Further to suggestion by “JC” that this be posted here at Isaac Brock:
Update (undated) from American Citizens Abroad (ACA) – Why FATCA is bad for America
There is a lot of information here. This is Americans Abroad argument why FATCA is Bad. May we at IBS comment on it with an eye to strengthening the arguments put forward, then we may send it back to Americans Abroad?
While there is lots of information at IBS there are no master documents summarising all points. Here is where Americans Abroad have a summary.
One area where it could be strengthened is mention of the tax treaties. Australia is mentioned and says that not much extra tax would be owed. Point of Information: the US wants to tax the Australian pension fund called Superannuation. Also, if you have a share/shares and get Australian dividends – there is an Australian tax break on dividends – you would likely have U.S. tax liability. Also, the US wants to tax on “passive income.” So the closer to retirement the more passive income you may have, the greater your retirement funds, the greater the U.S. double tax exposure.
Note: As has been discussed here before, ACA does not seem to represent those who wish to expatriate from the USA. It is more an organization that represents those who want to remain “Americans” and perhaps someday return to the US to live. They have well outlined much that is bad for America and may welcome additional input from some of us.
ACA is approaching this from the perspective of ‘selling’ to Congress, the Obama Administration and the Treasury why FATCA is bad and should be repealed or amended. The ACA’s focus is to get change from the USG from the perspective of Americans living abroad. They have tried many types of approaches, and frankly, the Treasury and Obama Administration generally have not been responsive (not surprising but also very disappointing). I would encourage IBS to provide info to ACA.
I received the following email from Democrats Abroad today:
Democrats Abroad is fully aware of the stress and anxiety that so many Americans living abroad are experiencing, and the anger that many feel, about FATCA, the Foreign Accounts Tax Compliance Act.
Those who have followed our work on FATCA will know that we have not been sitting on our hands. For those not familiar with Democrats Abroad’s Reform FATCA efforts, this is what we’ve been doing:
Democrats Abroad has been working since 2011 to examine the implications of FATCA for Americans abroad, and propose robust recommendations for fixing it.
Through our FBAR/FATCA Task Force, we’ve worked with the IRS, and the U.S. Treasury Department to address the financial reporting burden FATCA imposes on Americans living and working abroad.
Our Democrats Abroad “Door Knock” (lobbying) teams have talked with dozens of Senators and House representatives to outline our concerns and get their support for our Reform FATCA initiative.
DEMOCRATS ABROAD MEMBERS’ FATCA SURVEY
Thanks to all of you who completed the FATCA survey last month. We received thousands of responses detailing and quantifying the negative impacts of the law on the lives of Americans living abroad.
Results from the FATCA survey are currently being compiled and analysed to become part of our continued advocacy for FATCA reform. What is immediately clear from the survey responses, from emails received in the survey follow-up, and from social media traffic on this topic, is that FATCA is gravely troubling to many American living and working abroad.
MISINFORMATION ABOUT FATCA and DEMOCRATS ABROAD’s REFORM EFFORTS
Recently, some groups have been spreading misinformation about Democrats Abroad’s FATCA reform work in an attempt to raise money and votes for Republicans from overseas American voters.
The “noise” you may have been hearing about the Republican position to repeal FATCA is just that – noise.
Since the so-called “Repeal FATCA” effort was first announced by the Republicans in January 2014, not one bill to repeal FATCA has been proposed in the Republican-controlled House of Representatives!
To fight this misinformation, we urge you to read our FATCA FAQsthat are easily accessed on the Democrats Abroad website here.
Important points to remember:
Democrats Abroad has for decades supported Residency-Based Taxation. We, along with numerous non-partisan associations of Americans abroad, continue to support that position. Knowing that the US is unlikely to end Citizenship-Based Taxation any time soon, however, we continue to make strong arguments to reduce the burden of tax compliance laid on Americans living and working abroad in ways we believe are more likely to be successful.
