This is the way I see the immediate future.
1. Continue our lobbying and support for the Charter Challenge;
2. Get our personal situations in order regarding the $50,000 thresholds and plans to cross or not cross the border — many solutions are possible;
3. Clarifying the Credit Union story [if they are indeed excluded because of the 2% rule this is a great chance to move the equity agenda forward and nail the banks]; and
4. Sit back and wait to see the storm that arises when 1,000,000 Canadian citizens — most of which are still probably oblivious to all this — are thrown under the bus.
Thanks for the post, Joe Smith.
Pray (and anything else that might better work!) to get :
(4.) ‘the 1,000,000 Canadian citizens (with US ‘indicia’), most of whom are still probably oblivious to all of this*, join with
(1.) the rest of us in our lobbying and support for the Canadian Charter Challenge, as we
(2.) help them with information to make decisions to get their personal situations in order, including
(3.) perhaps moving to Credit Unions after that story is clarified.
*Refer those newcomers to: http://isaacbrocksociety.ca/2014/03/29/may-2-2014-aca-sponsored-toronto-forumdebate-on-cbt-vs-rbt/, and
http://isaacbrocksociety.ca/2014/03/04/solving-the-problems-of-u-s-citizenship-information-sessions/.
Brilliant!!!
move to Antartica
A few thoughts on the “the Way Forward”
I believe that it’s important how the problem is “framed”. And to learn from the lessons of history.
The current U.S. jihad on its innocent expats and US-born Canadians more as a SYMPTOM than any kind of clear policy, and there are a handful of self-interested parties driving the bus. It has no larger public policy profile and most Americans – and Canadians – are as unaware of this issue as they were of AIDS in the early 1980’s. Only when AIDS reached a critical mass of public awareness – caused by the harm it was doing – was effective action possible. (1)
The FATCA mess is a symptom of the expanding state of dysfunctional illusion in US society. The illusion: its current > 15$ trillion deficit was partially caused by people hiding their money offshore. In reality it’s the result of wildly reckless spending and borrowing: military expenditures that exceed the next 13 countries combined and a vast welfare state of public entitlement payments, funded by public debt, much of which is held by US government entities themselves. It’s a Ponzi scheme where they are their own best customers. (2)
Where is this going? It’s vital to have a strategic overview, but on day-to-day be tactical and realistic. One model to consider that of the British naval destroyer’s commander hunting U-boats in WWII Battle of the Atlantic. Surrounded by many hidden, potential and constantly shifting threats, its important to track them strategically, but usually only a focused and realistic tactical response to one threat at a time is practical. (3)
Finally – my partner’s family descended from German Jews. One branch of the family left Germany in the 1920’s to flee antisemitism, emigrating to Canada, where they took up citizenship. It was very painful to leave their homeland and change their nationality. But they felt threatened and disenfranchised, so they acted while others around them “sat tight “and “hoped for the best.” The rest of the family who stayed behind in Germany perished in the Holocaust .
REFERENCES ( AND MAYBE INSPIRATION)
1. “And the Band Played On: Politics, People, and the AIDS Epidemic” .
By San Francisco Chronicle journalist Randy Shilts, published in 1987. While AIDS was caused by a biological agent, incompetence and apathy toward those who were affected by AIDS allowed the spread of the disease to become much worse; AIDS was allowed to happen.
2. “Empire of Illusion: The End of Literacy and the Triumph of Spectacle” by Chris Hedges. Hedges argues that the US has two societies: One, the minority, functions in a print-based, literate world, that can cope with complexity and can separate illusion from truth. The other, a growing majority, is retreating from a reality-based world into one of false certainty and media sensationalism.
3. “The Cruel Sea” is a 1951 novel by Nicholas Monsarrat. It follows the lives of a group of Royal Navy sailors fighting the Battle of the Atlantic during World War II. Based on the author’s serving in corvettes in the North Atlantic in World War II, it gives a matter-of-fact portrayal of ordinary people learning to fight and survive in a violent, exhausting battle against the elements and a ruthless enemy.
“and a vast welfare state of public entitlement payments,”
Actually the USA has the weakest welfare state with virtually no public entitlements except for social security and medicare for the elderly. The problem is a very weak progressive taxation system that lets the rich laugh all the way to the bank while 80% of Americans live on stagnating or declining incomes. http://www.oecd.org/els/societyataglance.htm
the new US ambassador wants our input
He and his wife, Vicki, released a video expressing their eagerness to meet Canadians and discover the country. They asked Canadians for their input through social media on what sights they need to see once they arrive.
