[SEPTEMBER 27, 2016 UPDATE: “The Hill” today picked up on the upcoming House Oversight Committee hearings on FATCA. Obviously the fight will be challenging and there are lots of reasons to complain and be skeptical about an attempt by some U.S. Congresspeople to kill FATCA — note the tax compliance pundit in the Hill article who justifies FATCA because Treasury has spent a lot of money on it — but the FATCA hearing will happen despite the naysayers.]
Recently, Representative Mark Meadows introduced a bill in the U.S. Congress (complementary to a similar bill in the U.S. Senate) to repeal FATCA.
Witnesses are now being sought who have been significantly harmed by FATCA and are willing to testify at the Congressional hearing on FATCA in Washington D.C. Details on timings, length of testimony etc. are to be worked out. If you are interested in testifying please send Keith Redmond an email at: FATCA_Testimonials@outlook.com
Although a focus is FATCA, if you have been significantly harmed by U.S.-imposed citizenship-based taxation, which is enforced by FATCA, please also consider testifying at the hearing.
@Norman Diamond – Very interesting – the discussion at that second link (http://isaacbrocksociety.ca/2015/05/22/cook-v-tait-26-help-what-does-this-1924-ussupremecourt-decision-really-say/comment-page-3/#comment-6135009) includes comments from @Shadow Raider (and a link to a paper on CBT/constitutionality written by @Shadow Raider) which I had not seen and which seem to me (a non-lawyer) to suggest very good constitutional grounds for challenging CBT.
After reading @SR’s comments and paper, I feel a little less sceptical about the chances of a legal challenge to CBT. I’m still pretty sceptical, just because I think that even if a US court ruled CBT unconstitutional, measures would likely be taken to get the ruling reversed or adjust the CBT rules minimally in order to comply. But I am not a lawyer, so that’s just my opinion and I’d like to be proved wrong.
re challenging extraterritorial CBT;
this paper was raised here earlier at IBS and might be still of interest;
‘Double taxation: Riding on the backs of Filipino export labour’ by Genevieve Hamada-Plank , Ottawa Law Review / Revue de droit d’Ottawa 29 (1997-98) 395-423.
http://isaacbrocksociety.ca/2012/07/18/must-read-old-paper-on-conflict-between-filipino-citizenship-based-taxation-and-the-canadian-charter/comment-page-1/#comments
Note:
Original link from IBS post doesn’t work. This is a current one https://commonlaw.uottawa.ca/ottawa-law-review/sites/commonlaw.uottawa.ca.ottawa-law-review/files/17_29ottawalrev3951997-1998.pdf
Earlier here, Shadow Raider did a lot of work on finding out about and sharing info about the handful of countries which previously had some version of extraterritorial CBT and abandoned it.
For ex. he said;
http://isaacbrocksociety.ca/2013/12/30/irs-insider-explains-why-the-united-states-has-never-enforced-the-reed-amendments-banishment-provision-he-thinks-its-funny/comment-page-10/#comment-937372
“Here is an interesting book, partly available online:
Income Taxation and International Mobility
It explains why the UK adopted RBT when it created the income tax, which led the rest of the world to copy the same standard, and why the US adopted CBT. It also explains in detail the case of the Philippines, which initially adopted CBT because it inherited the US tax code, but later reduced it considerably as it started noticing various problems. Note that the book was written in 1989, and the Philippines eventually abolished CBT in 1997.
It seems that the countries that have of had CBT fall into two groups:
1. Influence from the US tax code: US itself (still uses CBT), Mexico (abolished later), Philippines (abolished later)
2. Dictatorships: Soviet Union (communist, CBT ended with the country), Bulgaria (communist, abolished CBT after democratization), Vietnam (communist, abolished CBT after opening the economy), Myanmar (military dictatorship, abolished CBT after democratization), Eritrea (still uses CBT, and still a dictatorship)
I wouldn’t be surprised if Eritrea ends up abolishing CBT before the US.”
Doing a search for “Shadow Raider” AND isaacbrocksociety.ca OR isaacbrocksociety.com will bring up some of his really superb research and prior discussions.
Also of interest re CBT is Shadow Raider’s comment here;
http://isaacbrocksociety.ca/2013/12/30/irs-insider-explains-why-the-united-states-has-never-enforced-the-reed-amendments-banishment-provision-he-thinks-its-funny/comment-page-10/#comment-937540
and his submission to the Senate Finance Committee, 2015.04
http://isaacbrocksociety.ca/presentations-and-submissions-on-fatcacbt/
and related http://isaacbrocksociety.ca/2015/04/09/for-the-senate-finance-committees-attention-and-study-common-sense-suggestions-for-tax-reform-to-remedy-the-fatca-discrimination-of-us-defined-us-persons-who-reside-abroad/
Don’t know what is happening to my icon colour and shape. Typo? Regardless, it is truly me.
@badger – Thanks for the links. Shadow Raider’s comments are very interesting. I do think he makes a good case overall, and makes many good points.
