Shadow Raider makes some thoughtful and thought-provoking comments on my post and the ensuing conversation:
I’d like to make some constructive criticism for all sides:
1. Many commenters on this website seem to assume that US residents are patriotic “homelanders” who support CBT. I live in the US and I can tell you that this is not true. The vast majority of Americans don’t even know that CBT exists. When I inform them, I get various responses: some say that the US should not tax foreign income or demand information on foreign assets because it’s none of their business; many sympathize with the problems of Americans abroad (complex paperwork, fear of penalties, financial restrictions); some try to justify CBT with consular services or the right of return, but when I reply that these things are not funded by taxes (or don’t actually cost anything, in the case of the right of return), they concede; only a few invoke patriotism, but as a joke.
2. Many here also seem to believe that “homelanders” see Americans abroad as “tax cheats”. I don’t know where you got this idea. I’ve only seen this as a brief mention by a US politician from the 19th century, and I don’t think anyone else believes that. I’ve certainly never heard anyone say that here. US residents correctly assume that people move abroad for various reasons. Many of them have family or friends who lived or are living abroad.
3. Condemning US patriotism while praising Canada is inconsistent and alienates those who are not from Canada. CBT applies equally to all countries outside the US, and the Canadian government has done the same as the rest of the world regarding FATCA, it’s not a special case. I’ve also seen some commenters focus too much on issues in specific countries such as the various 4-letter Canadian accounts or Australian superannuation. People outside these countries have absolutely no idea what these things are. The problem is CBT in principle, not the details of how it affects specific investments.
4. Some people, like Republicans Overseas, are focusing way too much on FATCA. Blocking or repealing FATCA is very unlikely, and even in that case it would not solve the myriad other problems caused by CBT.
5. Expatriate lobbying groups seem to be ridiculously afraid that the US government will not pay attention to their demands if it looks like they don’t love the US. Seriously? Michael Kirsch cleverly pointed out the inconsistency of identifying yourself as part of US society while requesting to be taxed as someone from outside that society. It would make much more sense if they just stated the truth: they are actually more attached to the countries where they live, but want to keep US citizenship simply for the peace of mind that they could return to the US one day. Maybe the CBT debate should be centered on whether the right of return constitutes membership in the society or merely the eligibility for membership.
By far the dumbest question Homelanders keep asking –
Do you lose you US citizenship by living outside the country? No we’re forced to keep it unless you pay the US Government $2350 plus all the IRS compliance forms.
After the shock that someone might actually renounce US citizenship, the surprise of the $2350 also shocks.
Re: “Condemning US patriotism while praising Canada is inconsistent and alienates those who are not from Canada. ”
Who is praising Canada?
I don’t have much time to post but there are differences between Canada and the rest of the world. There is currently outstanding litigation against FATCA in Canada. Not so in other countries. Also the Canadian government unlike many EU governments fully admits FATCA is a cram down and does nothing to help Canada.
I am not from Canada, but I am all for praising it where appropriate.
C-51 will not get praise from me.
Neither did signing the FATCA IGA. However, when either their brains, or their signature, will be on the contract, I can appreciate the bind they were in.
Canada is the unique position of sharing one of the world’s longest borders with the US. Also we’re united by common language, culture and lots of informal cross-border migration in both directions.
Some of my in-laws are Quebeckers who casually immigrated to the US decades ago. I know MANY Canadians with US roots: family, friends and business associates. Many US residents I know consider Canada a US protectorate. Considering the vast gap between US and Canadian military capacity, they may be right. Many Canadian companies have the US as their prime export market; the US is our largest trading partner and Canada’s largest market, not just for goods but for business expansion and acquisitions as well.
I know young Canadians who yearn for a US greencard or similar entry into the vast US entertainment, film and high-tech industries. For many young Canadians, the US is the Golden Mountain.
Mexico is in a very different situation with the US. It is the source of many of the 12 million undocumented immigrants now living illegally in the US – which is a political hot button issue far beyond anything in Canada/US relations.
Also, there an ultra-violent drug war running along the Mexican/US border. Mexico has gone to war with the US in the past (with more casualties and territorial consequence than the War of 1812). Germany’s covert attempt to entice Mexico to attack the US in 1917 was a significant provocation for the US entering the Great War. (Barbara Tuchman’s book “The Zimmermann Telegram” is a fascinating account of that incident.)