Thanks, Patricia. Do you have a link for his request to hear from us?
Ottawa Embassy: Bruce Heyman was sworn in as President Obama’s personal representative to Canada on March 26, 2014, after having being confirmed by the United States Senate on March 12, 2014.
U.S. Embassy Ottawa regularly puts out a newsletter highlighting important aspects of the U.S.-Canada relationship. You can subscribe here!
The Vancouver Sun, March 26th: “Bruce Heyman, new U.S. ambassador to Canada, sworn in, ready to move north”
Only available to subscribers: “Much-delayed ambassador arrives at testy time for Canada-US relations”
The Globe and Mail – by Paul Koring – 19 hours ago (I wonder if this is partly relating to FATCA? — Anyone have access to this?)
Still trying to regain some balance here.
@Patricia, do you have a link to that request?
@calgary411
all the items quoted his desire for our input, but no link to any place to provide our input
I don’t think we should forget that FATCA is merely the starting point. The US is hardly the only country that has a financial black hole to fill in and as we’ve witnessed, many other countries are eager to begin extracting tribute from their far flung diaspora (and corporations).
In the USG, it is the lack of interest and will to tackle meaningful tax reform that allows FATCA to flourish, but I can’t quite believe that Canada is going along simply out of fear. The govt can and does push back on tax issues (they are currently battling a new quest on to tax ports on the west coast) when it feels that Canadian interests are at stake. For some reason, FATCA isn’t considered the same way and it would be enlightening if we really knew what our govt has to gain via FATCA – because there has to be something or it wouldn’t be happening.
I would be careful about instructing people about the 50k or credit union rules. This is an open forum and the conversations that follow might lead to people being accused of tax evasion, or helping to facilitate it, even though that isn’t the case.
Thanks, Patricia.
He may then be a man of words and no action as his predecessor, Ambassador David Jacobson of no harm to Canadian grannies fame.
“When we talk about … any political awakening, really – the emotion that’s often being awakened is panic. It’s the feeling of being abruptly and extremely destabilized, as if a rug is pulled out from underneath you and you realize there hasn’t been a floor this whole time.”
Giller prize winner Lynn Coady, Spring 2013 edition of Eighteen Bridges magazine
To those in their OMG moment: it is government’s job to build stability beneath Canada’s citizens and residents. But the federal government has helped tear the floor up. Turn panic to anger and action.
To Brockers, thanks for everything.
Thank you, Brockers, for all you are doing.
Stay away from the US.
FBAR-type reporting for some Vegas gamblers. Hello, Mr. And Mrs. Chinese Visitor. Oh, you want to buy chips? Ok. And the source of your money is?
Exclusive: U.S. to require casinos to vet high rollers’ funds – sources
http://www.reuters.com/article/2014/03/26/us-usa-casinos-moneylaundering-idUSBREA2P1P120140326
@YogaGirl, re: “I would be careful about instructing people about the 50k or credit union rules. This is an open forum and the conversations that follow might lead to people being accused of tax evasion, or helping to facilitate it, even though that isn’t the case.”
I may ruffle some feathers for saying this, but the first thing I thought when I read your comment, was, “yeah, don’t help hide the Jews because that might lead people to being accused of being one, or of helping to facilitate the escape of one.”
I just hope that the new ambassador Bruce is honest enough to make a statement to Americans, US indicia, Canadians born in the US etc to let our citizens know about FACTA and the IGA. The sly reporting is so unjust. I just learned about it one 7am morning when the CBC announced the IGA was signed by our finance minister and when I found out how uninformed I was….horror struck. The IBS site has been a
welcomed education for me.
The number you need to be concerned about isn’t 50 K- it’s $ 1 million in non registered accounts.
Registered accounts are exempt. An existing account below 1 mill., opened without US indicia, will not be a problem.
The border isn’t a problem ( no one has yet been turned back – a very few have been told they should get a US passport-advice that can be ignored)
Moving to a CU is OK but not particularly useful
You need to read between the lines. Canada and the US have agreed with a wink and a nudge that Canadians living in Canada are not high priority. US hasn’t the resources for low priority persuits.
