I often find myself in discussion with some Homelanders and Obama supporters about whether US citizenship-based taxation is a human rights abuse. Below is my argument, first published August 21, 2012, to say that it is unfair. Now I argue that with the implementation of FATCA, the USA has become a serial human rights abuser. Clearly, most people of reasonable conscience accept these kinds of arguments. Even yesterday, I manage to get a chuckle out of an AP reporter who was asking for my story. I mentioned my birth in Chicago, Illinois, and moving as a baby to Alaska. Off the cuff, I said, “Yet Illinois isn’t chasing me around the globe expecting me to pay state income tax.” That’s because once you leave a state, you can no longer benefit from the proceeds of taxation. It is a no brainer. Yet it is not self-evident to Congress and the IRS, which are pursuing US expats across the globe with FATCA regulations in order to make them pay taxes for the benefit of Homelanders.
Many Homelanders are a special breed of bigot who believe that you live abroad so that you can shirk your responsibility to pay for their Social Security, their Food Stamps, their welfare, and their wars across the globe. Well, I for one am sick of this unfair treatment. We pay taxes in our countries of residence, and in Canada in particular, our tax burden is already much heavier than what Homelanders pay. So it is really time to emphasize that Citizenship-Based Taxation is a violation of the fundamental principles of Western democracy, and it is a human rights abuse.
Fair tax, unfair tax: or When is it paying my fair share?
by Peter W. Dunn
In studying historical tax rebellions, I have observed that governments have frequently been ready to commit mass murder in order to maintain their tax hegemony over a people. South Korea committed mass murder against the poor tax revolters on Jeju Island, who rose up in rebellion in 1948; Californians rode out to suppress the Indian tax revolters in 1851; Britain waged war against American colonists who unilaterally declared a permanent tax holiday from King George; the Romans razed the Temple at Jerusalem and crucified the anti-tax zealots in the Jewish War of succession in AD 66-70. Even George Washington, the beloved president who cut down the cherry tree but could not lie about it, personally led the troops against the Western Pennsylvanian tax protestors in the Whiskey Rebellion. No nation which wants to be taken seriously can ever allow a tax revolt. That’s why Irwin Schiff, father of investor Peter Schiff, rots in a Federal prison.
There are lessons to be learned from these examples. The revolts in question in every case took place because the protestors felt that the taxes were unfair. If the tax really is unfair, then protestors will revolt in large numbers, forcing the taxing authority to act. So I’ve decided to point out some aspects of fair taxes which people are willing to pay, compared to unfair taxes that leads to tax revolts.
Fair taxes seem to me to have the following characteristics:
- A fair tax is not onerous and well within the ability of the citizen to pay.
- A fair tax is part of democratic process in which the citizen has a right to vote for a local person who represents the taxpayer’s area in a legislative assembly. Representation in the legislative assembly is also proportional to population.
- A fair tax is proportional, i.e., charges all citizens proportionally to their means and not disproportionally.
- The proceeds of a fair tax must benefit the community of which the taxpayer is a part.
- Penalties for failing to pay a fair tax are proportional to the crime and the damage to the government which claims a right to collect taxes.
The following are characteristics of unfair taxes which will lead to revolt:
- An unfair tax is taken without local representation in a legislative assembly that makes tax law.
- An unfair tax is disproportional and onerous.
- An unfair tax does not benefit the community of the taxpayer but rather, it benefits the needs of others.
- An unfair tax is a weapon to destroy the taxpayer’s community or to make sure that that community never rises in prominence or wealth.
- An unfair tax comes with stiff penalties for disobedience–penalties which include destitution, detention, and death.
- An unfair tax results in the alleged protector becoming the chief enemy and persecutor of the taxpayer.
