Not That Lisa brings to our attention: Foreign Account Tax Compliance Act Hurts Law-Abiding Americans Living Abroad
George agrees:
NTL, thats an important article from Heritage and it should garner publicity. Can we link to it on a side bar?
Not That Lisa says:
Yes, it is important because the Heritage Foundation is a major, well respected, conservative think tank. I hope Solomon Yue at Republicans Abroad is aware of this article. It might help to booster his platform within the party.
Anthony B. Kim is a Senior Policy Analyst for Economic Freedom in the Center for Trade and Economics, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation. Curtis S. Dubay is Research Fellow in Tax and Economic Policy in the Thomas A. Roe Institute for Economic Policy Studies of the Institute for Economic Freedom and Opportunity.
They start by saying:
On July 1, the Foreign Account Tax Compliance Act (FATCA) will fully take effect. FATCA is supposed to reduce tax evasion by making it harder for tax cheats to abuse tax havens. In practice, however, FATCA is forcing law-abiding American taxpayers residing overseas to bear enormous financial and legal burdens.
Congress should reform FATCA so that it does not hurt innocent Americans residing and working overseas. More important, Congress should turn its full attention to broader tax reform that would help curtail tax evasion in a more effective way without resorting to onerous and intrusive regulations such as FATCA.
I honestly disagree with the part about nobody realising the collateral damages. I think they know full well and are doing nothing, in order to collect steep penalties.
The FairTax as proposed in HB25 is the answer. It ignores the obvious vindictive Senators and congressmen’s belief that capital should be under their control. Central Planners failed all over the world and everywhere the income tax has been tried it has filed and they are too short sighted to even know of the failure much less avoid it. It is all about campaign contributions.
The Tea Party, emulating the original Tea Party, will come into power within 6 years and they are all primed to institute the FairTax, especially those who are members of the Tea Party and the Americans for Fair Taxation. Cantor lost in a primary bid spending 5 million in campaign contributed dollars and the Tea Party guy, Brat, spent 100,000, but is in touch with the people who are so feed up with the campaign sucking D,C, congressmen.
The mention of Obamacare reminds me of a the heated discussion I had with a ‘regular’ Canadian friend over the weekend. I told him that CBT would make me a single issue voter in the US if I ever voted there again. This highly educated man castigated me for refusing to recognize Obama for the wonderful things he’s doing for the less fortunate in the US.
Let’s just say that its going to result in more than a little confusion for those like him to realize that their Canadian political party of choice, the NDP, are the party most vocal against what the Democratic Party in the US has created!
I have never been an law-abiding American citizen working overseas. The article laments damage done to “Law-Abiding American Taxpayers Working Overseas”. First I was a student studying in Vancouver. Then I married a Canadian. Then I lived in Europe and studied there. Then I moved back to Canada with my Canadian wife and became a permanent resident of Canada (=American Green Card holder, who by US law are consider taxpayers of the United States).Then I became a Canadian citizen. But I’ve never been a “Law-Abiding American Taxpayers Working Overseas”. That is a category of expat that applies perhaps to people working who are temporarily moved by their US firm to live and work in another country temporarily, and it doesn’t apply to too many people–almost no one that I know.
So in other words, I resent and am disgusted with any American Homelander who seeks to control the terms of the debate. FATCA to me isn’t about making it harder for Law-Abiding American Taxpayers Working Overseas. It is about destroying the sovereignty of other countries to protect the privacy of their own citizens and permanent residents.
@Petros,
Countries can just walk away from FATCA. They don’t have to sign onto this. They don’t have to invest in America. For a very long time America has been an incredible growth engine. Huge numbers of people around the globe want to invest in America and consume it’s products.
Countries are signing up to the bad stuff of FATCA (and nobody likes this) in order to keep getting access to what the perceive of as an incredible market. Now of course this may all change and FATCA itself dames America as a destination for capital.
Your problem is that your local economies don’t produce enough for investors so you have to make a deal you don’t like. First and foremost the blame lies with your local government.
Yes America is a bully and this stuff is totally unfair. It’s a massive tax on those with any kinds of assets the Americans can net. Hey we voted (well not me personally) for a guy who said he wants to take stuff from those with and give it to those who deserve it more. It’s the Obama tax so many people voted for.
If China gives in and signs on then this crazy thing could end up working for America. Hell the rest of the world seems to like the idea. They probably wished they came up with it themselves.
America brings you the socialism that the socialists couldn’t quite get in their own countries.
“Wilton Tidwell says
June 12, 2014 at 8:13 am
The FairTax as proposed in HB25 is the answer. ”
Even though I probably agree with you, it is not going to happen 1/2 of US voters do not pay income taxes
@Neill
You don’t get it. Certainly one taxes the rich to give to the poor. But America should do that IN THEIR OWN COUNTRY. Instead- they are trying to get the money from people who are paying taxes to help the poor where they are living. They are trying to tax people who have zero to do with America. They are trying to make people “american” who don’t consider themselves to be so. America is like the DDR in that they are forcing people to stay within their grasp. And the ONLY reason other countries are giving in to FATCA is because they are being bullied into doing so. None of them do it voluntarily or because they think its a “good idea”. You are talking american exceptionalism – this stuff is just flowing out of your mouth because you have been brainwashed for your whole life. You keep falling for the propaganda being fed to you each day in US media.
@Polly.
I am not a bloody American so I can’t have been brainwashed my whole life.
Let’s say you live in France. You make a little money you want to invest. You likely want to invest some of that money in America because America is more productive than your own country. So a lot of wealth in France is invested in America. France has to give way to the Americans. If more countries competed with America they could tell it to get stuffed and invest their money elsewhere.
Now China is a powerhouse they compete with America. They may be able to say no.
If the country you live in has rolled on FATCA ask yourself why you needed to invest in America. The answer might be that the country you live in is crap.
I really hope America pushed too hard on this one. I really hope that the holdout countries are strong enough to break it.
@Neill
You certainly sound like one- no matter how many times you introduce the word “bloody”.
America is certainly making sure that nobody will want to invest in America again. But in the meantime, with the dollar the leading currency in the world, nobody has a choice.
@Neill, @Polly
I just wanted to thank you both for your passion and inputs which I found very interesting in highlighting to me that there are really very very many other opportunities to invest other than USA, esp Neill;s statement “I really hope the holdout countries are strong enough to break it”
so do we all , Neill, so do we all hope!!
@Petros
I think you’ve put your finger on the big problem: Congress has a very stereotyped view of who is being affected and lots of people don’t fit. This has been going on for over a hundred years, but now there’s the internet, so we pick it up and can challenge it.
Having looked into this, the problem seems to be that U.S. persons abroad have long been portrayed as being selfish and self-indulgent in ways that go far beyond tax. I don’t think that the law-abiding worker abroad idea really challenges this (a certain type of American might wonder why that person isn’t working in the U.S. and paying taxes there). This may convince Heritage Foundation readers, but not the people who are the problem. Below the line comments that are most likely to challenge the stereotype are anything that mention personal service to family, community commitments, charity, volunteering, caring professions, and generally anything that clearly isn’t selfish.
@Publius
In Europe- we have government funded organisations to do the stuff that charities do in America. In America its more like “lets be good people and help our neighbour who is in trouble.” In Europe its more like the government takes care of it. Thats a huge difference. And when we then look at american “exceptionalism”- we have a lot of self-serving behaviour there.
But other than that, I don’t know exactly how homelanders view expats. I just know that CBT was meant as a punishment back in the mid 1800s. So punishment it remains.