One of the biggest threats the US poses to Canada is the illegal traffic of handguns and similar firearms into Canada. There is an epidemic of guns in America – and almost anyone can get a firearm in US with little difficulty and the land border is porous for firearm smugglers. The US is prime enabler of gun violence in Canada, because its almost always the source of illegal guns used in Canadian crimes.
The problem isn’t just citizenship-based taxation (CBT) but also foreign bank account reporting (FBAR) requirements and the penalties there can be worse.
Probably if there was no CBT there would be no FBAR reporting either but as it stands now it’s about every financial move you make (if it involves a dime). Actually any mistake in reporting gets you a 10,000 dollar penalty or even worse. Mutual funds are a disaster. Joint accounts with spouses are risky. If you have 10% in any business (even something as small as an ice cream shop…not big companies) or an inheritance that you don’t report or probably many other things that you might not even think about living overseas, could cost you dearly if discovered, even if non willful. It is seriously too difficult to try and live with two tax systems in two different countries with constantly changing laws.
Joint accounts with spouses are not just risky, they can be downright dangerous for the couple in a FATCA world.
Today I was reading about some ‘Nationalization Ceremonies’ taking place in the US.
I wonder if some PR could be had by showing up outside the venue with Anti-FATCA leaflets reminding people that they’re giving away their financial freedom outside the US and if they change their mind it’s going to cost them $2350 plus compliance forms along with possible exit tax to renounce.
That would probably get some PR about the traitors at the ceremony handing out anti-American materials.
@All
I can’t speak for Republicans Overseas (RO) but I respectfully but strongly dispute Point 4. As one “homelander” who has focused (“way too much”?) on FATCA, I strongly disagree with the assertion that “blocking or repealing FATCA is very unlikely.” Sure, to date, that hasn’t happened, because no one’s really tried — yet. But the fact is, FATCA gores a lot more oxen than CBT does. The potential base of support on FATCA is thus far greater than that for CBT (which I fully agree should be replaced by RBT). While it’s tempting to try to “carve out” a targeted fix for a problem that negatively impacts in a very direct way a smaller set of victims (but which includes most of the readers of this site), that also limits the potential constituency. If anything, FATCA repeal would likely be *more* do-able than CBT by itself, and CBT’s best bet would be to piggyback it on FATCA repeal. Taking an approach of focusing on CBT and leaving FATCA as the inevitable flagship of a Leviathan, NSA-like global financial information dragnet will likely get nowhere on *either* issue. There’s nothing to be gained by conceding victory to the FCC (FATCA Compliance Complex): “FATCA is here to stay,” so let FATCA (and its evil offspring, OECD “automatic exchange of information”) roll on – just as long as there’s some cutout relief promised for expats. (Whether real relief will ever actually be provided is another matter.) A CBT “carve-out” approach reminds me of the Trojan Horse “safe harbor” advocated by Democrats Abroad, who when all is said and done are more concerned to carry water for “their” administration than their expat constituency. As for RO, of course they’re partisan too, but at least they’re trying to do something, both on principle and in practice.
Which leads to my next question: How many people reading this comment have sent their email to the GOP candidates urging them to endorse the RNC Resolutions against FATCA? A little help, please! http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=160&title=update-61615-jeb-bush-and-donald-trump-sent-emrepealfatcacomem-request-for-endorsement-of-rnc-resolutions-against-fatca
@ShadowRaider
Then how about the US of A let their expatriates go without exacting their pound of flesh beforehand? Oh yeah…it’s because of the money. ~dripping sarcasm~
It would be interesting if the RO could amount a large block vote of voters that could in theory influence close races. Ideally if they could register in states where the ‘residency’ requirements are lax (even resident for one day using a hotel address). Stop wasting RO votes in blue states only use them in close races.
It would take a lot of organisation, but the RO should set up a website to gather over 7 million votes potentially. I’d be interested how may DOs would vote Republican over FATCA.
Well…here is one Democrat who would have loved to vote for Hillary (and did send money to her campaign 8 years ago) but will now vote Republican, AND THE CAMPAIGN DONATIONS ARE GOING TO ADCS!
From the ROs point of view, they’re easy votes. Just set up the website to get people to register, exploit weak residency rules in key states, and the Republicans can have these votes very easily and punish pro-FATCA candidates as much as possible.
An anti-FATCA might cost the Republicans $1 while it might cost the Democrats $100 to counter that one vote.