As any casual observer can see, the United States taxation of its expats fits the description of unfair taxes that I here provide. (1) It is done without local representation; (2) it is disproportional and onerous, not taking into account the taxpayer’s other tax burdens–e.g., Canadians already pay about 50% of their income in Federal, Provincial and Munipal taxes–including taxes for which there is no foreign tax credit (GST/HST); (3) it is done for the benefit of Homelanders not for the communities of the expats; (4) it unfairly taxes the expat’s home countries tax bases to the weakening of those countries for the benefit of the profligacy of the United States; (5) the penalties for failure to comply with US extra-territorial taxation may result in the detention and destitution of the taxpayer–it often leads the taxpayers to renunciation of citizenship, and can even result in exile [Reed Amendment] or death, if the taxpayer commits suicide or resists arrest; (6) The United States has made itself the chief enemy and persecutor of expats.
Historians seldom look back favorably upon regimes that institute unfair taxation. History is now in the making. Will the United States continue down this path of demagoguery and despotism? Will it commit total annihilation of its own expat community through a form of Expat Cleansing which forces all Americans abroad either to renounce their citizenship or return to the homeland? I think so. I see no real signs that this situation will change but only that it will get worse. I hope that I am wrong. Historians will remember this generation of leaders in the United States under a very dim light, and the Isaac Brock Society will be a primary source for their understanding of this period.
I used to be a big U.S. apologist. I had bought into their war on terror and the fact that George W. Bush was going after the “bad guys” and that Canada should help. Well, this viewpoint has changed considerably since my family came under attack from FATCA. I will forgive most anything, but I will not forgive an all-out attack on my family be it physical or financial. Therein lies the reasoning for my switch from being a US apologist to an outright US enemy.
When the United States instituted FATCA, they waged economic warfare on my family. My wife is the big earner in the family and unfortunately, unwittingly, she is the Trojan horse that allows the US to scrutinize our financial dealings. My photography only makes enough to get by if that. I have a bad back from falling down a set of stairs thanks to my mother not maintaining them. So, I do what I can under the physical limitations of my back. I do not collect welfare, I depend on my photography to carry me through.
Our children hold US indicia through her, whether they’ve opted to go American or not; which they haven’t. We haven’t even informed the US consulate of their birth and have no intention of doing so. And my oldest son has the intention of renouncing his US citizenship when he reaches the age of 18 which is in 7 years. Which means Uncle Sam has their claws in the majority of my family.
Peter W. Dunn of The Isaac Brock Society said it most succinctly and accurately that Canadians being taxed by Uncle Sam is a human rights crime. His quote: “Many Homelanders are a special breed of bigot who believe that you live abroad so that you can shirk your responsibility to pay for their Social Security, their Food Stamps, their welfare, and their wars across the globe” is exactly it. Homelanders keep hollering about “paying your fair share”. What is fair share when you aren’t represented in government? What is fair share when you cannot partake of the benefits (welfare, medicaid, unemployment insurance…etc) allowed to all Homelanders? What is fair share when we do not use their infrastructure? Should we have to pay the way of illegal aliens as well as career welfare recipients? Is it because the United States wishes to tax their expatriate indicia just for the simple fact that they carry a blue passport with an American Eagle on the face? Because a tax rate of 29% and fines of over 300% for not filing a stupid piece of paper is quite a steep rate for a little booklet and frankly not worth it in my books.
As of this year alone, the US renunciation rate has gone up 222% in the last quarter of 2013 and Americans are starting to get a bit concerned, but they still have the mindset of “don’t let the door hit you in the ass on the way out” or “Murrica, Fuck Yeah!”. There is a note of exceptionalism and superiority with every “homelander” remark that they make about having to “defend the world” (when in actual fact, they stick their noses in everyone else’s business even when they aren’t supposed to) and “time for those who ride on America’s coattails to pay up”.
It’s not a matter of US exceptionalism any longer. The rest of the world with the exception of a two bit banana republic called Eritrea, taxes their citizens based on residency and not citizenship. Even Russia, a hold out, folded their citizenship taxation when the Iron Curtain fell in 1991. So the United States, a nation 17 trillion dollars in debt holds company with a two bit dictatorship in Africa while the rest of the world tries to tax their citizenry fairly.
