Can move this discussion further, after the little interesting budget thing in the Senate:
badger says
The FATCA-Mythspinning machine leaps into action:
http://thehill.com/blogs/congress-blog/economy-budget/237110-endorsing-tax-evasion
March 27, 2015, 03:00 pm
‘Endorsing tax evasion’
By Rebecca J. Wilkins
“..The U.S. loses an estimated $150 billion in tax revenue each year to tax haven abuse – a revenue shortfall that honest taxpayers have to make up. About $40-70 billion of that revenue loss is from individual tax evasion…”
.”To oppose FATCA is to oppose transparency and cooperation and take the United States out of its leadership role in combating tax evasion. The United States Congress is faced with a choice. It can stand for openness, transparency, and honesty – or for tax evasion, secret bank accounts, and subterfuge.
In the geeky tax world, we often refer to FATCA as FATCATS. It helps us remember the acronym. The FATCATS are the ones with those offshore bank accounts. Will members of Congress protect them? Or will they stand with American people?
Wilkins is the executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition.”
Same old bullshit numbers pulled out of someone’s, er, pocket. And this deliberate lie makes me sick; “The United States Congress is faced with a choice. It can stand for openness, transparency, and honesty – or for tax evasion, secret bank accounts, and subterfuge.”
Right, that’s why the US Treasury signed IGAs that they have no authority to enter into, and why US banks do not and will not be providing EQUIVALENT RECIPROCAL information to other countries on all accounts held in the US. And why the US hasn’t and won’t sign on to the OECD CRS. No mention of the dirty secret of US extraterritorial taxation based on who your parent was or the geographic location where your mother gave birth…..
Let us remember those US resident homelanders who I am sure want a more transparent system – as long as they have the inside track on jiggling the rules for their own benefit:
ex. Take the Pritzker family trusts:
“……President Barack Obama’s nomination today of Chicago businesswoman and Forbes 400 member Penny Pritzker to be the Secretary of Commerce, her family’s legendary use of hundreds of offshore trusts to protect its wealth from taxes and the prying eyes of the Internal Revenue Service…..”……
http://www.forbes.com/sites/janetnovack/2013/05/02/pritzker-family-baggage-tax-saving-offshore-trusts/
‘Pritzker Trust Dodges Illinois State Income Tax’
http://www.forbes.com/sites/peterjreilly/2014/01/02/pritzker-trust-dodges-illinois-state-income-tax/
Plenty more material where that came from.
Yet, local legal everyday accounts in Canada – held where we live, to hold post tax wages, pay bills, save for education, disability, retirement, etc. are to be reported to the FINANCIAL CRIMES ENFORCEMENT NETWORK, because the US treats the education savings of a child in Canada with a US born parent as so much more likely to be ‘offshore’ assets belonging to a tax evader than say, the US resident owners of the family trusts like those of the current Commerce Secretary.
No mincing words on this one, Victoria. Enjoyed your scathing comment immensely.
Is it a lack of consideration for the unintended consequences or just plain disregard for its taxpayers that the US rushes into its latest boondoggle? I can almost hear the words, “you’re with us or you’re with the tax-evaders”.
It seems to always come back to the same lack of accountability, doesn’t it?
I think I’m not alone in having been under the impression that the $8.9 billion figure was supposed to be tax revenues collected that wealthy expats cheaters had been reneging on. And yet a brief search shows Haydon to be correct. It isn’t about income taxes. The White House pre-FATCA briefing paper of May 2009 (https://www.whitehouse.gov/the_press_office/LEVELING-THE-PLAYING-FIELD-CURBING-TAX-HAVENS-AND-REMOVING-TAX-INCENTIVES-FOR-SHIFTING-JOBS-OVERSEAS/), which is the original source of the 8.7 billion figure (I think). An excerpt:
The point being that the IGAs negate at least one of the above.
This point really needs to be emphasized when rebutting articles like the recent one in The Hill.