There’s no debating or convincing. Just declare yourself anti-FATCA and get the votes.
http://www.cnet.com/news/ireland-says-it-might-help-us-recover-e-mails-from-microsoft/
The Irish Government supports Microsoft (because it has operation in Ireland) but throws resident Irish citizen with US taint under the FATCA bus. It doesn’t make sense.
One follow up comment.
The Irish Govt has no problem filing in a US Federal Court to stop the US DOJ getting its hand on emails from a Microsoft server in Dublin because it violates sovereignty but in the same breath a blank cheque for Ireland’s FFI data. I guess if an Irish citizenship’s rights are protected or not depands on whethet yor’re a big employer in Ireland to engage the US Govt.
I will not participate in the US political process. My enemy’s enemy is not my friend, either.
My donations will go to ADCS, and that is it.
Jim Jatras, I totally agree with your comment above.
Those who think FATCA is not so bad, as long as CBT goes away(CBT has been described by many as the ‘root problem’), are looking through a very narrow lens in my opinion.
@Jim, WhiteKat, I also oppose FATCA even without CBT. It’s unnecessary, disproportonal and unilateral. I just think that the focus should be on CBT first because it’s more absurd. But if you want to get rid of FATCA first, you surely have my support.
@Petros & Shadow Raider
Excellent comments, from my point of view, as one who came to Canada as an adult. I understand, however, the anger of the “non-meaningfuls”, those who have paid outrageous fines already, and people in Calgary 411’s position. I would be mad as hell. I should also include US persons with “pure” Canadian spouses or business partners. The anger is totally justified. That said, the problem is the US govt., not people like my 86 yr. old mother who knew none of this mess before I told her. Now she worries about me, my Canadian kids worry about me…etc. As to FATCA falling, it just takes the first domino (Canada) to start things rolling….maybe Australia next, or a feisty European country. We shall see. Meanwhile, Jim Jatras’ plea is a good one…but will our emails even get to these candidates?
@Jim Jatras
I disagree. You are not a homelander. You lack that specific frame of mind.
I should add South American countries. They each have a dog in this fight and some, like Chile and Brazil have many US persons. Did I miss something or have we heard nothing but crickets from that continent? Just wondering:-)
http://boston.cbslocal.com/2015/02/26/museum-of-science-starts-campaign-to-keep-cliff-the-triceratops/
What’s wrong with this picture? People in Boston have raised over $800K for Cliff the Dead Dinasour for the Museum of Science of Boston. IBS should be a no brainer.
It was announced on WBZ Boston tonight the over $800K was raised.
Speaking as a Vancouver Canucks fan.
Yep…Boston…that explains it.
As ADCS reserves right to have a go at the Canadian Government for mentioned injustices allowed by Canadian law, I reserve right to have a go at the Australian Government for mentioned injustices allowed under Australian law.
Most of my focus is on the US Government with lesser focus on Australian Government. I mention the injustice of US taxation of Australian Superannuation for Australian residents – as I believe this the most clear example within Australia of the injustices. I understand that I must make clarification for comments directed toward the US, but perhaps the most clear example for persons in the US is double taxation of retirement funds, similar to US 401K and IRA. However, this injustice may not ring through for US politicians who get government pensions and will not rely on retirement savings through 401K and IRA.
I have been after FATCALegalAction and Republicans Overseas for partisan tweets. I have quoted back to them of an article saying that FLA was founded by overseas Republicans and Democrats (and also there are Democrat plaintiffs in the works). I ask them why make partisan posts? Just focus on the injustices and don’t remind Democrats why they don’t like the Republicans – leave the partisan attacks to the Homeland Republican Party. They stopped with those posts.
Democrats Abroad are perhaps unredeemable and in need of new leadership, more representative of their overseas base; alternatively they may change their name, I suggested to them, to Homeland Democrats Overseas.
Some groups are very careful not to attack America itself or American laws. They have a very measured response. I say the injustices are nothing new. There have been articles in Forbes, WSJ and others for years outlining the injustices. Then why doesn’t the press questioning lawmakers directly on these issues? Why don’t lawmakers take note? There have been submissions to the Senate Finance Committee and House Ways and Means, and testimony of Rodger Conklin and others. It is all nothing new! The inertia warrants an aggressive tack, even lawsuit against the Canadian Government.
I say it is US persons overseas such as John X Hanson voicing opposition to CBT, FBAR, and FATCA who are expressing American principals and values to a much greater extent than embodied in those laws that punish US persons overseas. Those in the US opposing the communication of injustices by US persons overseas are less American for it.