[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.
The UK population probably don’t think about taxing expats, but if you worded it just right, they would be DEMANDING we taxed British citizens who left with their money to enjoy British citizenship in another country while evading British taxes and leaving them to pick up the tab for running the country.
Most US residents don’t think about taxing expats either, until you tell them about the rich people leaving to avoid paying their fair share.
The idea that somehow the British (French, German..) people just love their expats and wouldn’t dream of taxing them because it’s unfair is a nonsense. The bells should be ringing because the mentality of the people is the same really, be it French, British, American. It’s just that common sense has prevailed, just not in the USA.
Not yet at least.
Personally, I’m hopeful that if any good comes out of FATCA, it will be the end of CBT.
The problem as always will be getting the short sighted fools in the USA to understand why it’s a good idea to stop attempting to tax those who do not live in the country. Regardless, the USA carries on like this then will be hardly anybody left to tax.
“The idea that somehow the British (French, German..) people just love their expats and wouldn’t dream of taxing them because it’s unfair is a nonsense.”
But who is claiming that?
” It’s just that common sense has prevailed, just not in the USA.”
Difference of history. European coloniser countries have a long long tradition of sucking money and goods from their colonies at the barrel of a gun. Once the empire is toast, the guns and gunboats lose their power.
The US has a different history, and, as a superstate, a different relationship to other countries. And representatives from fifty different and disagreeing and (often) disagreeable sub-governments making (or heavily influencing)?the decisions. It’s no wonder the US can’t walk and chew gum at the same time.
I have seen many posts claiming other countries love their expats. They don’t, they hate them. They hate them for turning their back on this great land, they hate them for being able to afford to leave this great land, they hate them for taking their money and they hate them for not paying taxes. That applies to any country.
If the public had their way, they would not only be taxed, they would be punitively taxed. But the public is stupid. So are some politicians.
The US certainly does have a different relationship with other countries, and other countries have noticed. If you mean by relationship, the US is the stupid fat bully and the rest of the world is the bullied, you’d be right.
These things have a way of sorting themselves out though. If the USA does not abolish FATCA and CBT, the world will simply look to avoid having anything to do with the USA or Americans. It’s happening right now.
“”European coloniser countries have a long long tradition of sucking money and goods from their colonies at the barrel of a gun.””
Which is of course what FATCA and CBT is doing to the rest of the world, except no gun or even a nuke is required because closing down a countries banks is so much more efficient. If the USA thinks they are going to get away with this, they need to think again.
“”Once the empire is toast, the guns and gunboats lose their power.””
Exactly.
“I have seen many posts claiming other countries love their expats. ”
Are you sure? I’ve seen many posts claiming the US hates its expats but I don’t recall posts claiming that other countries love their expats.
“Which is of course what FATCA and CBT is doing to the rest of the world, except no gun or even a nuke is required because closing down a countries banks is so much more efficient.”
Exactly. That’s what I mean when I say that as a superstate the US has a different relationship with other countries. They control the world’s largest economy and the dollar-based banking system, plus they have military alliances with many countries, and the military in question is theirs.
But note that even so, with all that power, they can’t enforce CBT.
“If the USA thinks they are going to get away with this, they need to think again.”
Unfortunately, FATCA is their excuse for not signing up to CRS. Personally I think it’s unlikely to be repealed, but looking quite likely, now, that it may be modified. And even a slim possibility that CBT may be reconsidered. But who knows, with chaos in the White House and constant strife, as usual, in Congress.
Modifications to FATCA are going to be a disaster, we know this. It will be li[stick on a pig. The toxic combination of FATCA and CBT will remain. SCE is not going to work, as banks will be left with the task of making sure an American is REALLY resident (that in itself is a legal minefield as I know from experience) and knowing their business could be toast if they get it wrong, the solution for the financial institution remains the same, search for and lose the Americans.
Expats by their very nature tend to be more mobile than most, so who keeps track of residency, how will it be defined?