@Duke of Devon: “Canada and the US have agreed with a wink and a nudge that Canadians living in Canada are not high priority. US hasn’t the resources for low priority pursuits.”
To which I would add “…, yet.” FBAR was ignored for decades but today the IRS calls it a “priority” (translation: source of funds). Once the US has shaken down all of the low hanging fruit, it will turn elsewhere. It might take a few years, but it will occur. We’ve seen this time and time again.
@ Duke of Devon
Yes, at this point, it probably is “wink and nudge” but that doesn’t stop them from sometime in the future bringing out the “Guilty of Form Crime” stamp and pointing a penalty pistol at recalcitrants and non-compliants. They’ve created a control/extortion snowball and they have it poised at the top of a slippery slope. You are right about the border not being a problem, for me at least, because I won’t be going there — ever.
As I see it, everyone impacted must make an initial decision about how they see their own situation by answering some of these questions:
1. Have I relinquished whether or not I have a CLN?
2. Do I want to reserve the right to claim citizenship in the US at some date in the future and does that mean much (or anything) to me?
3. How much inconvenience would it be were I not permitted to cross the US border?
The above is of course only a partial list. The point being there are a lot of variants in each case and a blanket answer cannot be given to all.
You ultimately need to decide for yourself how you see your own situation vis a vis US law and requirements, reasonable or unreasonable though they may be. FATCA certainly is an ominous sign for those who want to simply ignore the US, but I would not exaggerate its practical impact. Consider:
1. It is highly UNLIKELY that your banks actually have any record of your place of birth. Nothing in the IGA obliges them to find out unless you open NEW accounts, and even if you do open new accounts the Finance guidelines suggest that routine self-certification (Are you a US Person? yes or no?) will allow anyone who believes in good faith that they have relinquished to answer “no” and be done with it. If you are in any doubt as to what records your banks have either (a) switch now (including to a Credit Union); or (b) ask them. However, if you look at the account opening forms, there simply is no place for place of birth or even citizenship as a criterion (unless of course you volunteered a US passport as your main form of ID!).
2. If you are near the reporting thresholds, by the way, it would seem that you could open up a separate savings account somewhere else to bring your total below the $50,000 reporting threshold.
3. You are at greater risk of having provided citizenship or place of birth data with a brokerage account (including on-line self-serve accounts). If you are with your bank’s tied brokerage, see point (1) above (i.e. find out what they have or consider simply moving your accounts to a new bank where you can self-certify on account opening if you have in fact relinquished).
FATCA/IGA IS going to be a tremendous pain in the neck for those who are permanent residents of Canada only (i.e. US citizens only) or who wish to retain dual. For these, the Court challenge may well defer the day of reckoning. However, if as and when you exercise your right to return to the US, I suspect you will be in a world of pain for decades of missed filings if you don’t face the situation (or become a Canadian asap!)
Up until now, I have seen no evidence that anyone has had any particular issues crossing the US border with a Canadian passport showing a US place of birth. The occasional frisky border guard asks a question or two, but nobody has been seriously held up UNTIL NOW. That may change – it is beyond our control and beyond Canada’s control. Worry about things you can influence. The only way you can remove the risk is become one of them – the price is between $0.00 and your entire net worth and very little chance of nailing it down with certainty in advance.
Make no mistake – I thoroughly resent the implication of second class citizenship inherent in the IGA and strongly believe in the Court Challenge as being a viable and valid way of protecting equality and privacy rights. However, I think some on this Board may be losing a bit of perspective. If you are Canadian who does not accept the existence of any US obligations, it is very likely nothing is going to change for you in fact. You might have to shuffle an account or two to reduce risk, but if you can assert relinquishment (with or without a CLN which has never been mandatory), there is every likelihood the status quo will be preserved. The US laws and their implicit threat are ridiculous and everything else we could care to mention, but they have been around a while and will likely be around a while longer.
Anne Frank: “FATCA/IGA IS going to be a tremendous pain in the neck for those who are permanent residents of Canada only (i.e. US citizens only) or who wish to retain dual. For these, the Court challenge may well defer the day of reckoning. However, if as and when you exercise your right to return to the US, I suspect you will be in a world of pain for decades of missed filings if you don’t face the situation (or become a Canadian asap!)”
