A couple weeks ago, I sent this comment via email to my Conservative MP of Nepean-Carleton, Pierre Poilievre (thank you to Deckard1138 whose wording I borrowed from one of his Brock posts):
Only one week after ushering-in FATCA on Canada Day, Canada’s government is warning the Eritrean consulate to stop harassing Eritrean-Canadians or risk closure of its consulate. Foreign Affairs Minister John Baird made the announcement today in Ottawa.
Fair enough to say that this is certainly one of the most egregiously hypocritical moves the Conservative government has ever made – and there have been far too many to count over the years. I would love to hear Mr. Baird explain to Canadians how it is acceptable for the United States to impose its infinitely more invasive extraterritorial tax laws in Canada but Eritrea’s amateur-hour 2% shakedown warrants impending closure of its consulate? Could it be that Mr. Baird is in fact preparing a subsequent announcement that he will be ordering the immediate closure of the US Embassy as well? Should we give him the benefit of the doubt?
Today I received this ‘enlightened, and well argued’ (NOT) response back:
The United States collects taxes based on citizenship, rather than residency. This means that a US citizen living in another country must still file and pay taxes in the US for as long as they remain a US citizen.
There is no equivalency between this and the actions of Eritrea.
Sincerely,
Pierre Poilievre, P.C., M.P. Nepean-Carleton
Gastric juices pumping. Ask him if it’s more important for him as a lawmaker (and supposedly a defender of CANADIAN law), whose laws should he defend over the other – Canada’s or the US’s?
He just states what the equivalency is between USA and Eritrea. .. then states there is no equivalency between them. This laughable non-response should be published widely.
My BP is still through the roof, after having received that email this morning, and while trying to breathe deeply, I replied:
Dear Mr. Poilievre,
How can you write ‘there is no equivalency’ with a straight face?!?
USA and Eritrea are the ONLY TWO COUNTRIES in the world that tax based on citizenship.
The major difference being that Eritrea makes it harder to be a citizen (birth on Eritrean soil is not enough to qualify). If I had been born in Eritrea to Canadian parents, and left at age one, I would NOT BE CONSIDERED an Eritrean citizen, and thus not subject to citizenship based taxation in Eritrea. However, the one year I spent as an infant in USA (with my CANADIAN ONLY parents) makes me a US citizen for life, and thus a taxpayer. This is WRONG, and you know it.
The other difference being that Eritrea only has a simple 2% tax whereas USA has a complicated tax code that is impossible to marry with Canada’s tax code without spending a fortune on accounting fees, and becoming difficult to save and plan for retirement and one’s children’s education as things like TFSA’s and RESPs are taxable by USA and subject to expensive, complicated annual reporting with major PENALTIES for even minor foot-faults. Canadian mutual funds are ‘passive foreign income corporations’ and pointless for Canadians with a US birthplace to invest in, etc, etc.
Sure, we are not being physically threatened, but our life savings are being threatened, and many of us are scared to death and stressed out beyond belief.
Yet the Conservative government condemns Eritrea for coming after its citizens (who have MORE connection to Eritrea than people like I do to the USA), and is about to hand us over to the IRS for PENALTY PROCESSING. Most of us will owe no taxes, but the penalties for not filing a stack of annual paperwork will be bankrupting.
Citizenship based taxation is immoral, especially when USA gets to define ‘citizen’ and people like myself who have little connection to the USA, fall within that definition.
The Canadian government should be protecting Canadians with a US birthplace, and condemning USA for its attack on Canadians living and earning permanently on Canadian soil, just as it is condemning Eritrea for its threats directed towards Eritrean diaspora who are not paying their annual 2%.
PP’s response is silly, granted, but the real difference, for better or worse, is that Canada has a tax treaty with the US and not with Eritrea.
Having said that, the Eritrean overseas tax form is a model of simplicity: http://www.embassyeritrea.org/consular/PDF-docs/mehwey_gibri_2012.pdf
No FBAR, no 8938, no fuss, no muss, 2% flat tax. There are worse deals.
This is such an ignorant comment, that it would be laughable if the consequences of such stupidity weren’t so dire for the ones affected.
What is this MP going to say when the US begins to widen the definition of US Person which will include more and more people not just US citizens?
What is he going to say if the US drops the Reportable Account limit to zero?
What is he going to say if the US starts demanding transactional data (who you work for, where you shop, etc, etc?
What is he going to say if the US now says all Credit Unions must do FATCA reporting?
He mistakenly believes FATCA will remain static. Doesn’t this MP realise the US writes all the FATCA rules and can change them at will.
Someday he may find his own private data has been sent off to the US. He’s very much taking the attitude ‘I’m OK Jack, I’m not going to worry about dual citizens.’
Someone should ask him what input Canada has in making the FATCA rules. Getting a couple of very minor concessions is not influencing the rules when the US can just turn around and change them tomorrow.
If US just had Citizen-Based taxation, then foreign nationals residing in the US would not have to pay income tax. This is obviously not the case, so I think we should stop referring to CBT and call it Diaspora Tax.
I’m sure Poilievre’s youth (age 35) and lack of life experience prompts him to write without conscious due thought process. I would highly suggest that he process the information and formulate a conscientious “informed” reply rather than write off the cuff the same idiocy that he wrote in his initial letter.
Whitekat, that is a really good letter. Thanks.
That’s a very good point you raise, Jayne. I too like the term ‘diaspora tax’ for its emotional impact, but it’s not entirely correct either, as it’s not really a tax specifically applied to the American diaspora. The problem is that we are taxed the same as US residents, with no consideration as to where we live. Tax credits and FEIE’s do take the fact we live elsewhere into consideration, but they are inadequate.