But rest assured my diatribe does not single out the US alone. My enmity is for all those nations who capitulated and signed a pact with the devil himself, Uncle Sam. All the nations who willingly threw their citizens under the bus just because they held US citizenship (1/2 of a dual citizenship) are contemptible. Canada recently on February 5, 2014 signed an FATCA IGA and threw 1+ million (5 million or more if you count all those affected) US indicated individuals (Canadian citizens or those who are permanent residents and are seeking Canadian citizenship) under the bus. The Stephen Harper government did an end-run around the Privacy Act and made the banks reportable to the CRA (which has now become an arm of the IRS). Harper and his Tory cronies decided to sell-out Canada’s sovereignty and tried to make Canada a territory of the United States. To this Canadian, the Tories are traitors to Canada and should be imprisoned for life. In fact, I doubt with the exception of Murray Rankin, Elizabeth May, Alex Atamenenko and Linda Duncan there is a politician in Canada that will stand up to and reject FATCA. What the world needs now is a nation with the backbone to stand up to the United States – a nation that is willing to tell the United States where to go and have the might to back it up.
All malicious empires have their Achilles heel. It’s just a matter of finding where the United States’ Achilles Heel is. This attack on innocent expatriates of every nationality just because of US indicia should not be tolerated by any nation.
I did a wrong… I read your post again & realized that I took it the wrong way. I am sorry. So I owe u an apology for my mistake. I need to stay off the boards with the homelanders whining & whining how we should have known.. yada..yada… its come to the point that I need to move off the boards there & stay to a few only becomes I do realize I have become very bitter & the anger is becoming something I don’t want. They don’t get it… If I had known the rules… I would have planned better. At this point of my life… I never thought I would be backed into a corner where I may have to start again. It wouldn’t be so bad I guess if this didn’t involve my entire family. Never thought having a gc or citizenship to the US could make me poor & a criminal on top of it. Just like everyone on this board… our own gov’t just tossed us over for nothing… nothing… So again… I am sorry for mis-understanding your post.
Thank you for taking the time to write this post:
“Now this poor couple must prepare taxes for FOUR countries: Canada (by citizenship), the USA (by citizenship), New Zealand (by maintaining their PR cards) AND Australia because that’s where they are currently living and working.”
Oh, dear God… I got a headache just from reading all of that… RBT is the only way to go if countries do not wish to entrap their citizenry and deprive them of fundamental human rights.
I agree with you completely. I cannot find any reason for them to sign. NONE. All they had to do was call their bluff, for surely they ARE bluffing. The entire world looks to Canada , particularly as the US is our largest trading partner and long time friend.
Since 2009 however the US has become much less than they used to be and the combined pressure from Canadian banks and the IRS threats made it clear they needed to protect the banks. The IGA gets around the privacy rights and if the Conservative government wants to get around the Charter of Rights they will have to use the Notwithstanding Clause.
They intend to plough this through parliament it would appear and it is also clear that most MP’s have NO clue just what the IGA is and the harm it will do. I doubt they will read it but will be expected to vote as they are told. It is important therefore that our opposition parties need to be even more vocal than they have been to date ( and they have been excellent) raising this in the House of Commons .
In addition I am hoping those who have expertise in these matters like Peter Hogg on the Charter of Rights and Allison Christians as a Tax Lawyer can weigh in on just what recourse we have in preventing this from passing in parliament.
I did it, finally. Listen to this broadcast
cknwnewstalk980 – The World Today – Thursday Feb 13 – Hour 2
from minute 9:15
This is the guy who I believe buried his head and wouldn’t address this for so long.
So tonight about 50,000 Lower Mainland citizens heard the bad news
I think the main reason the US treats it’s citizens like prisoners who are never allowed to leave even when they move to another country has to do with how wealth is distributed in the United States.
