#FATCA in 9 minutes http://t.co/GcdyLi16Va
— Patricia Moon (@nobledreamer16) November 5, 2014
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#FATCA in 9 minutes http://t.co/GcdyLi16Va
— Patricia Moon (@nobledreamer16) November 5, 2014
Please notice there is a donate button on the top right hand side once the pointer contacts the “play” button.
Please share and Tweet widely!
@Anne Frank I admire the thought you have given to this. I would like to see this discussed by the larger Isaac Brock community. Personally, I have trouble with anything that does not poison FATA root and branch, but I take your point about practicality.
@Petros – Please can you (or another top Brocker) post @Anne Frank’s suggestion as a thread so that it can be adequately discussed?
@ star
It’s here:
http://isaacbrocksociety.ca/2014/11/06/opportunity-for-fatca-andcbt-relief-with-the-senate-and-house-in-control-of-the-republicans/
This whole discussion about the statement that the US will, over time (whether by accident or design,) claim everyone on the planet an American and then grant exceptions only to American residents in the US “(is crazy, over the top,” etc.), is missing one important aspect.
Actually it has already started.
Consider the definitions of “U.S. Citizen” provided by the IRS and by the State Department.
First the IRS:
A U.S. citizen is:
An individual born in the United States.
An individual whose parent is a U.S. citizen.*
A former alien who has been naturalized as a U.S. citizen
An individual born in Puerto Rico.
An individual born in Guam.
An individual born in the U.S. Virgin Islands
Second the State Department:
“U.S. citizens” are one of the following:
a. Individuals born in the United States or its territories (Guam, Puerto Rico, and the U.S. Virgin Islands; also residents of the Northern Mariana Islands who elected to become U.S. citizens).
b. American Indians born outside the U.S. without regard to immigration status or date of entry if:
i. They were born in Canada and are fifty percent American Indian blood (but need not belong to a federally recognized tribe); or
ii. They are members of a federally recognized Indian tribe or Alaskan Native village or corporation.
c. Individuals who have become naturalized U.S. citizens.
d. Individuals born abroad to at least one U.S. citizen parent depending on conditions at the time of their birth, per title 8, subchapter III, section 1401 of the United States Code.
e. Individuals who turn eighteen years of age on or after February 27, 2001, automatically become U.S. citizens if the following conditions are met while the individual is under age eighteen per INA 320.
i. The individual is granted lawful permanent resident (LPR) status;
ii. At least one of the individual’s parents is a U.S. citizen by birth or naturalization; and
iii. The individual:
A. Resides in the U.S. in the legal and physical custody of the citizen parent; or
B. Was adopted according to the requirements of INA 101 and resides in the U.S. in the legal and physical custody of the citizen parent.
f. Individuals who turned eighteen before February 27, 2001, would have automatically become a citizen if, while the individual was still under eighteen, he or she became a lawful permanent resident and both his or her parents naturalized. Such individuals also may have derived citizenship when only one parent naturalized, if the other parent was dead or a U.S. citizen by birth, or the individual’s parents were separated and the naturalized parent had custody.
*****
What you will see is that both of the definitions are sufficiently broad to include any person born in the U.S. Neither definition contemplates the reality that people born in the U.S. can, and have, and will continue to cease to be U.S. citizens when they have relinquished/renounced.
How many people entered OVDP/OVDI because lawyers and accountants told them that they were U.S. citizens just because they were born in the U.S.?
There is no doubt that the U.S. government has already begun to define people as U.S. citizens who are NOT. Furthermore, the Expatriation rules continue to define people as U.S. citizens even when they have ceased to be U.S. citizens.
As the saying goes: The trend is your friend!
When the US loses sole reserve currency status to the BRICs (remember world central banks are holding about 60% in USD today, however, in 5 to 10 years it’s likely this will be down to 50%). The US’ customers to flog off Treasuries to going to shrink. Then it becomes a downward spiral.
The US military is the only real insurance for the US dollar. At what point and when does this ‘insurance premium’ for the USG become too much? Or indeed is this insurance as effective in future as today?
I predict the US will cut the 180 days residency requirements to expand the pool of taxpayers. Increasingly make it easier to become a US Taxpayer by for example tell the banks to consider an account US Reportable if they access the account’s too often from a US IP address.
Better tracking of people entering and exiting the US, push more foreign governments to sign Mutual Collection Agreements (MCARs), make it easier to free overseas assests, put liens on overseas properties, and withhold money out of people’s paychecks.
If the rules of the road with FATCA are not established today, that’s the future we all face until the BRICs create an alternative reserve currency.
The BRICS will use FATCA against the US to establish the alternative reserve currency, but once that’s done, they too may set up a FATCA regime themselves in future.