We claim a modest part in the following:
The modifications to the Streamlined Filing Compliance Procedures announced in June by the IRS (It’s not ideal, but it is much better than the previous, highly punitive options for becoming tax compliant.)
The Treasury Department raising FATCA’s reporting thresholds for Americans abroad to four times the amount set for US-based taxpayers.
Arguing strongly and continuously that the FATCA and FBAR reporting processes be combined and simplified.
WHY REFORM instead of REPEAL?
FATCA was an initiative designed to find and prosecute US citizens hiding assessable earnings in off shore financial accounts to avoid paying their taxes. Democrats Abroad strongly supports this ambition because when “fatcats” cheat on taxes, all Americans lose.
FATCA, as we all know, has inadvertently impacted Americans living abroad in serious ways. Their bank accounts are being closed, their relationships with their non-American spouses are under strain, some Americans are being denied promotion or partnership in business because of FATCA reporting requirements and some are planning or contemplating renouncing their US citizenship. Common sense reforms to the law can address these problems.
To help our lobbying efforts, we have retained the services of a DC-based consultant with broad and deep experience with the IRS, Treasury and Congress to help us move effectively toward our goal of relieving at least some of the pain that FATCA is inflicting on us.
So, please read the FAQs on our website. We believe that a deeper understanding of our work to reform FATCA will invalidate the deceptive statements being made about Democrats Abroad’s advocacy to reform FATCA.
Finally, we strongly believe that a Democratic Congress will ultimately be best for the nation, for the world and for the American overseas community, wherever in the world you live. If you have not yet requested your absentee ballot for November’s mid-term election, go to http://www.votefromabroad.org now! It’s fast, easy and effective
Many thanks for your interest in this important issue and our work to reform FATCA.
Happy Labor Day!
Democrats Abroad FBAR/FATCA Task Force
Joe Green (Canada)
Stanley Grossman (UK)
Maureen Harwood (Canada)
Carmelan Polce (Singapore) – Chair
Joe Smallhoover (France)
This message is paid for by the Democratic Party Committee Abroad
PO Box 15130
Washington, DC 20003
Telephone: +1-202-621-2085 +1-202-621-2085
It is being sent to you because you are a member of one or more of these Democrats Abroad group(s): DA International and DA International.
I have moved back to the US and want to be moved to the DA US Alumni group.
I have moved back to the US and want to be removed from the DA membership list.
I have moved to another country or chapter area and want my membership to be transferred. Please send us your new address.
I want to be completely removed from membership in ALL groups in Democrats Abroad.
I want to receive only Voter Information emails .
E-mail links to FATCA FAQs:
Sorry if the cut and paste is long. My take– Democrats Abroad is late to the game and realizes they’re losing support/voters. I took their survey– I told them I was giving up my USC as a result of FATCA/CBT.
Happy Labour Day Weekend to all!
Administrators: feel free to cut, paste, and use these two posts to your heart’s content!
@Calgary411 Thanks for posting. And yes, a good note you make: Note: As has been discussed here before, ACA does not seem to represent those who wish to expatriate from the USA. It is more an organization that represents those who want to remain “Americans” and perhaps someday return to the US to live. They have well outlined much that is bad for America and may welcome additional input from some of us.
So the ACA “Bad” essay will not be through the lens of those not wanting anything to do with the U.S.
However, ACA seem to be quite focused on change from CBT to RBT.
@BC_Doc The Democrat letter points to that: Since the so-called “Repeal FATCA” effort was first announced by the Republicans in January 2014, not one bill to repeal FATCA has been proposed in the Republican-controlled House of Representatives! Yet, we don’t see any Democrats trying to introduce this either and trying to enlist the Republicans on it. At least the Republicans have in their platform the repeal of FATCA and change of CBT to RBT. And the Democrats, who we know voted FATCA in without consideration of consequences?
The ACA represent the pre-FATCA world. An email was sent to them about adding a prominent webpage on their site regarding renunciations.