I wish people wouldn’t call Eritrea’s simple 2% flat tax extorted to support their military as being Citizenship Based Taxation. It’s nowhere near as bad as the US’s CBT as WhiteKat explained in his follow-up letter.
If Eritrea’s tax was not called CBT, we could then say the US is the _only_ country on the planet that imposes CBT. Sounds better, doesn’t it?
If I had to pay a foreign tax, I’d rather pay Eritrea’s 2% tax than the burden and cost of the IRS tax regime. For most people, a 2% tax would be less than the accountant fees of filing to the IRS.
It seems we need to educate these elected people in our government about the ramifications of the US FATCA etc. etc. I doubt very much if they have delved into it as much as we have with all of our expert advise and research that has been shared at IBS. I’ve run into the same problem in speaking with young people about the invasion of privacy, the Canadian Government selling out it citizens and I get back “Yada Yada Yada no big deal it’s been going on for years”. It’s the arrogant, know it all attitude that is appalling to me, however on the rare occasion I do find an intelligent kid who is willing to listen and who just might be our hope for the future. I’m still on my bandwagon spouting off about the injustice of it all.
@ Bubblebustin
I would say one of the biggest problems is that ALL outlanders are too easily trapped in the IRS penalty box, much more so than homelanders. The homelanders have the choice of keeping their accounts in the homeland and can therefore skate away scot-free from any serious penalties. The outlanders must keep accounts in the country they are living in so that they can survive and they are actually prevented from keeping accounts in the USA. Why they would even want to have their money sitting far away in the USA is beyond me because it is too easy to confiscate but some would still like to have that choice at least. Anyway, this means that outlanders are not treated equivalent to homelanders when it comes to the US tax dys-system.
What a load of bull. This man has an IQ of no higher than 48.7
@ Eric
Well I’d be less generous than that. I’d say PC MP Poilievre has an IQ which equals his body temperature (in Celsius).
I think all they hear is the *US citizen* and not the *US person* which includes canadian only citizens. Its called selective understanding… they see or hear US… then it becomes… blah, blah, blah… they don’t hear or care about the rest… its passing the buck… if u are a US citizen… we can’t help u… Trudeau did the same thing… he heard US citizen… figured it didn’t concern his platform so its an american issue… not a canadian issue. Its like they can’t be bothered to understand it… hear what they want to hear & toss the issue back… I guess its true… if u vote party line… u don’t have to do your job & know what u are voting for… just follow the pack…
@EmBee
Don’t you mean you are being more generous than Eric? I am sure given his propensity for hot air the honourable member must have a body temperature much higher than 48.7c.
See http://youtu.be/nirI4NBnKeU?t=33m
We have no representation in Parliament because the MP’s represent the banks and their political parties.
Tax treaties with the U.S. are empty pieces of paper that the U.S. uses to plant its flag on foreign soil. The U.S. gets to call the shots which means that it reserves the prerogative to formulate definitions of words and phrases that are unique to itself.
C.B.T. is truly a word that means slavery. Every U.S. person bears the tattoo of his /her slave master. If you are a U.S. person abroad you have no economic rights no property rights, no rights to employment as you see ft, etc. Instead you can only live as your slave master allows. Even your marriage must be arranged with U.S. consent.
Should we still be surprised?
@Polly,
Good question – no, I am not surprised anymore, but the anger has not and will not dissipate until we win this fight in the Canadian courts, and kick the CONS out.
What about all those 100% Canadian only Canadians who have the misfortune of being married to a Canadian tainted with ‘US personhood’?
They can no longer have joint bank accounts with their spouses without having THEIR bank account details passed to the IRS from the CRA.
In my case, my 100% pure Canadian only spouse, contributed more than half of the money in our joint bank accounts. HIS Canadian earned, Canadian income, will have penalties assessed by the IRS simply because he is married to me, and we have joint accounts.
Seriously $hit is going to hit the fan, when the first penalty notices are sent from the IRS to Canadians living and earning ONLY in Canada. Most Canadians are still UNAWARE of FATCA and UNAWARE of USA’s unique to the world citizenship-based taxation laws. I am still meeting people, knowledgeable people, who were born in USA, who are just waking up to this.
Is it fair that the Conservative government has set up my PURE Canadian husband to have HIS life savings subject to IRS penalization? Because this is what it has done – by agreeing to send our joint bank account details (balances, etc) to the IRS, so that the IRS can assess penalties because I (the US person slave) have not been filing a two foot stack high of incomprehensible, expensively prepared papers annually to the IRS.
“There is no equivalency between this and the actions of Eritrea.”
Mr. Pierre, you are correct that there is no equivalency. The US is far worse than Eritrea.
I just called his office and asked his dum dum who answered if Poilievre was “seriously this stupid” to give an answer like this. DICTATORSHIP people. this is how Canada has become and the people have themselves to blame. God dam this country’s government and system and let it burn in hell!
@Ann, re: “It seems we need to educate these elected people in our government about the ramifications of the US FATCA etc, etc.”
I could not count all the emails I have sent Mr. Poilievre over the last year and half. I have tried really, really hard to educate him, but apparently to no avail. I could MAYBE cut him some slack if he was coming into this as a ‘newbie’ and unaware, but he has replied personally to several emails and continues to display complete disregard for the devastating impact that the IGA will have on Canadians resident in Canada that are tainted with ‘US personhood’ whether through birth, lineage, marriage, or green card status. There really is NO excuse for his lack of comprehension other than as Petros wrote in an earlier comment to this post, ‘we have no representation in Parliament because the MP’s represent the banks and their political parties’.
We should all be very afraid, and not just those of us with ‘US person’ status or having a ‘US person’ in the immediate family. It would not be hard for me to hide, as I don’t have much. I am more afraid for the future of all of us. What kind of country do we live in, that would do this to a subset of its own citizens? This makes me very angry, and very sad.