Anyone burying there head in the sand or thinking it doesn’t affect them because ‘I’m not American’ could wake up someday with a nasty dose of reality from the US.
@Tricia,
You’re mad. I won’t argue that the US being able to set the rules is bad. I won’t argue that they might or will expand the pool of US persons. That’s bad as well. I won’t argue that congress are arrogant gits who think they are better than everybody else in the world. I won’t argue that they are quite happy to screw over the entire world just to make a couple of shillings. I won’t argue that the will put their hands into the resources of the disadvantaged and scoop out 30+% if they can.
Saying that they will tax everybody in the world and then grant exceptions to US residents is completely ‘hat stand’.
@EmBee Thank you.
@Neill – re @ Tricia – We shall see in the fullness of time … at the right juncture … when the pigeons come home to roost. People would have said that FATCA was “completely hat stand” less than 10 years ago. The ONLY thing that can stop this trend is for PEOPLE to stand up and instruct their Governments “NO” in a loud voice … violence is not an appropriate course of action.
@Neill, calling debate opponent angry is really a form of ad hominem argument, to try to discredit your opponent as emotional and hence irrational.
I can only suppose that you didn’t see Tricia Moon’s appearance on CTV.
You didn’t respond to me. I am nutter too. This is what I said,
I think that the great collapse of the USA is coming, which I think will be similar to the Weimar Republic–forit is very dangerous when a militaristic power finds itself in that kind of instability. It makes it ripe for riots in the street and for a dangerous demagogue to come to power. Already, the country is rife with demagoguery. If it were otherwise, the mainstream media would be able to tell the truth about Americans who renounce their citizenship. But I learn over and over from the media that I relinquished my US citizenship because I am wealthy, greedy, selfish and unpatriotic. For example, this Dean of (yellow) Journalism wrote: Greed reason many renounce citizenship.
@Petros,
>@Neill, calling debate opponent angry is really a form of ad hominem argument
Mmm. You didn’t understand what I meant:
>You’re mad.
I am saying I think the argument is akin to the tin foil hat type conspiracies. The ‘mad’ here is ‘crazy’ not angry. This is a typical response in the UK at least (and I am pretty sure it works in the US) when confronted by an argument you think is far fetched. It conveys to the person you’re talking to that you think the argument is way out there.
>I can only suppose that you didn’t see Tricia Moon’s appearance on CTV:
There is a comment in there from me. Two down from you:
>You look like a professional. I would have been screaming. Very nice.
I am only making the claim that these latest ‘America will tax the world’ claims as over the top. Nothing before.
Whether you were calling Tricia insane or angry, it’s still ad hominem.
The problem is that you cannot adequately even write satire that exceeds the reality of USA today (believe me I’ve tried). Through my study of one of the maddest dictators of all time, Nero, I found that the normal manner of accomplishing his goals was “edict” (διάταγμα)–another term for an “executive order”. This is where rule of law is trashed and the word of a tyrant becomes law. This is a good description of the Obama presidency. In this manner, the executive can confiscate the money of anyone in the world, not just US citizens, but anyone that Obama wants to take it from. We are not mad. We are just describing what is currently going on in the world.
The problem is much, much larger than the U.S. defining who is a U.S. citizen. It is that for tax purposes, the US has already come up with a lot of indicia to encompass people with a connection to them, deeming them a “US person” AND forcing F.I.s (Financial Institutions) abroad to spend $$$ to track them all. This is, in effect, making the whole global financial system reporting on US persons to show the US they are compliant. Isn’t this a financial tribute the world is paying to the US?
And now that “US persons” already include people married to, birthed by, green carded by, and once resident in the US and applies to some people who merely winter in and use an A.T.M. in the U.S.A. — what will the US think up next?
Did you know in some countries, the tax treaty doesn’t even allow people to escape the IRS EVER! From the latest letter from Phil Hodgen’s “Expatriation Only” email list sent every Tuesday (which you all can sign up for too) comes the following (from this point on, it’s all from Phil’s letter):
You, as an expatriate, might think that when you give up U.S. citizenship you will be a full nonresident noncitizen of the United States. (True). And if you live in a country that has a treaty with the USA, you will be entitled to the full benefits of that treaty. (False, depending on where you live).
It all depends on the treaty. You, dear former citizen of the United States, who carefully complied with all of the tax requirements imposed on you as an expatriate, who cleaned up your tax returns before expatriation and carefully filed that final year tax return with Form 8854, might be screwed. Let’s take a look.
Why Treaties are Nice
When someone can be taxed as a resident of two countries, it is usually possible to invoke the rules of an income tax treaty between the United States and that country to cause the person to be taxed as a resident of one country but not both. This is almost always found in Article 4 of the relevant treaty.