The top 1% not only have an unfair amount of the wealth in the country but they also account for a very high percentage of the actual total taxes paid. If even a tiny sliver of the 1% start to leave the country the United States is in big trouble because there’s no way the government can make up for the lost tax revenues.
If income was more evenly distributed (I’m not talking communism evenly distributed, just a tiny bit more fair) then if a citizen expatriates the government would not have a freak out because they could continue on as they were.
Thank you for your kind words. No need to worry. DO KNOW you are not alone in the feelings you express. I feel that way too. MORE than you know!
The criminals can call us criminal but it does not make us criminals.
This is oppression pure and simply and it is also ELIMINATION.
Elimination of opposition. Elimination of power to fight back an onerous
and brutal regime intent on stealing everything not nailed down on the planet. Our hard earned financial lives are not theirs to use to further whatever they have planned. NOT the government nor the banks.
( I do NOT forget that the budget last year on page 145 speaks of “bail ins”) Thereby announcing their acceptance to the concept that once you deposit money in a bank it is now THE BANKS money!)
And now the IMF and EU are OPENLY calling for confiscation of ALL bank deposits. So they can balance their payments. Translation: STEAL other peoples money because they have so mismanaged and stolen so much they have nowhere else to turn but stealing EVERYTHING.
That, combined with the Canadain capitulation on FATCA tells us all we need to know about the mindset of our government. The banks rule and if they want our money they will not stand in the way of their taking it.
So, bail ins, FATCA snooping, IGA’s signed with entities with no legal authority to negotiate… it all says we are hanging out here with our lives at risk . At this point it looks like there are no champions for our cause but I think, actually, that there ARE those who will band with us.
In the meantime it is essential ( I know at least it is essential for me) that we get together and work together in like mind here at IBS and elsewhere where we can effect an overwhelming message that says NO.
There was nothing more deflating, angering and sobering than to learn that Canada had signed that damned IGA. That those we had hoped would stand for Canada and for us and for the Charter were nothing more than mealy mouthed weasels with NO backbone.
Chears, thanks for the link to the radio broadcast. “Incentivised”? Is that some sort of new word or something, b/c it doesn’t register on Websters. Is this some new fancy way of saying “extorted”? Because if anything, I think expats feel like they were extorted.
I repeatedly tried to warn Michael MacKenzie Executive Director
and some others at CSA
about what was coming but these assholes didn’t even have the courtesy or decency to reply to me
Now their organization will probably go down the drain.
Man Canadians can sure be arrogant and stupid, eh Michael?
GOLD is up another 10.00oz an almost daily occurrence. It’s now 13.06USD and 14.28CAD Got your physical gold and silver yet?
I didn’t see your question about the ‘last in time’ or ‘later in time’ or ‘subsequent-in-time’ rule until just now.
I didn’t know about that aspect of US exceptionalism until reading here at IBS, and hearing about that and the ‘savings clause’ and all the flaws in the existing US-Canada Tax treaty. Probably someone else here like Tim or Just Me, or Mark Twain may know more about that aspect of things.
This from Allison Christians connected the dots re FATCA:
“In other words, the IRS is saying that not only does the “last in time” rule apply to IGAs (as they would to any US international agreement), but we’ll apply the last in time rule to other countries too (even if under their own laws the treaty would override later-enacted domestic laws); moreover the last-in-time rule is now extended to treasury regulations (a unilateral law that will be used to “interpret” a bilateral agreement, yet another controversial treaty interpretation position), and finally we are going to make it the treaty partner’s choice to pick among the regimes to get the best result (which treats treaty partners not as negotiators in a bilateral agreement but rather in the same way as taxpayers subject to an elective regime).