In my case, I just moved countries. I have two Belgian banks that still have my Belgian address on file, but I don’t live there. I now live in the UK, but there is no residency register in the UK. Tomorrow I might get a job offer in Prague(really) so who is keeping track of where I live and who pays if it turns out that from a US definition, despite a local definition, I’m not really resident?
It’s another can of worms for the bank and it’s a carve out only for a small few, if it works.
The fall out for the USA will eventually have them understanding the folly of what they are doing, and have them repeal it. My wife played a very large part in setting up the Czech European base for a large US multinational over the last couple of years with great potential for employing Americans in Europe, but you know what comes next, right?
Instead it’s people from all over Europe mainly, but some from around the world. No Americans though, not in a US company.
I myself, here in the UK, am looking for a business partner for my export to the nearby continent business, and although I know two people I would love to have on board, I won’t touch them with your bargepole.
The bottom line with CBT and FATCA is that any intelligent person can see that the former is a bad idea, the later turning the former, in combination with a tax code that hates all things foreign, in to an unmitigated disaster for the USA and Americans abroad.
If the USA does not fix this then Trump will get his wall and in many ways already has. The world will help the USA build it higher, as any contact with the USA, US citizens and the US dollar has become dangerous.
“Modifications to FATCA are going to be a disaster…”
Maybe. Or there may be no modifications. Or it could be made worse. USCs have few rights, and it’s not easy to exercise the ones they do have.
Renunciation is the most reliable solution.
@Mike
Mike says
“I have seen many posts claiming other countries love their expats. They don’t, they hate them. They hate them for turning their back on this great land, they hate them for being able to afford to leave this great land, they hate them for taking their money and they hate them for not paying taxes. That applies to any country.”
I disagree, I remember seeing many TV programs in the UK that follow UK expats living abroad, not just the high flying business and banking executives but many starting up simple businesses such as B&B in Spain or fishing trips in Portugal.
Many UK retirees seeks out a cheaper, warmer retirement. I have never seen them criticized for this. It is a European trait to live and work throughout the EU. Many EU citizens have mixed nationality. I have NEVER heard anyone state they are traitors for leaving as is the case in the USA.
Heidi….TV programs about UK expats living the high life in the sun do not warm the British public to their expats. The fact that many seek out the sun when they leave the UK does not mean the UK loves their expats. The fact that some leave to work and usually for a very good job does not warm the British public to their expats. If you want to see the general attitude to those who have “abandoned” the country for a nice job or to live in the sun, then look to the comments section on any news article on the potential problems that may be faced by these people come Brexit.
By the way, I have never actually seen an American called a traitor for leaving, not actually a traitor. Ungrateful for turning down the opportunity to live in the USA, unpatriotic for not wishing to pay their “fair share” of taxes and several other terms, but not actually a traitor.
I would suggest that no matter your nationality, you can expect little sympathy if leaving the country brings problems, even if the country you left IS the problem. The public in general do not like people they perceive to be doing better than them including those with “wherewithal to leave the country” (quote from Elise Bean who I’m sure was not trying to suggest these were rich people, ha!) and do enjoy a little schadenfreude.
Any Brexit-related press report or online discussion can be guaranteed to attract vehement expressions of hostility towards anyone who didn’t vote Leave, and anyone whose plight might tempt a UK Government to consider allowing a single EU citizen to continue living in the UK.
That’s the reason for the hostility towards UK citizens living in EU countries – not taxation.
Of course it’s not taxation.
The problem with your theory, Iota, is I have seen this hostility to those who “abandoned” the country many times, long before Brexit. Secondly, I have seen people who voted remain who have expressed the same “tough, they chose to leave” sentiment when the potential issues for Brits in Europe are highlighted.
Lastly, do you really think all those living outside the UK voted to remain? I didn’t.
You are right about taxes though, but only because the homeland Brits have not heard the Brits in the rest of the world complaining about their British taxes because they don’t have any to complain about. If they did, you can bet your life that the clamour for them to “pay their fair share” would be just as loud as it is in the USA.
No, the animosity shown to UK expats is because they are perceived to have abandoned the UK for a better life elsewhere, so “stuff ’em”. It’s pretty universal.
But Mike, comments on Brexit-related news articles were the evidence you cited above in support of your theory that most UK residents hate Britons who emigrate.
We’ll just have to agree to disagree. It seems the UK residents you know or encounter express hostility towards emigrants, and those I know or encounter don’t. Sympathy, rather, in the present uncertainties. Though in the end, let us hope, it will be sorted out.
@Tim
“Lastly, do you really think all those living outside the UK voted to remain? I didn’t.”
Well I imagine you are one of the few with another citizenship to enable you to remain, without Teresa making you a pawn in her negotiations. Some in Britain have always had an island mentality. But I am not here to argue the pros and cons of the British choosing Brexit.
The EU has a constant movable workforce and no one I have ever met has criticized anyone’s right to work outside their citizenship country. I have British and European citizenship (ex US) and constantly heard criticism from the US when I stated my intention to return home to Europe.
Heidi…No I am not one of those with another citizenship, I am one of those who is quite confident that nobody was going to try and remove me because there was no good reason to try and every reason not to, and secondly, couldn’t if they wanted to due to basic human rights laws.
I’m sure some expats did vote remain, a majority even, but I can introduce you to many who had no concerns for their security in the case of a Brexit vote and who did vote for Brexit.
Iota….The Brexit comments are only a part of the evidence that the UK has no love for those that abandoned their country for the sun or a great job, I have seen the evidence for two decades.
“The Brexit comments are only a part of the evidence that the UK has no love for those that abandoned their country for the sun or a great job, I have seen the evidence for two decades.”
Abandoned their country? Strange way to talk about emigration.
There doesn’t seem to be any actual evidence (as opposed to anecdotal stories) to show what proportion of British residents feel hostile towards emigrants, and what proportion feel positively towards emigrants, and what proportion simply don’t have any strong opinion either way. It would take another referendum, or at least a poll. Hardly seems worth it.
@Tim
I am pleased as a Brit you are so confident you can stay in your chosen EU country, I know many retired Brits who are not and who have not been given that assurance from Britain but who place their trust in the EU and the words of Donald Tusk.
But we have hijacked Brock and I will beg to differ.
We must agree that Americans do not have those basic human rights laws that you as an EU citizen claim.(for now)
“For those who think other countries love their expats, I would suggest you are wrong.”
I agree 90%. The amount of love isn’t a positive number, it’s just larger relative to the amount of love that the US has for its expats. Any finite negative number is larger than negatie infinity.
However, the other 10% really do love their expats. Their overseas workers who send home money are national heroes.
“The government just understand the injustice”
I don’t think so. Canada mostly doesn’t tax its expats (though the exceptions make it just about impossible to do a Canadian tax return too). But it’s not because the government understands the injustice. If the government understood the injustice, ADCS wouldn’t be needed.
The Philippines loves their expats. Indonesia loves their expats. I just learned yesterday that the remittances sent home by expat Filipina (mainly women) domestic helpers, nurses, sailors (mainly men), etc. account for ten percent of the country’s entire GDP. As for Indonesia, remittances from abroad account for 0.8 percent. Which is still a sizeable amount.
We all know the Philippines once practiced CBT. I don’t know any numbers, but I suspect that once they dropped it, remittances went way up, since expat Filipinos no longer had any motivation be be secretive about their foreign income, and could send it home to family.
The saddest part is, if the USA dropped CBT, there could very well be a similar effect. People like me might actually invest more in the USA. Currently if I did so, it would make my taxes so much more complex that it is a prohibitive factor for me, no matter what returns I might get on, for example, a US property.
Remittances and Household Behavior in the Philippines
https://www.adb.org/sites/default/files/publication/28401/economics-wp188.pdf
Figure 1 shows a jump in 1998, but that is a percentage of GDP so this looks like GDP shrinking during the Asian financial crisis.
Figure 2 shows a smaller jump in 1998, but more importantly it shows a trending increase both before and after that year.