This only works for green card holders, because income tax treaties invariably have a second provision in them that says “Haha, just kidding. The United States can tax its citizens and this treaty can’t be used to change that.” This is called the “saving clause” of the treaty.
Or maybe you are receiving dividends from a U.S. corporation. Income tax treaties invariably [I don’t know for a fact that all treaties have rules reducing U.S. taxation of dividends, but let’s pretend for a moment, shall we?] reduce the normal U.S. tax rate on dividends paid to nonresident shareholders in U.S. corporations. You want that—you’d rather pay less tax to the United States than more tax.
Bad Savings Clause: Switzerland
The United States, being the United States, wants to tax its citizens. Just because. So the United States, being the United States, wangles a provision into every income tax treaty that is called the “saving clause”.
Just as an example, so you can see what a “saving clause” looks like, here is Article 1, Paragraph 2 of the USA/Switzerland income tax treaty:
“Notwithstanding any provision of this Convention except paragraph 3 of this Article, the United States may tax a person who is treated as a resident under its taxation laws (except where such person is determined to be a resident of Switzerland under the provisions of paragraphs 3 or 4 of Article 4 (Resident)) and its citizens (including its former citizens) as if this Convention had not come into effect.”
Residents of the USA are taxed no matter what the treaty says, unless Article 4 (our favorite treaty provision) says otherwise. But U.S. citizens? Article 4 won’t help them. Article 4 says that “the United States may tax . . . its citizens (including former citizens) as if this Convention had not come into effect.”
And . . . look at that submarine lurking there—the USA/Switzerland income tax treaty won’t protect former citizens of the United States. They can’t use the tax treaty! There are some exceptions to this rule in Article 1, paragraph 3. But basically, former citizens of the United States who happen to live in Switzerland or be Swiss citizens—they’re screwed. They can only rely on the Internal Revenue Code to determine their tax position in the United States. If the treaty rules are better than the Internal Revenue Code rules, too bad. They are stuck with the Internal Revenue Code rules.
The Technical Explanation of the treaty says this about that. (That’s a oblique Nixonian reference. He famously said “Let me say this about that”. Or at least that little phrase has stuck in my head for decades, attached to the sound of his voice.)
Under paragraph 2, the United States reserves its right to tax former U.S. citizens. Such a former citizen is taxable in accordance with the provisions of section 877 of the Code if his loss of citizenship had as one of its principal purposes the avoidance of tax. The United States generally treats an individual as having a principal purpose to avoid tax if
(a) the average annual net income tax of such individual for the period of 5 taxable years ending before the date of the loss of status is greater than $100,000, or
(b) the net worth of such individual as of such date is $500,000 or more.
Although paragraph 2 does not specify a time frame in which this provision may be applied, under the Code rule, the United States retains its right to tax these former citizens for 10 years following the loss of citizenship.
The Australian income tax treaty with the United States has a similar provision, referencing the U.S. right to tax its former citizens. I haven’t looked at other treaties but I’ll bet you can find similar provisions elsewhere—the United States reserves the right to tax former citizens.
Peter,
The discussion on this post clearly shows that some commenters are offended by statements they perceive as being “over the top” or exaggerated, even if such statements (exaggerated or not) are used just to make a point.
So that this does not happen in future, could you please go to the Brock “Administrative Notice” section on this site and revise it to say something like: “No statements on posts, threads, comments, videos etc. that might possibly be perceived by some as being “exaggerated” or “over the top” (and therefore be offensive to these people) will be tolerated.”
I also suggest that you cite some wildly over the top examples used by Jonathan Swift (you know the outrageous ones) so that readers will easily understand what will not be allowed on Brock.
Thanks
@Jan
I also receive Phil’s weekly email. When I first read it I could feel (slight) waves if that horrid panic pass over me (again). I think it might be more than enough to equal the original OMG moment.
The current (ab)use of the US-Canada Treaty as a justification for the IGA is anything but reassuring. The other night I watched (again) the FINA debates of the amendments to Bill C-31 (the enabling legislation for the CDN IGA). It was abundantly clear that the Conservative members (who voted down every amendment offered by the other parties) simply did not understand they gave away Canada’s right to determine the fate if its own citizens in its own country. I will add a link to one of the mist powerful statements (given by Nathan Cullen) when I get to my computer.
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Me too, Trish and Jan. I tried to push it out of my thinking but know that is folly.
Stephen, I’ve noticed that there have been many attempts to portray Isaac Brock as mad hatter, nut-job whacko or fringe marginal over-the-top–or how did that one lady at the bank conference put it? “inflammatory”? These are just an attempt to deflect attention from the reality of what the USA is doing in the world and to control the narrative. I wrote the “About” page for the Isaac Brock Society three years ago, and unfortunately, it has not become less true in the meantime:
Right on, Petros.