It is getting progressively more difficult to keep up with the sheer volume of violations of laws and norms being undertaken by the IRS in order to get FATCA to work. It is rather disheartening (in the sense of being a scholar who studies legal process as though it matters) to realize that to many or most people involved in this project, all of these violations are just technicalities and semantics getting in the way of a result everyone wants.”
I saw this too:
……….”……..When a statute conflicts with a treaty, the later of the two enactments prevails over the earlier under the last-in-time rule. The rule and its rationale were articulated by the Supreme Court in Whitney v. Robertson:
By the constitution, a treaty is placed on the same footing, and made of like obligation, with an act of legislation. Both are declared by that instrument to be the supreme law of the land, and no superior efficacy is given to either over the other…. [I]f the two are inconsistent, the one last in date will control the other…. If the country with which the treaty is made is dissatisfied with the action of the legislative department, it may present its complaint to the executive head of the government, and take other measures as it may deem essential for the protection of its interests…. The duty of the courts is to construe and give effect to the latest expression of the sovereign will.
Sorry, @Em and @all, here is the link to the comment I quoted by Allison Christians (see above) about the last-in-time rule as applied under FATCA; http://taxpol.blogspot.ca/2013/03/irs-brushes-aside-constitution-to-make.html
Monday, March 4, 2013
‘IRS brushes aside the constitution to make way for FATCA’
Thanks for that extra information. You have everything at your fingertips. Your filing system is amazing. I couldn’t even remember the name “last in time” until bubblebustin put me on the right track. You are better than a 10 foot stack of encyclopedias.
This is exactly way I rail against “citizenship by birth,” or “accidental location of one’s birth.”
I didn’t choose to be born in the Empire, and I don’t plan to hang around.
Government border crossings are for those who have already given up their sovereignty. They’ve never stopped the persistent, nor will they ever.
The Boot-Strap Expat
“By the constitution, a treaty is placed on the same footing, and made of like obligation, with an act of legislation”
And therein IS the RUB: IRS has NO authority to sign treaties with countries AT ALL.
Congress has NOT authorized the IRS to negotiate an IGA with anybody at all.Nor would they ever. The IRS is a tax collecting department. Not a viable representative for negotiating anything with any country.
FATCA is illegal on it’s face and in detail. They could NOT implement their plans unless the countries in question AGREED. So, they came up with the Intergovernmental Agreements.
As Senator Rand Paul states: NO authority has been given to the IRS to negotiate IGA’s with any country anywhere. They knew they could not force countries to do what they wanted and had to do an end run around a country’s sovereignty and privacy laws by bullying their way into getting an IGA signed.Threaten the banks with sanctions they could not back up nor would they ever be able to get US banks to reciprocate. They pushed and shoved and had the banks quaking in their boots who pressured OUR government to give them what they wanted while Canadians are exposed to financial extinction.
Serious moves in the Senate and House are underway to repeal this horrid thing, so Canada should have stalled and hemmed and hawed or stood on principle and said NO.
They would have the backing of the Congress to do so. IRS can NOT do what they threatened without the permission of a country to do so. That is what makes this so damned maddening.
Yes Citizenship-Based Taxation is a violation of the fundamental principles of Western democracy, and it is a human rights abuse.
List of countries who have betrayed their citizens by signing IGAs.
Model 1 IGA
• Canada (2-5-2014)
• Cayman Islands (11-29-2013)
• Costa Rica (11-26-2013)
• Denmark (11-19-2012)
• France (11-14-2013)
• Germany (5-31-2013)
• Guernsey (12-13-2013)
• Hungary (2-4-2014)
• Ireland (1-23-2013)
• Isle of Man (12-13-2013)
• Italy (1-10-2014)
• Jersey (12-13-2013)
• Malta (12-16-2013)
• Mauritius (12-27-2013)
• Mexico (11-19-2012)
• Netherlands (12-18-2013)
• Norway (4-15-2013)
• Spain (5-14-2013)
• United Kingdom (9-12-2012)
Model 2 IGA
• Bermuda (12-19-2013)
• Japan (6-11-2013)
• Switzerland (2-14-2013)
“I used to be a big U.S. apologist….”