Here’s the response:
Thank you for contacting ACA. ACA is an advocacy organization that works on the issues affecting Americans living and working overseas. ACA seeks to empower Americans citizens and have the US government recognize them as important assets while living and working overseas. As an organisation that advocates for empowerment of our citizens, we therefore do not deal with US citizenship renunciation nor advise on the procedure.
Ex-pats are ‘important assets?’ If something or someone was valuable would you treat it like the US Government treats ex-pats and the greater Homelander public at large?
I have nothing against the ACA, but they need to adapt to the post-FATCA world.
@ACA likes to talk about Americans abroad as ambassadors of the U.S., those formerly Americans may be ambassadors as well as long as they feel America has treated them well. Or, they could be really upset with America and have “an axe to grind” and become anti-ambassadors. None the less Americans living abroad for short term or long who may wish to return to the U.S. are influenced by the negative and bad impacts of US government policy on US expat communities.
“As an organisation that advocates for empowerment of our citizens, we therefore do not deal with US citizenship renunciation nor advise on the procedure.”……
And I guess that means that they won’t comment on the unethical jacking up of the price of renouncing from 450. to 2350. practically overnight. And the resulting human rights violation in effectively preventing some people from being able to exercise their universal right to choose their citizenship – even if that means choosing NOT to be a UScitizen anymore. And choosing not to have their children’s education savings, their dependents disability benefits and savings, their family home, and all the rest of their legal, local assets sucked into the greedy aggressive maw of the US.
Because that would put them at odds with the powers that be.
That is the most comprehensive article I have seen.
ACA does a fantastic job and a fantastic job on that one.
ACA successfully limits and defines its scope. It is focused upon laison with the US govt only and only upon US issues. I think they look at renunciation as a horrible consequence of horrible laws.
But their scope statement is direct and to the point. They’ve specifically chosen the area they are working in.
What it tells you is that another group is needed for such issues. You can’t force a group to do something it doesn’t want to do according to its mission. Unfortunately human rights issues are about what happens to a minority and minorities never have a legislative voice—by definition. It’s inhumane.
Well, ACA wouldn’t be the first diaspora organisation (though perhaps the first American diaspora organisation) to define itself into irrelevance. These “first generation” groups see their primary purpose as helping members maintain their political collection to the Homeland and its government, and projecting an image of diaspora loyalty so as to get goodies from that government. They don’t know how to adjust to the “second generation” mission of helping members thrive in the country they’ve chosen as their actual home whatever that might mean for their legal relationship to a country they don’t live in.
For those of you who enjoy obscure historical analogies: ACA is Mindan (a pro-South Korean association for Koreans in Japan) in 1973. They’re talented and sincere people who through no fault of their own are caught up in major political events beyond their control which demonstrate the Homeland’s suspicion towards the diaspora & willingness to reach out extraterritorially and punish them unjustly. And they don’t have the slightest clue know how to deal with it except by adopting the failing “double down” strategy of exhorting people to remain loyal to the Homeland government and promising that through their insider efforts the injustices will eventually be righted.
In Mindan’s case, it was the 1972 espionage trial of two Korean brothers from Japan who went to university in Seoul, and then the kidnapping of Kim Dae-jung from a Tokyo hotel the next year. From 1970 to 1975 there was a 40% jump in the annual number of South Koreans naturalising in Japan. And here we have the American diaspora four decades later; history doesn’t repeat itself but it sure does rhyme.
Why is FATCA bad for America? It is Unconstitutional on three levels and I hope that Jim Bopp will get moving on his filing to the U.S. Supreme Court. The article clearly sates “The Treasury Department created Intergovernmental Agreements (IGA’s)”. The IGA’s are TREATIES!! The Senate needs to approve them. They did not. End of story. The USA needs to wake up and see they are being run by “Executive Orders” and Agency Administrative Laws.
I agree much of the good material from the Isaac Brock Society should be sent to all of our American Friends who also have issues with the Imperial activities of the former United States Republic.