@Stephen Kish, Petros,
I am not offended by the video. I just didn’t like it. I could have towed the party line and said it was great. I didn’t because I didn’t like it. I didn’t like it because I felt that it made some statements that were way over the top. In fact so way over the top that it made me want to distance myself from anyone making such a statement. I didn’t get from the video that this was some hypothetical situation constructed to make a point as has been suggested here. In fact you guys are doubling down on the statement and saying it’s reasonable now.
Think what your saying. You are saying America wants to tax everyone on the planet! The map of America is almost completely red at every level now. They don’t even want to tax Americans to the extent they are now.
I almost hate to say this, but I am torn between what Neil is saying and what Petros, John and Trish are saying. There is merit in both their viewpoints, methinks. I guess what I am saying is that we do not do ourselves any favours by focusing on future ‘what-ifs’/doomsday scenarios(even if they are not necessarily that much of a stretch), because truth is AVERAGE people (the one’s whose support we need) WILL see us as mad-hatters.
@Neil
“They don’t even want to tax Americans to the extent they are now.”
Well then they better find someone else to tax.
The end justifies the means; there is no victory in being able to say, ‘I told you so’. I am reminded of the people we have all seen standing on street corners, handing out ‘the world is about to end’ pamphlets. Who knows, maybe some of them are on to something.
Ok, so the video exaggerated a bit to make a point. Personally, I think there are some in the US government who think the notion of taxing everyone in the world is justifiable. Why? Because they think the US is exceptional and the rules that apply to everyone else don’t apply to the US.
They believe the US is the defender of freedom and is providing protection to the rest of the free world at great expense to the US. In their minds other countries are slackers who don’t pull their own weight. (Imagine what US defense wonks are saying in private about Canada’s puny military and measly half dozen jets we sent off to bomb ISIS!) These people believe the rest of the world owes the US. They would happily tax everyone if they could only devise a system to do so. FATCA is one step in that direction.
@Neill. Sure the Republicans want to reduce American taxes; it’s good for their re-election prospects. But if they figured out a way to tax everyone else I have no doubt they would think it would be just dandy. Call me a cynic, but I believe the Republican opposition to FATCA has way more to do with the fact the Dems are for it than any sense of the basic injustice of it all. And really, the “success” of FATCA to date stems from the very real threat of taxing everyone else–the 30% “withholding”. (Well, maybe not every individual but certainly every foreign financial institution.)
Finally, the US already taxes everyone else by virtue of the US dollar being the world reserve currency. They are the world’s largest consumer and they pay for those goods and services mostly with paper which will eventually inflate to near oblivion.
The world has never come to an end, and neither myself or John have been suggesting such.
However, many dictators and despotic empires have existed in history. Sometimes they start out as half-decent democracies like the Greeks or the Romans. Then they turn to despotism and demagoguery. If we see the USA federal government turning to tyranny and stealing money from whomever it pleases, then it requires a kind of inability to accept what is right in front of our eyes. Neill has provided no arguments to this point. I have brought up a number of points to show that John’s statements are far from over the top. What is over the top is the manner in which the current administration rules via edict and steals from whomever it pleases. Suggesting that one day they will declare everyone in the world a US person for tax purposes, is hardly anymore incredible than what the US government is currently getting away with out in the open.
Back to FATCA in Canada, the IRS itself recognizes the potential for the wrong kinds of people being swept up in the FATCA withholding, enough to make it an IRS budget issue. At least that’s what this statement from the NTA says to me:
“Olson expects that implementation of FATCA, which affects taxpayers with accounts overseas, will also cause trouble this filing season. A new withholding requirement will mean there will be an issue with taxpayers trying to get refunds back in a timely manner. “If they are overseas, who are they going to call? There is not toll free number,” Olson said.”
http://www.forbes.com/sites/ashleaebeling/2014/11/04/irs-commissioner-predicts-miserable-2015-tax-filing-season/
@Petros, re: “The world has never come to an end, and neither myself or John have been suggesting such”, I wasn’t suggesting you had (although it WILL eventually end, maybe sooner than we think).
My point was that, in my experience so far, regarding FATCA, many people I have encountered (even some who are directly affected) do not think anything bad will happen. In my opinion, most people live in the now, without thinking too far down the road, and rarely to a future point past their own existence. So, to focus on a scenario that is even further removed from the present (USA making almost everyone a US person), is in my opinion, less likely to garner support for the anti-FATCA/CBT fight than focusing on what is happening right now. I do not disagree, with your theories, just saying that few people care because they don’t think that hard, and we need people to care about NOW, so that we can kill the beast NOW, before the scenario you present has a chance to actually play itself out in the real world.