I have to say I view with some cynicism the account in the Bhagwati-Wilson book about nineteenth-century British gentlemen, at the height of the British Raj, pontificating about the unfairness of the subject (i.e., said British gentlemen) being expected to contribute to the support of the Government out of revenue derived from a foreign country. 😉 The Empire was built on revenue derived from foreign countries.
I continue to believe the reason most countries use RBT has more to do with practicality than justice. It’s just hard to enforce collection overseas. A fact which applies to the US also, or used to – otherwise they wouldn’t have let CBT lapse for so many years – and I, for one, would have been informed of the existence of CBT the year I moved abroad and stopped filing, instead of fifty years later when FATCA came along. Most countries can’t do a FATCA on the rest of the world, so collecting on CBT would be difficult if not impossible.
Note that when FATCA did come along, the UK acted with the speed of light to do likewise, insofar as it does have the power, by instituting the CDOT regime for the Crown Dependencies and Territories.
@ badger
RE: your icon change. I think everyone’s have changed — WordPress went a bit wonky awhile back. Anyway we’ll always know it’s truly you by the high quality of your comments.
@iota, re;
The British, and “The Empire was built on revenue derived from foreign countries.” Since the British at home, and those ‘abroad’ very much saw India and their other colonial ‘possessions’ as places to plunder at will, it was absurd for the British ‘abroad’ who were intimate parts of the colonial apparatus plundering the locals to argue an extraterritorial line.
But building or maintaining the US empire on “revenue derived from foreign countries” is exactly what the US also intends apparently – while imposing the costs of maintenance and potentially of extraction (FATCA IGAs as part of the continuum of assistance on collection) on foreign countries in every part of the globe.
: )
thanks Embee!
(p.s. I don’t know what emoticon portrays modestly sheepish smile).
@badger – “But building or maintaining the US empire on “revenue derived from foreign countries” is exactly what the US also intends apparently – while imposing the costs of maintenance and potentially of extraction (FATCA IGAs as part of the continuum of assistance on collection) on foreign countries in every part of the globe.”
Indeed. Though I question whether much imposition was required, where the wealthier countries are concerned.
@CEB, Too bad about Schumer. Bummer. I looked him up and he says he expects to be the Senate Majority leader because he expects the Democrats will win Congress. Yikes.
http://www.realclearpolitics.com/epolls/2016/senate/2016_elections_senate_map.html
RealClearPolitics is showing a neck and neck race for the Senate right now (47 versus 47 with 6 tossups). Look more closely, and Democrats have 44 seats deemed “safe or not up” (for election this year) versus Republicans with 40 seats deemed “safe or not up”. Schumer is “safe” to win his race whereas Rand Paul is “likely” to win his race in Kentucky. (BTW: The current majority Senate leader, Mitch McConnell, is also from Kentucky and is “not up” for reelection until 2020.)
http://www.realclearpolitics.com/epolls/2016/house/2016_elections_house_map.html
RealClearPolitics projects the Republicans will retain the House 218 versus 189, with 175 “safe” for D and 207 “safe” for R. Mark Meadows (NC) and the S.C. reps who cosponsored the anti-FATCA bill are NOT listed among the likely/leans or toss-ups. Maybe they’re considered “safe”? I don’t know this site well enough to know.
The polls between Hillary and Trump are in a lot of flux with a lot of millennials turned off by those candidates and preferring a third party option. Yesterday, Politico said “Clinton wins only 31 percent of the vote on the four-way ballot, barely more than Trump (26 percent) or Johnson (29 percent). Even Stein, who is at 4 percent in the poll overall, wins 15 percent of younger voters.”
Read more: http://www.politico.com/blogs/5-political-numbers-to-watch/2016/09/campaign-2016-week-numbers-228308#ixzz4KddIQn5q
@iota: The analogy to the British Empire is interesting, because when the British Empire tried to use its colonial trade to maintain itself, that’s when the Empire started to crumble. You’d think the US would learn . . .
@Jan: See that’s the thing that none of the people who have become active in trying to get this ridiculous nonsense overturned, rescinded, or what have you have asked: questions like: “Why is Schumer safe in his race?” Is it because he brings home a lot of bacon (pork) for his district? Does he have interesting lobbying connections. Do people like his seniority and the influence it brings so much that they’re willing to overlook his leaps of logic?
He certainly has some leaps of logic — if you ever saw his original rant against Eduardo Saverin, you’d know what I mean. When he goes ‘off teleprompter,’ he can seem even more unhinged than Donald Trump. Don’t look to find it on the Internet, the clips have been taken down. He’s even taken the trouble to film ‘do-overs’ with him behaving more sanely, reading from prepared notes, a teleprompter, what have you.
US presidential candidates get subject to a lot of trolling for dirt. The present batch is no exception. This is why no-one competent wants to run for President — they don’t like being drug through the dirt. But Congressmen and Senators get of relatively lightly, yet when they band together and play back-room politics, they can be even more damaging. So a bit more attention focused on why Congressmen do what they do would be well-placed.
