Today (11/16/2017) the floor of the House passed the House tax reform bill. The earlier version is here .
Today also the Senate Finance committee passed the Senate tax reform bill. See link
Do not yet have the final versions of either bill but suspect that we are not helped in the bills. Will post here final versions when they become available.
Listen to the C-span clip found by BB in which Residence-based taxation is mentioned by Golding and Brady in the House tax bill debate — none of this however, appears to have been incorporated into the House or Senate bills passed on 11/16/2017
Republicans Overseas (RO) continues to press on, to make changes in the final tax package that will help us. The fight is not yet over, but it continues, right from the beginning, to be an uphill battle — and the odds don’t seem very good right now. RO says: “Again we need to focus on the Senate side since this fight is far from over.”
Personally, it makes no sense to me to blame Solomon and the handful of people at Republicans Overseas for trying to make a change and, so far, failing. Yesterday a friend reminded me that there was this Ismene, who kept telling her sister Antigone that it was pointless to even “try”: “…but you’re bound to fail…No sense in starting a hopeless task…Go then, if you are determined, to your folly, etc. etc.” Antigone responded: “When I have tried and failed, [then] I shall have failed.”
But in general I think we don’t want to lose sight of the fact that CRS is designed to ensure that residents (be they citizens or non-citizens) report assets outside the country of residence so they can be assessed tax accordingly. It’s designed to prevent the sort of “offshoring” that is simply tax evasion. Ergo, as much as I would personally enjoy being a villain with millions hidden in the Caymans, I cannot oppose CRS. (As opposed to the legal but morally dubious tax avoidance exposed in the Paradise Papers, but that’s a different argument.) FATCA as applied to US residents is no different, and again something that fundamentally I don’t have a problem with. The first batch of folks who got clobbered by the Swiss bank campaign fully deserved it (and deserve all the shitty karma that comes their way given the collateral damage that we here are now dealing with).
Our only issue should be with FATCA applied to non-residents – US expats who’ve made their lives elsewhere, dual citizens, accidentals. Which is a consequence of CBT of course.
@JapanT
“They and everybody is working on that.”
Well then everybody who wants to work overseas needs to be a little smarter on these issues, use whatever legal structures are available to mitigate the damage, or in certain cases vote with their feet by not going to countries where a punitive estate tax would be assessed against assets built up prior to arrival.
Yes, I now refusal and closing accounts is not new nor specific to Japan, hence my “Where America leads, the world follows”.
As far as maintaining addresses here and there, with ever inceasing controls on such things and various pressures put upon FIs to “know their clients”, I suspect that simply keeping a mailing address in the UK or the US would not work in the long run.
“But in general I think we don’t want to lose sight of the fact that CRS is designed to ensure that residents (be they citizens or non-citizens) report assets outside the country of residence so they can be assessed tax accordingly. It’s designed to prevent the sort of “offshoring” that is simply tax evasion. Ergo, as much as I would personally enjoy being a villain with millions hidden in the Caymans, I cannot oppose CRS. (As opposed to the legal but morally dubious tax avoidance exposed in the Paradise Papers, but that’s a different argument.) FATCA as applied to US residents is no different, and again something that fundamentally I don’t have a problem with. The first batch of folks who got clobbered by the Swiss bank campaign fully deserved it (and deserve all the shitty karma that comes their way given the collateral damage that we here are now dealing with).
Our only issue should be with FATCA applied to non-residents – US expats who’ve made their lives elsewhere, dual citizens, accidentals. Which is a consequence of CBT of course.”
Oppossed to the whole thing. First, how many times does the same pile of money need to be taxed. I pay taxes on my earning in the form of income tax. Why then, must I pay tax on the some money again just because I had enough left over to invest somewhere. If I move money from country A to country B after paying taxes on it to country A, what claim have they in whatever happens to or is done with that money in country B?
What is morally wrong with tax avoidance? Whay is it wrong to not owe tax? Why is it right to force all who have money outside the country they live in to prove they are not criminals? Why is it right to endanger all these individuals and their families by having such highly sensitive personal info shared with massive numbers of people who will not be held accountable for leaking or even selling their data?
As those folks using Swiss banks were caught and brought to justice WITHOUT FATCA and CRS, we have evidence that these draconian policies are not needed.
@JapanT
I tend to the view, perhaps optimistic, that human greed, self-interest, short-sightedness and ineptitude will mitigate against the worst visions of a dystopian future.
Returning to my hypothetical example, I can’t really see it being in the interests of the Canadian government to let a few million in capital leave the country when a Canadian citizen who owns a house in Vancouver happens to pass away while on a longish assignment in Japan. Particularly as the heirs from whom the capital is being taken are citizens, residents and voters. Why is it in Canada’s interest to facilitate that collection, particularly as they have no estate tax of their own, so no reciprocal benefit.
I agree, in future it may be more difficult to maintain the fiction of multiple countries of residence. But probably not as difficult as you fear.
For someone who freely admits to having no money of his own, you certainly fight hard for the rights of others to do whatever they want with theirs. If I were in your shoes, I’d be choosing Karl Marx over, I don’t know, Ayn Rand.
All that being said, these are vastly greater issues than I have the time or energy or frankly expertise to debate. I think what we can best focus on here is fighting two things: (a) the designation of all US citizens as US tax residents, and (b) the imposition of US reporting requirements on non-resident US persons. That’s more than enough to keep us all busy.
Heitor David Pinto has weighed in on Anthony Parent’s idea. Something to think about.
“How would the Japanese government know of the estate, or compel payment?“
Japan requires each resident to report all overseas assets if the total value exceeds 50 million yen (around US$440,000 now). If a Canadian citizen doesn’t report that they still own a house in Toronto that they didn’t sell when they moved to Japan, I don’t know if the Japanese government might find out about it.