@Barbara Yes, you absolutely right – the original number was USD 8.7 BN.
In a post-IGA world, the number 0 will be closer to the reality.
It gets yet *MORE* surreal. To pass Acts like the HIRE ACT (that cost money) the Acts have to contain methods for offsetting that cost.
To put this another way, for the Bill to be passed there had to be no financial burden on the US government.
Title V of the HIRE ACT aka ‘FATCA’ was ‘slipped in’ to cover the cost of the rest of the HIRE ACT.
The HIRE ACT passed on the slimmest of margins and all but a few understood that Title V would become “FATCA”.
This was not the first attempt to get FATCA into law, the first attempt failed.
We now see that the HIRE Act was not self-financing at all.
FATCA is today’s Wall Street Journal
https://www.evernote.com/l/AQ73mh3kbNxFQICtDV8yYHPxaoZC7uyOXzk
Guess what that USD 870 M a year over 10 years (USD 8.7 BN) is quoted again.
What a load of nonsense: virtually none of that USD 8.7BN will ever be raised. It was conceded with the IGAs and was only ever a ploy to get the HIRE ACT passed.
Sshh – don’t tell any one.
https://www.jct.gov/publications.html?func=startdown&id=3650
Joint Committee on Taxation, Congress of the United States
JCX-6-10 (March 04, 2010) Estimated Revenue Effects Of The Revenue Provisions Contained In An Amendment To The Senate Amendment To The House Amendment To The Senate Amendment To H.R. 2847, The “Hiring Incentives To Restore Employment Act” Scheduled For Consideration By The House Of Representatives On March 4, 2010
It is one single line of revenue shown in the report. There is no justification behind it
@Mark Twain – In all my years as an Accountant, I do not think I can recall such a spurious use of numbers.
The USD 8.7 BN is a complete falsehood – the very existence of the IGAs proves this.
The HIRE Act was predicated on a falsehood of self finance.
There you go, its just another FATCA fiction.
The entire lie is all about assuming something that isn’t in the homeland isn’t where it should be. It isn’t only suspicious, it is automatically an indication of criminal activity.
If criminals cannot be caught, then they are forced to sign a form stating where there money is. Any person not signing the form is therefore a criminal.
Any money which is not in the homeland is assumed to have arrived there without ever being taxed. The onus is upon the owner to prove not guilty of not reporting himself.
All penalty structures begin with an assumption that the government deserves at least 30% of the money because the assumption is that the person illegally hid the money from the IRS.
So, the insinuations of all that offshore money (offshore in Canada and MExico) all goes to justify taking away at least 30%.
The lie that they insinuate with the number is that by going after AMERICANS and ASSETS (not income and not tax) then they can penalize/tax it at rates greater than tax rates
Hence they say that finally they will be taxing income that skipped around the IRS the first time.
I have a question for you.
Being a Brit, I do not know the US political and legal system as well as I do the British system.
When I look at the link below:
https://www.govtrack.us/congress/votes/111-2009/h991
I perceive that the HIRE ACT was only just passed. Am I mistaken?
House vote
Yes: 217 Democrat 0 Republican
No: 37 Democrat 175 Republican
———-
Senate vote https://www.govtrack.us/congress/votes/111-2010/s55
Yes: 55 Democrat 11 Republican
No: 1 Democrat 28 Republican
————-
Signed by President Barack Obama (D)
So it (the HIRE Act) barely Passed right? Even then, it was brazenly promulgated as self financing when it is not.
From there, IGAs were negotiated based on reciprocity, that won’t happen, that bound other Countries to form a Common Reporting Standard, that the US can’t sign.
The data is then sent online to the US who, of course, are the very paragons data privacy.
HR2847 HIRE act was a make-work stimulus pack, where the majority was infrastructure projects which are contracted out, typically or always to Union contractors.
Democrats had control of both houses of Congress (House of REpresentatves and the Senate), who both passed it. THen the president signed it and it was law.
