-Swiss non-prosecution deal for Category 2 banks. I also think the loophole that exists (FFIs are not required to find persons who are US citizens because they were born abroad to a parent who spent the requisite time in the United States) will eventually be closed. Nothing seems likely to stop the US Congress from requiring foreign banks to find all US persons at the foreign banks’ expense. Yes, it was chilling to realise that if the FFI ever learns you are a US person, your balances under $50,000 will be reported, and compared by the IRS against your 8938 filing, and (for the minnows) against your FBARs, with their $10,000 threshold. And of course there appears to be no requirement for the FFI to tell you what they told the IRS.
@Londoner
Upon reading your comment, I took a look and found it was sitting in the spam. Sorry, that happens occasionally for no apparent reason. It’s a bit different than your second one, so I put it on the thread — if you’d like me to delete it, I will.
@Londoner
It’s all very disgusting isn’t it? The US will never let anyone fly under the radar. I imagine there will also be quite an outcry from those being victimized by their birthplace only. Worse there will be those already compliant calling for the blood of those who they feel aren’t paying their “fair share”. This will surely pit citizen against citizen.
Another Harry Potter analogy is when the Ministry of Magic starts going after muggle-born, non-pure breds. Ok, so it is today ok to discriminate on the basis of nationality–so insist the US that every bank world practice race/nation based discrimination. I am so disgusted these people who act so important but have lost a concept of basic human decency.
Yes, Petros, level the playing field by allowing all competitive athletes to use steroids!
“Whistle blowing” will have new meaning. I will only be looking over my shoulder because of my connection to my Canadian-born, ‘mentally incapacitated’ adult son “entrapped” with supposed US citizenship. I renounced so not to have to look over my non-US shoulder for the rest of my life. I haven’t gotten my money’s worth.
The Harry Potter series is really supposed to be children’s books. I think it should be required reading for all those entering government civil service. At least it appears that today those in the service of an all-knowing all-powerful government think that they are doing good, when instead they are trampling upon the rights and freedoms of citizens and destroying their basic human rights.
Saccarin is a passive stimulant. It does nothing to improve performance or alertness, but it prevents you from falling asleep.
Aspartane is also relevant. If decayed aspartane is ingested, It gives headaches. It also causes excessive urination. Just like her, a pain in both the big head and the little head.
This saccharine style is typical of the US itself. I think of this president – like past ones have – going around the world and sweet talking the public. with promises of respect and multilateralism, while continuing or expanding imperialist policies of his predecessors. And these cutesy names like Operation Freedom such and such, and the HEART and HIRE acts – as Allison Christians puts it “apple pie names… with a poison crust on the bottom”. Sometimes I suspect that this saccharine American style extends beyond spin or deception into actual self-delusion. The president and his supporters seem to think that if you can paint a smiley face on American policy and go on about supposedly benevolent “American values” that it will somehow lighten the fact that the victims are being treated with violence and injustice. The banks are just taking this style to the customer.
@ Brockers. thank you so much for pointing out the similarities of Ms Ferris to Dolores Umbridge-spot on…….. and chilling. but so much about FATCA is chilling and orwellian that the trick is to not become “FATCAigued”… and keep your spirits up for the good fight.
@ all who followed the tattoo debate-CLNs don’t actually HAVE a number….so I am thinking again about what designs I put on my hip….. current desire is the words “US Tax Slave” with a big red X over it !!!!
A wolf in sheep’s clothing comes to mind…
wow!
http://c-spanvideo.org/program/FormerCi
Committee members heard testimony about an administration tax proposal for those who renounce their U.S. citizenship. The new plan would treat all former citizens’ assets as if they had been sold, and would tax the net gain. Currently, former citizens who leave the U.S. for tax reasons pay taxes for up to 10 years.
@ Tara
That is a very old C-Span — March 28, 1995. Very old news.
… and led up to what we have now with the Reed Amendment (that has never been enforced?), Form 8854 to determine who is a ‘Covered Expatriate’ after expatriation and subject to the dreaded US Exit Tax.
Of course, legislators will continue to try to have new punitive legislation until somehow what they want is passed: http://www.moodysgartner.com/renouncing-your-us-citizenship-new-law-may-keep-you-out-forever/. This link is a good explanation of the history of the related legislation.
@EM – yes, but we can learn from history… It’s an incredible 3 hours.
@SwissPinoy – your observations to this debate would be of interest. Thanks again for your posting this morning.
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The Canadian who would like to bring a lawsuit to stop The Banks from acting on FATCA should have standing as a citizen. He will be harmed in the future and the wheels are in motion to do just that. If that is not conspiracy to commit an unlawful act and deserving of an injunction, then what is?
Here in the U.S. all of us who are not the kool aid drinkers (Obama Supporters) know that this act will drive the nail in the coffin on exports for all but high tech items like airplanes and other things we do better than anyone else.