Well- at least they got the following right: homelanders will do nothing to help expats. They will only vote for change if it helps themselves. So pointing out the detrimental aspects of FATCA for America is the only way to go in my view too. We can complain all we want – they DONT CARE. They justify their actions- their downright cruelty- with excuses like “FATCATS” who actually deserve this treatment. Then, if they make any concessions towards taxpayers with the help of Nina Olsen – they pretend it is to be more just. A country which is drowning in debt can’t afford the luxury of sympathy for expats.
But seeing that they do have an office and do lobby- what I would like to know is what are they hearing there? Because they seem resigned to the fact that CBT won’t be changed. I`d like to know why they are so sure of it? In my view- nothing will really change for expats if CBT isn’t changed to RBT. Hiding out isn’t a real solution, in my view.
Democrats Abroad is in serious trouble because the people that they support (Obama, et al) have all thrown them under the bus.
“All that is necessary for the triumph of evil is that good men do nothing.” ~ Edmund Burke
DA and DNC have done NOTHING about the the evil of CBT. In fact, they have actively supported the enforcement of CBT by creating FATCA and perverting the purpose of FBAR which was originally designed for anti-money laundering and terrorism purposes.
RO and RNC are actively working to bring an end to CBT, FATCA and FBAR. Go Solomon Yue, Go Rand Paul! and Go Jim Bopp!
ACA is trying, but frankly, they are far too polite with the powers that be and far too close with the CBT/FATCA compliance complex.
ACA has fabulous research. What’s important to recognize is that doesn’t matter if CBT and FATCA hurt America. The issue is whether they hurt individual members of Congress.
The sad truth is that most Congressmen/women are more than happy to promote policy that hurts America if to so do helps the special interests that elect them.
ACA will be seen to have made a big mistake by ignoring the renunciation issue.
That said, one must admire their hard work.
Thanks for the update from the Stepford Wives:
The are so stupid that they actually think this is a partisan issue. They always have and always be useless because Democrats Abroad – The Stepford Wives – are Barack Obama’s (the Hopey, Changey Guy’s) official representatives abroad.
I wonder who actually wrote this update.
Americans abroad are suffering, being subjected to Obama Tax Terrorism, their finances are suffering and what do the Stepford Wives do?
Attack the Republicans of course.
@BC_Doc Tweet from Solomon Yue: Could be to you:
Solomon Yue @SolomonYue 1h
@MiaChupacabra Sen. Rand Paul sponsored repeal FATCA bill was killed in Democrat controlled Senate. Will u join 2 call on Dems to support it?
Contrary to the assumption made in the Isaac Brock title, ACA’s page shows an update date at the bottom: “Aug.29, 2014”.
Somebody told me today that the democrats cannot vote for tax reform because every tax reform goes hand in hand with an initial lower revenue. Business can pick up later, but initially tax revenue is less. And the dems can`t do this just before an election because that will mean a lose for their party. So if any tax reform were to take place, it has to happen after the new president is sworn in.
As an aside – there is a clip of Jon Stewart interviewing Warren- senator of Mass. Even she says tax reform is necessary but the problem are the deals the lobbyists have already made.
I recall that I stated on Facebook to those who were touting Obama back in 2007 and 2008 prior to the election that Obama would be bad for the rest of the world if they elected him in Nov. 2008. Yet Americans went headlong into electing Obama despite the Economist’s dire warning of February 2008.
Makes me wonder. Yet somehow I doubt that the US would have been any better with McCain in power. With McCain we would probably be sucking radiation and living in holes in the ground over the Ukraine incident because there would be no question that he would have gone to war. There was no decent candidate in the mix except for the exception of Ross Perot (and unfortunately he chose not to run).
Those who voted for Obama in 2008 laid the ground-works for the bed we lie in today. And I am enraged that it has come to that. The warnings were there in 2008, but those who voted were blinded by the promises to care.
ACA needs to update its website which says, “All Americans should have the right to transmit US citizenship to their children.”
Who in the right mind would want to do something like that in this environment?