One of the few bills that Senator Obama (2004? to 2008) sponsored was the Stop Offshore Tax Abuse Act which was never enacted under that name. FATCA’s methodology was said t be dreamed up by Dick Harvey and it replaced Obamas concept (which was to blacklist countries, I believe)
The IGAs were signed by the Executive Branch (President’s branch) with foreign govts. Anything signed with a foreign government must have been originated by law and the IGAs weren’t.
Therefore, they were taken by foreign govts to be a “treaty”, which they aren’t, because all treaties must be ratified by the Senate in 2/3rds vote.
There is no bill proposal to implement FATCA reciprocity. Here is how a bill comes to law.
“Barely passed” isn’t descriptive for the time period 2010 to 2012, when both houses were majority D and the president was D. Many D favorite bills slid right through because they had control of it all.
Now R has both houses, but the president (D) has to sign what they pass, otherwise he vetoes it and they have to go back and get a 2/3rds majority to override the veto.
So Bradley Birkenfeld steals client data from a Swiss Bank.
This triggers FATCA’s to make its way into US law – in a manner somewhat similar to how sausages are made.
Bradley Birkenfeld gets 40 months incarceration and a USD 104M reward from the US administration.
The Swiss Bank gets fined USD 780M in 2009, another Swiss Bank USD 2.9BN in 2014 (both fines levied without FATCA).
FATCA’s influence makes its way like a plague across the world and goes on to make the lives of ordinary people a misery (and is about as much good as a chocolate fire guard when it comes to tracking true tax evaders).
And all the time the US already had the legislation it needed to tackle tax evasion (Chapter 3) but it would require investment (that genuinely would be self-financing).
Fiction becomes myth and myth becomes legend and then anyone who questions FATCA is perceived as as evil as someone who kills kittens for fun. Meanwhile the mainstream media argues the pros and cons when the pros and proven not to exist at all, in any way, shape or form.
Is this not literally to defend the indefensible?
FATCA costs the world $2 Trillion (no typo)
http://www.amcham.ch/members_interests/p_business_ch.asp?s=7&c=1#666
To say that FATCA is ‘disproportionate’ would be a disproportionate understatement.
FATCA is a taxing law made by a bunch of zeroes (11 of them chasing 9)
https://samuelclemmons.wordpress.com/2014/10/16/fatca-a-taxing-law-made-by-a-bunch-of-zeroes/
Ironically that articles overstates the income and understates the cost (considerably so in both cases).
It’s $137,000 implementation cost per FFI (according to the qty of AUS FFI’s in your database. And $6000-$9000 per US person to be located.
https://bancdelasteroideb612.wordpress.com/2014/09/28/q-in-the-fatca-regime-whats-an-american-worth-a-priceless/comment-page-1/
The revenue is 8.5- 8.9 billion over 10 yrs 9,000,000,000
The cost assumed 22 USD per capita for half the world and 40 USD per capita for the other half. 7 billion non-US-residents in the world.
Otherwise, take 500,000 FFI’s at 137,000 USD per FFI as is typical in Australia, yields 69 billion USD costs.
@mark twain. Those costs are too low IMO but hey, it’s all good.
Plus what about the cost of reaching out to customers who are not American.
Their is not much correlation with the total cost and how many American customers you have.
FATCA allowed the US to get in front of the CRS parade and claim on the basis of empty promises of reciprocity that the US would not need to sign onto CRS.
FATCA will not deter tax evasion but redirect it to countries that have not signed an IGA, CRS will redirect tax evasion to non-CRS countries principally the US
https://www.govtrack.us/congress/bills/111/hr3933
H.R. 3933 (111th): Foreign Account Tax Compliance Act of 2009
Introduced:
Oct 27, 2009
111th Congress, 2009–2010
Status:
Died in a previous Congress
This bill was introduced on October 27, 2009, in a previous session of Congress, but was not enacted.
I remember researching it and found out that it was injected in to the HIRE act 8 days prior to its passage.
Makes House of Cards look very realistic does it not?