That’s all fine, well, and good. My wife on the other hand does not want to go back to the States…ever…but being of the lower end of the financial scale, our money has gone towards survival (food, shelter and trying to survive) and our children’s welfare comes first. And now with the wait times for pushing through the Canadian citizenship applications, it now becomes a foot-race as to what will happen. Will the US get to us before we can jump through all the hoops? Hell, retirement funds? What’s that? We’re going to be working till the day we drop dead – because there’s no way in hell that I’m sucking on the welfare teat. I’d rather starve first. My wife also dislikes the fact that people who aren’t willing to work south of 49 are sticking their hands in our pockets demanding that she “pay her fair share”. The ultimate fact is: she wishes to shed her anchor but to shed that anchor takes funds that we don’t have and probably will have to sever from the welfare and upkeep of our children just to make possible. Can you tell me if you think “that’s fair” with the laissez-faire statement of: I suspect you will be in a world of pain for decades of missed filings if you don’t face the situation or should we just reconcile the fact that we’re ultimately going to get screwed?
@ Joe Smith
Yeah, my description of “vast welfare state” was misleading. The US ain’t Norway – or even Canada – in terms of public support for obviously good things like health care and education.
Points I was trying to make were:
– US spends far more than it takes in, because rather than rational tax policies, it borrows money and then pays the interest by printing more money.
– Demographic pressures make big entitlement programs like social security and medicare unsustainable – and municipal and state governments are being bankrupted by pension entitlements.
– Dumb immigration policies make it difficult for the young ambitious immigrants America needs (to offset its expensively aging population) to go there. And there are about 11 million illegal immigrants in the US now – many hardworking and productive – who want to be citizens but their path is blocked again by bad laws and dysfunctional leadership.
– Steep decline of a once robust industrial sector with well-paying jobs and benefits gutted America’s standard of living. Thus >40 million get Supplemental Nutrition Assistance Program aid (SNAP – formerly ‘food stamps’) – more than the entire population of Canada.
– Imprisoning more people per capita than any other country is very expensive and does nothing to build a sustainable economy. The US corrections economy is a vast industry where the imprisonment of minorities for victimless drug crimes enables a huge transfer of public money to both private interests and an expensive bureaucracy. Again – a stupid and unproductive way to spend money.
I don’t want to dilute the focus of the thread. But in seeking a Way Forward, my suggestion is to see the FATCA jihad as another symptom of deeply dysfunctional public policies – as opposed to a uniquely sinister and carefully thought out plot. It’s as much about inertia, folly, illusion and apathy than anything else.
@Wondering: And we are supposed to feel sympathetic when we’re viewed as “wealthy tax cheats” and expected to shell out “our fair share” for United States infrastructure that we don’t use no matter what status we are in any foreign country of residence (whether citizens of that country or permanent residents). We do not use the US infrastructure and I could care less about their immigration problems. Their immigration is their problem not ours. And the simple fact that the US has a gun in one hand and is sticking their free hand out demanding money is testament enough to the fact that they are an extortionist national entity in the same vein as Saddam Hussein or any of the dictatorships that they so vociferously malign.
whitekat, why do people throw out holocaust/nazi references so casually?
It’s not about not providing information but disclaimers are a good idea. The fact that expats and accidentals don’t actually owe taxes, so evasion isn’t even a question, hasn’t stopped the pro-FATCA and the USG and the Canadian govt even from using the tired narrative. There is no reason for us to feed it either. We can provide valid information without carelessly dumping fuel on the fire or giving our critics ammunition.
Yogagirl: Like they say… if the shoe fits…
As far as I’m concerned, the United States declared war when they decided to go after the US diaspora of duals, accidentals and permanent residents of foreign nations. These were people who voluntarily attached themselves to the expected protection of their host nations and were betrayed for “thirteen pieces of silver”.
@wondering
The ultimate problem is that the way that the U.S. budget is drawn up drives up the costs. The U.S. tax code ends up being unusually cushy towards the powerful top end. for example, inheritance tax threshhold of $5.3 million for U.S.citizens. Individual members of Congress vote for stuff that voters like, knowing that they won’t be held personally responsible when the deficit gets too high. The U.S. stands out for having a high percentage of debt to government revenues, not for having too high a debt to GDP. Interestingly,
Nicholas Kristof in the New York Times commented that Charles Schumer is one of the major defenders of a rule that benefits private equity companies, so maybe FATCA is a diversionary tactic.