There is something quintessentially American about chasing the whale. While FATCA harpooners rove the globe, their keen steel promises to take out countless ordinary fool “U.S. persons” as collateral damage. Grotesque governmental pursuit flounders through more dimensions than a bad science fiction novel.
Concepts of “residence” and “taxation” will never be the same again. Impacted individuals may amount to little more than froth on the tsunami. Even if their own wrecked lives inevitably stand front and center in their own perspectives.
The so-called sharing economy could be on the verge of dwarfing clunky old corporate inversions as a threat that zeroes in on plodding and entitled behemoths like the U.S.A. If nothing else, watching techno-payback inflicted on a failing state may offer at least the respite of schadenfreude.
In the five years since these businesses [Airbnb, Uber, etc.] began their spiraling growth, some cities and states around the globe have fought hard to make them play by the same rules as traditional hotels or taxis and collect various local taxes — often as not, they’ve lost. As the new breed of companies moves toward profitability, transforming larger chunks of the economy, policy experts say the battle is likely to shift to the national level, where billions of dollars a year in corporate taxes could be at risk. … “These companies are the future,” says Stephen Shay, a former top international tax lawyer at the U.S. Department of the Treasury, now teaching at Harvard. “The nature of their business and the structure of the companies can allow them to essentially keep all of their profits out of the U.S.”
You can read the online version of the rest of Bloomberg Businessweek’s article:
Sharing Everything But the Wealth (April 11-24,2016) 29-30.
Interesting article. Also interesting is the linked article and video report below, that appeared on the BBC News online site today. When thinking about the subject of ‘global identity’, one quickly realizes just how out of synch the United States is with this concept and the rest of the world. By desiring, having and enforcing laws such as FATCA, the United States is only destroying their own position in the future of allowing their citizens to have a global identity in a globalized world. Their approach is Byzantine, an anachronism from some feudalistic ancient time, where humans were property, mere chattel. The United States with FATCA is denying its people a role in being global citizens and will pay a tremendous economic and social price for such shortsighted stupidity.
http://www.bbc.com/news/world-36139904
When I click the link I get a condescending article about how people don’t save their ever dwindling fiat money: “How Americans Blow $1.7 Trillion in Retirement Savings”
Sorry Petros. Link fixed.
@ usxcanada
You have addressed primarily the problem of transfer (mis)pricing.
https://en.wikipedia.org/wiki/Transfer_mispricing
Much of it is currently legal, and hence much is to be taken as tax avoidance.
This tax avoidance by companies is to be distinguished from tax evasion by individuals.
The Congressional Research Service made two very rough estimates of each (2015): $100 billion per year (page 19) versus $50 bn/yr. (page 27).
These are such rough estimates that they could triple depending on assumptions. But already the tax avoidance by companies is twice as high as the tax evasion by individuals.
@ Arthur
I like your point about global citizenship.
Synchronicity City!
Phil Hodgen has just hammered on a very similar nail. 29 April 2016.
Or they are pirates on the high seas headed toward that fatal vortex that will suck them straight into Davy Jones’s Locker!
Cloud Computing Taxation for Minimultinationals
Well, this will sure help (more US over-reach)…
http://www.bbc.co.uk/news/technology-36169019
Where is the democratic representation, the checks-and-balances, the of-the-peoplery here?
Thanks for that very important alert @KingOftheRoad;
I am posting this excerpt below, because it chills me in general, but made me think of the US demand that those with local legal accounts OUTSIDE the US having to register and create an account with the Financial Crimes Enforcement Network FINCEN in order to file FBARs – which they deliberately demand that filers do so only ONLINE now;
“The US Supreme Court has approved a rule change that could allow law enforcement to remotely search computers around the world.
Previously, magistrate judges could order searches only within the jurisdiction of their court, often limited to a few counties.
The US Department of Justice (DoJ) said the change was necessary to modernise the law for the digital age.
But digital rights groups say the move expands the FBI’s hacking authority.
The DoJ wants judges to be able to issue remote search warrants for computers located anywhere that the United States claims jurisdiction, which could include other countries.