Figure 6 shows a jump in 1998 and it’s an absolute amount in US dollars not a percentage of GDP. But again there’s an overall increasing trend.
I wonder if there’s a chart of how many overseas Filipinos visited the Philippines each year. If that number jumped after CBT was abandoned, it might mean they no longer had to keep their activities secret.
@Barbara – I wonder if the remittance factor doesn’t already play a big part in the US economy, as people migrate from poor states to richer states and send money back to help their family. American inequality is horrifying.
http://www.latimes.com/science/sciencenow/la-sci-sn-life-expectancy-varies-20170508-htmlstory.html
There’s a similar effect in other supposedly wealthy countries including Britain, but not nearly so severe. In America the ideology and the culture and the system of government all exacerbate the problem. Sad.
Is 1998 when the Philippines switched to RBT? As for Filipino expats visiting the Philippines each year, that would indicate little. Speaking as someone who has indeed employed Filipina domestic helpers in the past, they are bound by the rules of many governments to return ‘home’ at least once every two years.
In my experience in the 1980s and 1990s (back when I was paying attention to these things) remittances were mainly done through private money exchanges, in which one gives money to Company A in Hong Kong, Singapore, or wherever. Company A then wires it to their affiliate company in Manila, Company B. Then Company B sends a courier with a wad full of cash to either deposit the money in the recipient’s bank or literally takes a pedicab to their door and hands them the loot. I’ve personally sent money to people in Manila this way, again, quite a while ago. But it was considered the normal method.
One might suspect that this method was a way around the whole CBT tax thing. These days I see more and more Philippine banks with overseas branch offices, where the remittances are done directly bank-to-bank. Nobody has to worry about tax declarations. The only restrictions are applicable to all banks, in which an international transfer of over US$1000 requires an extra form declaring the source of the money, but that’s not for tax reasons.
I can certainly imagine if the USA switched to RBT, it would open a whole new world of “astronaut” expats, who work abroad on contract and wire most of their money home. Sure, I guess Homelanders Abroad do that already. But RBT would make it that much more likely that US companies abroad could bring in more Americans on contract, and fix the US trade balance much more effectively than the IRS is doing by extorting money from banks and expats.
@Barbara – I wasn’t thinking of Americans working outside the US and sending money back to families living in the US. I was thinking of those living in the US who might be working in a rich state and sending money back to family living in a poor state. But perhaps the rich states wouldn’t allow that.
“We must agree that Americans do not have those basic human rights laws that you as an EU citizen claim.(for now)”
I’m not relying on human rights laws, it would never get to that. If people wish to believe that the rest of the EU is going to start throwing out all the Brits because they can, then let them think that way. You can’t make people “think right”, we know this when trying to get people to see why FATCA and the US tax code are wrong.
I would ask the same people why countries like Belgium have not already thrown out the many thousands of people living there who are not EU citizens at all, including Americans. I would ask the same people what they think the result will be once the country is purged of any non EU resident, and what do they think will happen when all the multi nationals have lost half their staff, including the CEO?
Then what will Belgium do with the thousands kicked out of the UK, to arrive unemployed in Belgium? Children dragged out of schools and sent to a country where they might not even speak the language?
It really does not take much deep thinking to see why it’s simply not going to happen. That’s why it had no influence on my Brexit vote and that of many others.
As to Americans and human rights, and as a very international person myself, I shudder at the thought of being claimed as the property of that country. What the USA has done with it’s tax code and FATCA is a global scandal on an epic scale, one so grand that most Americans simply refuse to believe the consequences. No, they are not free to leave and yes, they are the property of the US government.
Basic human right as defined in the Universal Declaration of Human Rights is the right to freely come and go, one that is denied to Americans.
@Mike
Is it the tax code itself or the fact that it applies to citizenship, not residency that’s the problem for Americans living abroad?
The problem lies in the fact that a term of our citizenship includes the obligation to pay taxes. It’s evidenced by the fact that the failure to pay tax can now result in the denial of a right of citizenship, that is the right to leave the country.