The US Congress is not like Canada’s parliament. I always like watching floor debates of the latter — things seem so transparent. The US Congress is anything but — Congressmen routinely make speeches taking one position and then vote the other way. One ought to be asking why.
This thread was started to help Keith prepare for a Congressional hearing on the House version of the FATCA repeal bill. A Congressional hearing can be even worse than a courtroom — members can ask anything they like, with little room for objection. Members have been known to box witnesses into answering yes or no questions that make no sense, and cast them unfairly in an unfavorable light they might have avoided had they been able to state why the question was bogus.
It’s too bad he didn’t get invited to something where members are also asked to testify. Perhaps a strategy would be for him to invite Sen. Schumer or the other sponsors of this insane legislation to do so. I wonder how far he’d get with that.
@CEB – “The analogy to the British Empire is interesting, because when the British Empire tried to use its colonial trade to maintain itself, that’s when the Empire started to crumble. You’d think the US would learn .”
I believe that’s the point of having an empire – bringing the goodies back home. It worked well for Britain for a very long time, right up until the twentieth century when they began to lose control of the seas.
The world is different nowadays. Tax treaties are not battleships, and Canada, the UK, and the other OECD countries are not colonies but wealthy nations in their own right. Squabbling over taxing rights is the game du jour, but the real power struggles are elsewhere, and can’t be won by the IRS.
@iota: Your comments run in the direction of ‘I don’t have a solution, but I appreciate the gravity of the problem,’ which kind of talk leads people to stasis. I can’t help but wondering if you’re not some sort of troll for the status quo.
The purpose of this thread is to post information pursuant to making the Congressional hearing that Keith Redmond has been asked to organize count. That’s not stasis. I’d suggest the participants focus in on that, and leave the general (written) gas-bagging about overwhelming difficulty and other defeatist comments aside.
I don’t know how useful any of this is for Keith — I’m guessing not much, because he hasn’t participated.
@CEB – a troll for the status quo? That’s a novel accusation. What does it mean?
I do try to keep in touch with reality, consequently I don’t have high hopes of FATCA/CBT being overturned by legal action or by Congressional action. However, I also think court cases draw attention to the problems FATCA has created, and make it more likely that some adjustments will be made, along the lines of the ACA’s SCE proposal.
I also think the US might eventually decide to sign up to CRS, in which case FATCA would presumably become redundant.
But renunciation is still the most effective solution, if obtainable. IMO.
Today “The Hill” mentions the upcoming kill FATCA hearing at the House Oversight Committee in U.S. Congress. Date still not confirmed:
http://thehill.com/policy/finance/298130-lawmaker-seeks-to-investigate-obamas-foreign-tax-compliance-law
CBS/CNN have created a website asking for suggested for the next presidential debate, and claim they will consider the top 30 vote recipients.
I’ve made an RBT / FATCA question. IBSers – please upvote it and get it into the debate:
https://presidentialopenquestions.com/questions/6739/vote/
@biscuit: You got 3 votes so far, including mine. Meanwhile, “tax the rich!!!” gets 3000+ votes. Presumably when such a question is asked, Clinton will blather forthrightly about all those taxable billions hidden abroad. Maybe such talk will finally goad Trump into taking some off-the-cuff stance (as all his ‘policies’ seem to be).
@Barbara : Thanks! It is up to about 60 now, and also at the top of the ‘trending now’ list in the taxes section.
Mods : a polite request to bump it to the main page to get some more votes?
“https://presidentialopenquestions.com/questions/6739/vote/”
It accepted my e-mail address that ends in .jp, but rejected my zip code.
Since you live overseas, you are no doubt fabulously wealthy. You could use 90210.
@biscuit
Since I am fabulously wealthy I should have multiple US houses and multiple email addresses.
Vote early and vote often.
Real Americans only reside on the plantation but travel as tourists to fabulously wealthy countries where all us zillionnaires live so they can look up at us … or is it look down on us, when they bargain down the prices of our cheap T-shirt souvenirs from 9 million US dollars to 8?
For those who think other countries love their expats, I would suggest you are wrong. Just because they don’t tax them does not mean they love them. The government just understand the injustice, impracticality and the negative outcome for their own country in a global market place.
As an expat myself for much of my adult life, I have seen pure hatred expressed for UK expats by those in the UK. You know, those rich people sunning it up with a G&T in one hand while the poor folk at home have to work and pay taxes.
This has been highlighted recently by those who are thinking of the interests of British folk in the EU when Brexit takes place, and some of the vitriol in the comments has to be seen to be believed. It’s a case of “they left us here and so they took their chances, not our problem”.
If there was any argument for CBT in the UK, a LOT of people would be all for it even if they themselves came out the net losers as a result.
Ring any bells?
“The government just understand the injustice, impracticality and the negative outcome for their own country in a global market place.”
Yep. Especially the impracticality.
“If there was any argument for CBT in the UK, a LOT of people would be all for it even if they themselves came out the net losers as a result.
Ring any bells?”
No. I doubt if most UK residents ever give any thought to the question of whether expats are taxed or should be taxed unless they’re considering emigrating or have expat friends / family.