I never was a US apologist, but I’ve certainly turned more conservative after learning what Obama is all about. If only I knew then what I know now, I would never have voted for the son of a bitch for all the good that would’ve done.
I share your sentiment and your frustrations 100%. If only the world was a sane place, unfortunately.
It is to my mind that it is highly likely that Canada was given ‘an offer they couldn’t refuse’ by the US, and that things could’ve gotten ugly real fast if Canada chose not to sign. I believe that The_Animal also mentioned something to that effect in a different post, and I have no reason to doubt him on that. Yes, I’ve had my little rant at Canada, but I also realize all too well that it is the US that’s ultimately pulling this kind of shit, and not Canada.
Canada has to do that Canada has to do in order to survive as a sovereign nation. We all must do likewise. Hell, my biggest pissy fit has to do with Harper wanting to make me wait for another year before I can apply for Canadian citizenship, and that is because I want to relinquish US citizenship without me being stateless. I’ve even heemed and hawed over what to do, and even thought about going back to the States. I guess I may as well wait another year if I really want to be rid of US citizenship, even though it’s still a shitty thing that Canada did by throwing its duals with US ties under the bus. But you know what? Since I have no interest in being a dual citizen anyway, I’m still better off relinquishing US citizenship, and so will my wife be if I relinquish.
Americans denounce their citizenship over predatory tax system
Get used to reading and listening to RT and Pravda and other media outside our sphere in order to get the truth these days. Get used to a wholesale rejection of anything American and Canadian……Say to yourselves “the brainwashing stops now”
EM, many of us would like to know which countries have NOT signed a pre Fatca agreement. I say pre Fatca because it is not in effect in any country right now although some foreign banks are denying Americans the right to open an account. It’s easy to claim that “you should do it because everyone else is” when in fact NO ONE likes this and the future for FATCA is a flamboyant and embarrassing death.These banks are quite interested in a violent resolution as they further this goes we may hear about yet more banksters jumping to their deaths. 6 so far this month. Please someone start a web site to keep track of what I hope will be a trend.
“That those we had hoped would stand for Canada and for us and for the Charter were nothing more than mealy mouthed weasels with NO backbone.”
This includes every lying scumbag constitutional lawyer in this country with no gonads or had no intent to face down the Americans. I think all of them were bribed in fact and stand for nothing, especially freedom and liberty. I’d like to run them all out for their betrayals. Again, in my opinion there isn’t a lawyer in this country that believes in anything except money. They would sell their childrens future to make a buck and not anger their party affiliates. A real web of deceit
Not only are they rolling out FATCA but have a look at the TPPA. Several governments are about to sign on to this at the USA’s demand. It’s basically written by US corporations, the details are secret and hidden from all. No one has access but the US and their corporations. Some of it has been leaked and is incredibly worrying, especially to the sovereignty here in NZ. Imagine.. US corporations able to sue NZ for not allowing them to do as they please here. Already rumours that US tobacco companies will prevent NZ from using blank packaging on cigarettes (our new initiative to save lives). Apparently even parts of the agreement make it illegal for NZ citizens to form protests against US corporations (March Against Monsanto) for example. Most Americans seem oblivious to their country’s abuses and can’t fathom the US would do anything evil.. there is no time for such thoughts.. just get back to watching sport and reality TV.
I might agree with you on the whole but not entirely. If not for John Richardson and his colleagues who made the submission to the Senate Ways and Means Committee on January 17, 2014. This submission has the potential to be one of the most important submissions ever made on our behalf.
The Trans Pacific Partnership is FATCA on steroids. They intend to end sovereign nations. No borders essentially and that Corporations have all the rights and individuals have none whatsoever. Canada is a part of this and is expected to sign on to this putresence as well.
Americans have HAD it up to “here” with the IRS: