Forbes’ Robert W. Wood is clearly feeling conflicted these days, as he asks:
Is Opposing FATCA Supporting Tax Evasion?
I’ll resist too much editorializing for now and simply urge as many Brockers and Sandboxers as possible to get over there and help Mr. Wood (and his trusty side-kick Lesperance) to get in touch with their inner consciences and come out forcefully on the right side of history.
There is nothing inevitable about FATCA except that our grandchildren will surely be reading about it in school some day. There is still plenty of time to change the course of history, as Nelson Mandela taught the entire world. This is hardly the time to give up, and methinks Mr. Wood just needs a bit more cogent and positive encouragement. Remember, we’re all basically on the same side, so let’s start getting it together.
The article’s headlines is certainly a question that deserves asking, and I appreciate Mr Wood for being the first I know of in the media to ask it.
@All
Mirabile dictu! Mr. Wood finally acknowledges RepealFATCA.com! But this is not “symbolic,” this is real. Repealing FATCA is the best chance to get RBT and other needed reforms.
I don’t think that opposing FATCA means supporting tax evasion. I just don’t think it can co-exist with CBT. It turns citizens of other countries with no financial connection to the US, into tax evaders. I’ve heard that the best way to repeal a bad law is to enforce it. Perhaps FATCA will be the downfall of CBT. I would also imagine that there is a good chance CBT is unconstitutional. I wonder if anyone has ever challenged it.
IF CBT is such a great idea, then why don’t individual states adopt it??? If you’re born in California, you pay California taxes for the rest of your life regardless of what state you reside in (your children and possibly grandchildren as well). Surely that would put a stop to all of these tax-evading seniors from retiring to Florida for the tax advantages.
Comment just posted on Forbes from RepealFATCA.com:
Mr. Wood, thank you for flagging RepealFATCA.com and the RNC’s landmark move calling for FATCA’s repeal. The fact is, there is nothing symbolic about getting rid of “the worst law most Americans have never heard of.” If institutions around the world put even a tenth of one percent of what they’re spending on compliance into educating Congress and the public about this monstrosity, the law would be history. By all means, let’s pursue and prosecute tax evaders, but there’s no need to create a global fishbowl to do it, with vast majority of people whose privacy would be violated (without probable cause) middle-income individuals who owe no taxes anyway. As for real “fat cat” tax cheats – they’ll slip the FATCA net, because they have the resources and criminal intent to do it. Defending FATCA as a weapon against tax evasion is like defending Prohibition as a weapon against alcohol abuse. Whatever good might incidentally come of it is far outweighed by unintended negative consequences.
We see frequent statements from FATCA supporters that it is inevitable and cannot be defeated. But several large and important countries have not signed IGAs and there will be serious friction if the US tries to impose FATCA without these in place. I wonder if they are just shaking the tree to get their OVDP apples for as long as they possibly can before backing down?
Yes, the inevitable statements are down right creepy. “here take this pill, nothing you can do to fight it, just relax and swallow it, there, there it’ll all be over soon.”
Really slithery snake creepy type statements usually coming from those who make money off of FATCA.
The following comment was just “Called Out” at Forbes. I wish I could see why.
Forbes Called-Out Comment Alert
Your comment was called out!
On this post: Is Opposing FATCA Supporting Tax Evasion?
” Too much mechanics my friend, too much burden being placed on people and FFIs around the world … too many forms .. too much information …. and information that is dangerous. I don’t think that US Persons will appreciate being identified as such by FFIs around the Middle East … a simplistic example. I don’t think that Venezuelans, Bolivians, North Koreans, Somalians, Eritreans, Lybians, Syrians, You Name Whereians with accounts in the US will want their information reported to the countries where they are resident …. do you? Too many dictatorships and too many Politburo Members who think that Governments OWN people. People need privacy … Governments need to be Transparent … the vice versa does not allow for good outcomes.
@nervous investor… being ‘called out’ is a good thing in this case, right? Because that means he is directly responding to your comment.
You have a point Fifi. I wonder whether my comment will make Wood think a little harder about the unintended effects of FATCA.
It’s a rite of passage to get called out by Robert Forbes 😉
Thanks Bubblebustin … you and Fifi have lifted my spirits ! renewed my energy to fight on.
Funny, my called out comment still shows up when I looked back at the Forbes site. Hmmmm … I wonder what “calling out” means.
I don’t know, but I’ve had the impression a “called-out” a comment is one that the author of a Forbes article considers a comment of special merit, like well thought-out opinions or useful information/ideas to add to the discussion. Eg, he said you brought up a point he hadn’t thought of before. Sort of like “If you only have time to read a few comments, read these.”
FATCA is nothing more than TOTALITARIAN IMPERIALISM at its finest. The Soviets and Nazis would be envious.
@All
Guys, “called out” in Forbes parlance simply means highlighted, or that the author has directly responded to your comment. It’s sort of like a gold star, I guess, so you should be happy if you get one. I think everyone thinks it’s like being called down to the principal’s office when it’s not.
I can’t imagine the owner of Forbes, Steve Forbes, being supportive of FATCA. He is a long standing advocate of a simple (low) flat tax.
If the editor calls you out, that most likely means they want to bring attention to your comment because it gives what they consider good insight to the issue.
The great thing about Forbes is that its widely read.
Interesting and positive that the comments called out (nervousinvestor, if he agrees with you then being called out is good) are opposing FATCA.
There is a glimmer of hope…. maybe. The US govt has been stupidly stubborn so often that it’s hard to say if such far-out reasons as logic and evidence will actually move them.
@Samuel Adams
Forbes may be widely read, but not many other than us comment of Robert’s articles, as compared to other ones. I like that he interacts, although it feels like we almost need to de-brainwash him.
Thank you all. Then all is well that ends well. Wood has a new thought or two to add to his analysis of the FATCA fiasco and hopefully more Forbes readers will be encouraged to think a little further out of their habitual box and hopefully start to put some pressure on the movers and shakers.
@Noble Dreamer
I see you signed up on the Belgium blog I was extremely upset when I read the expat had her money blocked from her two bank accounts. They had to prove that she and her husband have paid their taxes.
http://www.expat-blog.com/forum/viewtopic.php?id=330388#.UuaPVxLj0Lc.twitter
@Nervous Investor
I really liked your comments on Wood’s blog.
nervousinvestor 5 hours ago
FATCA is an abomination with consequences for the entire world that will be horrific if it is not reversed now. FATCA is the law that Hitler would have loved when hunting the Jews. FATCA is the law that Stalin would have loved to further his aims and to further populate the Gulag. FATCA is the law that would have cramped the development of the USA and other Western countries since people would not have been able to move any part of their wealth there to escape the reach of dictators of the left and the right. This is the sort of thing that Castro’s army did to Cubans leaving Cuba after the revolution … stripping them of everything even their wedding rings and such like when they were exiting Havana. Make no mistake … FATCA is NOT about tax collection …. the costs will far outweigh the benefits … FATCA is about control of people and their assets.
FATCA will increase the cost of living for everyone …. even the slum dwellers of India and the Third World. FATCA will in due course harm the US economy …. in a very major way.
It is obvious that the millions of people (Snow Birds, Latin Americans and Europeans included) who keep vacation properties in FL, TX, AZ, CA, NY and elsewhere stateside are likely to start to exit the US for fear of being labelled capriciously as “US Persons” and being made International Pariahs in their home and other countries.
FATCA if implemented will speed up the move to abandon the US currency as the World’s Reserve Currency.”
Robert Wood is clearly sympathetic to expats. His article reflects it throughout. But his conclusion is a real downer:
“It may be that the best the expat community can hope for would be an expansion of the IRS Streamlined Program for offshore compliance.”
In other words, keep fighting to change the system, but get that CLN in hand, because change isn’t going to come easy.
@ northernstar – thank you .. We have to all keep on fighting to the very last . I pray that Canada will honour its Charter of Rights and just say NO to FATCA. I am very proud to be associated with the fine people of the Isaacbrocksociety.ca.
I posted the following comment on the Forbes website.
……………………………..
Mr. Wood,
The short answer to your question is no, you can oppose FATCA without supporting tax evasion. It is a sad commentary on the polarization of American politics that such a thing has to be said. Speaking for myself, I am a Canadian citizen opposed to FATCA; I am also a life-long member of the New Democratic Party, Canada’s social democratic party, and a member of Canadian for Tax Fairness. I am very much against tax evasion in any form.
It might be helpful, in replying to the charge of supporting tax evasion, to have an alternate approach available for presentation. Let me try.
There are many faults with FATCA and related US legislation and policies, but I would identify chief among these that FATCA is unilateral and frankly bullying. The problem of international tax evasion requires a cooperative, multilateral approach.
One implication of this is that US must abandon citizenship based taxation. Not only should the US not attempt to impose its legal framework upon the rest of the world, it is not in US interest for all countries of the world to implement CBT; it would require US banks to comply with tax requirements of some 192 UN member states.
Beyond this, there are a couple of ways that the US can show leadership without playing the bully. I can suggest two:
First, the US can get its own house in order and eliminate internal tax havens. Delaware is one; there are others.
Second, the US can change its focus from stopping dirty money leaving the country to stopping dirty money coming into the country. Let me explain.
Cayman Islands is the fourth largest financial centre in the world. However, if you send in the Marines, all you will find there are some expensive condos and office buildings with lots of anonymous bank accounts. The only reason for money to go to the Cayman Islands is for it to be redirected to other, profitable places to invest – tax free, of course.
I propose that the answer is to prevent the dirty money coming in.
The US could change the rules so that foreign investment is only allowed from countries with transparent financial rules, in particular transparent rules as to the beneficial owners of investment. This would allow investment from most developed countries but rule out investment from the notorious tax havens.
Short term, the US would lose foreign investment, which might go to countries without such rules. But the other developed countries could be shamed into similar rules. In the end, wealthy tax evaders could decide to hold their secret money in vaults in tax havens, where it would earn nothing, or investing in secure, developed economies, where they would make money and pay taxes on their profits.
These are the observations of an ordinary citizen without any background in finance.
@NorthernShrike
Excellent comment. I do wish Wood would go into why CitizenBased Taxation is good.
@NorthernShrike – excellent comment. Thank you.
@northernstar – I cannot think of any GOOD LOGICAL reason … though I understand the purpose to be to enforce a state of slavery; to emphatically say “I OWN YOU”.