I think subsidiaries of TD, except for TD Canada Trust, closed accounts of all residents of Japan around two years or so before that. They didn’t say why. I guess it could be because of reporting requirements but I don’t know how Japan could enforce reporting requirements (unless TD itself still has some kind of operation in Japan that I don’t know about).
“Returning to my hypothetical example, I can’t really see it being in the interests of the Canadian government to let a few million in capital leave the country when a Canadian citizen who owns a house in Vancouver happens to pass away while on a longish assignment in Japan. Particularly as the heirs from whom the capital is being taken are citizens, residents and voters. Why is it in Canada’s interest to facilitate that collection, particularly as they have no estate tax of their own, so no reciprocal benefit.”
Unless Canada adopts, as it probably will in time, a similar requirement.
“For someone who freely admits to having no money of his own, you certainly fight hard for the rights of others to do whatever they want with theirs. If I were in your shoes, I’d be choosing Karl Marx”
Why?
@ND
“I think subsidiaries of TD, except for TD Canada Trust, closed accounts of all residents of Japan around two years or so before that. They didn’t say why. I guess it could be because of reporting requirements but I don’t know how Japan could enforce reporting requirements (unless TD itself still has some kind of operation in Japan that I don’t know about).”
That is roughly the same time frame my British friend had his accounts in GB closed. Afterwards, he shpped around for other places to pen accounts in. He was told “No.” a by each non Japan based FI and told that the reason was he is a resident of Japan and they have to report all such persons to Japan. He was turned away by FIs in various EU countries and the US.
“All that being said, these are vastly greater issues than I have the time or energy or frankly expertise to debate. I think what we can best focus on here is fighting two things: (a) the designation of all US citizens as US tax residents, and (b) the imposition of US reporting requirements on non-resident US persons. That’s more than enough to keep us all busy.”
And that is why were are here. Not enough people have taken the time to think through where this chain reaction goes.
“RO is engaging in the same behavior that brought CBT, FATCA, FBAR, etc. “Let’s tax those other people to compensate, they are far away and not represented.” I’m not going to support this farce.”
So I am not the only one who read it this way.
Heitor David Pinto comments brings me back to my first question in this thread on this subject
“Everything looks to be a right mess now but not sure what taxing the US assets of foreigners after death as to do with TTFI. ”
it has absolutely nothing at all to do with TTFI.
@Nononymous:
“Our only issue should be with FATCA applied to non-residents – US expats who’ve made their lives elsewhere, dual citizens, accidentals. Which is a consequence of CBT of course.”
Exactly. This is why TTFI, the repeal of FATCA, and other chimeras are all plaster on a wooden leg compared to simple RBT.
@Norman Diamond
Going back to my earlier point if courts deciding what this means, you said that the court gave two different definitions of one thing in the same decision. Did either of those definitions help you?
The RO Facebook page is pointing out an amendment offered by Sen. Heller to the current tax bill. They are claiming that this amendment is related to TTFI, though it is impossible to say from the brief description in the amendment list.
Apparently the amendment will “clarify the tax treatment of certain individuals”, with another to “clarify the tax treatment of certain foreign income”.
Of course, it might just be clarifying that if you are overseas then the US thinks they have you over a barrel and feels entitled to all of your money. Not clear yet.
james_williams@hatch.senate.gov
victor_fleischer@wyden.senate.gov
Charles_cogar@scott.senate.gov
Emily_lavery@scott.senate.gov
victoria_glover@heller.senate.gov
Following this thread as best I can. Am most interested in Sen. Heller’s amendment as the possible “help” we’re watching for. Meanwhile, I’ve managed to peck out a new posting about the UN Complaint which I will post at my first opportunity if the “help” is not adopted into the bill.
Jak Dac,
Thanks.
@Nononymous I disagree. Try being a Venezuelan now and needing to create a nest egg in say Columbia or elsewhere to enable your family to escape persecution with something to start a new life elsewhere. Try being a Jew in 1930s Germany. Try being a North Korean. Enough to make the point?
Try needing to create a private trust to care for an out of wedlock child? and its mother?
Try needing a place to invest an estate to grow for succeeding generations in a private trust with minimum loss to “friction” such as that caused by taxation.
Try being an Insurance Company and needing to invest Premium income in a fund to grow to cover potential liabilities with minimum loss due to taxation and other bureaucracy. Or a Hedge Fund that needs similarly to minimize costs.
The need for low and no tax locations is both legitimate and protective of honest people and honest endeavors.
None of this will deal with a dishonest person residing in a high tax country sneaking unreported income out of their country to hide elsewhere. Often that elsewhere is the United States itself.
@nervousinvestor
Leaving historical/political examples aside, I think we are confusing needs and wants here. Does anyone *need* a “place to invest an estate to grow for succeeding generations in a private trust with minimum loss to ‘friction’ such as that caused by taxation”? Many of us might want that, but I don’t think we really need it.
You’re absolutely correct that the US is the huge tax haven, of course.
House tax bill floor vote:
https://www.cbsnews.com/news/house-to-vote-on-tax-bill-thursday/
Senate tax bill:
“Finance Chairman Orrin Hatch (R-Utah) is expected to release a new version of the Senate tax bill as soon as Tuesday afternoon.”
https://www.politico.com/story/2017/11/14/senate-gop-obamacare-mandate-repeal-to-tax-bill-244891
No word on the text of the TTFI amendments.
Reminds me of this famous legislative quote:
Pelosi: “We Have to Pass the Bill So That You Can Find Out What Is In It”
https://www.youtube.com/watch?v=hV-05TLiiLU
Or, with this be done FATCA style, tucked in with most unaware. This works for me.