A remote search typically involves trying to access a suspect’s computer over the internet to explore the data contained on it.
It has pushed for a change in the rules since 2013, arguing that criminals can mask their location and identity online making it difficult to determine which jurisdiction a computer is located in.”………………
from;
‘US Supreme Court approves expanded hacking powers’
29 April 2016
http://www.bbc.co.uk/news/technology-36169019
I just got my Canadian census in the mail that I am required to fill out by law. What’s to stop the Canadian government from passing on this information to the U.S. government for a “U.S person” as they now do the banking information?
Henry,
Related, I just went to a Calgary Police Service office to apply for a police check for a volunteer position. Question at the top right-hand corner for my City of Calgary Police Check: Where were you born? City, Province or State, Country. Following the area for my present name, they also asked other names I have had, including birth name and other married names, top left-hand corner. Police or RCMP checks for volunteer positions in which you may deal with vulnerable persons are another place that, when you think of it, likely will ask for that information necessary to do such a check for any reason you should not pass the check.
@Henry: I’m no expert, but they don’t have the authority to transfer it, as the IGA is what gives the Revenue Agency the power to hand over only specific banking information.
There’s no such requirement in place for census data. Yet.
Henry mentions the Canadian census. We had a “spirited” conversation about this awhile back at Brock. For the record, I was and continue to be against the now mandatory (thanks to J.T.) long form. Here’s just one of many sections which contains questions that I find worrisome and far, far too intrusive …
And here’s another highly dangerous section for “US persons for taxation purposes” …
Oops, I missed the blockquote on that first section.
Interesting article above. I can say that in the last 2 months I have done some business with 2 well known American companies, priceline.com and airbnb. My credit card showed the Priceline payment being billed out of the UK, and the Airbnb shamelessly says on their website that transactions within the USA are billed there, and all transactions outside the USA will be billed in Ireland, exactly as my credit card said. Yep…..schadenfreude is delicious.
I do agree that it is worrisome, but for the time being I can’t see it being used for US/FATCA purposes.
“Your answers are collected under the authority of the Statistics Act and will be kept strictly confidential.”
There’s even a question for us to authorize the data to be accessed in 92 years (2108).
There are many things I worry about; this is not one of them. Yet.
@ Henry and All
You might like to take a look at this website …
http://countmeout.ca/
And read the long form questions here …
https://www12.statcan.gc.ca/nhs-enm/2016/ref/questionnaires/questions-eng.cfm
@ Isabelle Brock
“Your answers are collected under the authority of the Statistics Act and will be kept strictly confidential.”
To me that ranks up there with, “We’re from the government and we’re here to help you.” Approach that approach with great caution.
The Lockheed Martin link…. ewwwwwwwwwwww.
I can’t say that it has turned me off the Census, though. I’m by no means a libertarian and I think that, this whole debacle excepted, government CAN be a force for good. I wouldn’t be working where I work if I didn’t.
hahaha EmBee. Guess where I work!!!
I will say that I do find the interlinking between the CRA and the Census suspect because whenever we try to get information link to faciliate transition for our clients, all we get is “Nope, this can’t happen, Privacy Act….”
@EmBee
I can see why the Canadian government is having Lockheed Martin run and control the Canadian census. This eliminates the stick problem of the government being forced to turn over the information to the U.S. when it wants it. I’m sure Lockheed Martin will only be giving the information to the FBI, the CIA, the NSA, and the IRS but no one else. LOL! This is really unbelievable!!
@ Henry
It’s the world we live in, so it’s quite believable to me. Thirty years ago I could never have imagined the extent of the surveillance state that exists today. Everything falls upon us in carefully calculated degrees and by deception. They even manage to convince everyone that it’s for their own good. 🙁
“Thirty years ago I could never have imagined the extent of the surveillance state that exists today.”
This answer won’t help in Canada, and it won’t help in a certain other country, but anyway…
Two hundred thirty years ago, some dead white males, mostly wise dead white males, did imagine it. They enacted a 4th amendment to prevent exactly that. They even said what needs to be done if the state runs amok.