Reposted from the Renounce US Citizenship blog
This post was written in December 2014. It is being reposted in 2018 – the question is why
FATCA and the CRS (“Common Reporting Standard”) are mandatory information sharing schemes. They first define people in terms of their “tax residency” (each country defines who its tax residents are) and then shares people’s private information based on that “tax residency”. In other words (assuming you believe that there is a legitimate interest in privacy) both FATCA and the CRS should be viewed as “privacy overrides”.
Although the notion of privacy is dead in the United States (companies like Facebook and Google make a living off obtaining and using private information), the European GDPR suggests that privacy is valued by Europeans and that individuals should have some control over their data. In Europe the GDPR reflects a presumption that individual belongs to the individual. There is no such presumption in the United States. See:
31-year-old Austrian lawyer Max Schrems was the catalyst for new privacy protection regulations in Europe. He says your data belongs to you and you should have control over it. pic.twitter.com/OTV0reXDOg
— 60 Minutes (@60Minutes) November 12, 2018
Automatic exchange of tax information and data privacy
The potential conflict between the automatic exchange of information under the CRS and privacy rights under the GDPR has not gone unnoticed and has been the subject of academic commentary. It has also led to citizens proactively asserting their privacy rights as reflected in the following article which includes:
“In a democratic society, the rights to privacy and data protection are an essential safeguard to protect compliant citizens against potential abuses and must be treated with the appropriate seriousness by the authorities.”
When privacy rights as legislated by the GDPR conflict with the erosion of privacy as madated by the CRS and #FATCA: "Mishcon de Reya complains about anti-tax evasion measures" https://t.co/wL3as7dcZF
— U.S. Citizen Abroad (@USCitizenAbroad) December 9, 2018
The awareness of the collection of and misuse of personal data is becoming more and more prevalent.
Now back to my thoughts in December of 2014.
Brandeis: the "right to be let alone" = "the most comprehensive of rights, + the right most valued by civilized men." http://t.co/pbWxJIE4iV
— U.S. Citizen Abroad (@USCitizenAbroad) December 27, 2014
An attack on privacy is an an attack on freedom itself.
I have previously posted on the theme of – “From Facebook To FATCA” . My theory has been that FATCA (which is an erosion of freedom) is possible only in a world that does NOT value privacy. The erosion of privacy NECESSARILY LEADS to the erosion of freedom.
An earlier post describing the relationship between FATCA and freedom included:
The argument over FATCA is NOT really about taxes. The argument is over whether individuals should be allowed to have freedom and privacy.
The U.S. government wants to abolish privacy and freedom.
Some countries and individuals want to preserve freedom (at least as long as possible.)
Question: How did the values of “freedom” and “privacy” disintegrate? Why are so many people unconcerned about the the loss of privacy? Makes no mistake about it, “privacy” and “freedom” are linked.
I speculate that the world of social media has paved the way for this. People now think nothing of having their life visible to all on Facebook, Twitter and the rest. If there is no personal privacy, and financial privacy is part of personal privacy, then …
Privacy and freedom are linked in all aspects of life. The links include: Financial aspects, Spiritual aspects, Family aspects and really ALL aspects.
Financial aspects: In a previous post, it was reported that Charles W. Adams in his book: “For Good And Evil – The Impact of Taxes On The Course Of Civilization” – describing 27 lessons from the history of taxation included:
11. If liberty is to be defended with success against the dominance of the state, then financial privacy must be preserved. Banking privacy is one the cornerstones of liberty, having its roots in the principle of early English Law that a man’s castle (primarily his treasury) is beyond he surveillance of the king.
Family aspects: No matter what you think of the U.S. Supreme Court decision in Roe v. Wade, Justice Blackmun, in ruling that the Government could not prohibit abortions, Justice Blackmun recognized a constitutional right of privacy.
Few decisions are more personal and intimate, more properly private, or more basic to individual dignity and autonomy, than a woman’s decision – with the guidance of her physician and within the limits specified in Roe – whether to end her pregnancy. A woman’s right to make that choice freely is fundamental…
(Note that some do NOT agree with the idea that the U.S. constitution guarantees any right of privacy.) In a world of FATCA, FBAR, Obama, NSA, etc., the question of whether there is a constitutional right to privacy is a question of profound importance.)
Spiritual aspects: The United States was largely founded by people seeking the freedom to engage in religious activities of their choice. Even today “freedom of religion” is recognized as an important part of American society.
Privacy certainly matters to individuals. Privacy matters to societies. Privacy matters to democracies.
The advent of social media and the erosion of privacy:
More and more of people’s lives have been subject to scrutiny. In fact, those who value privacy are frequently regarded with suspicion. The erosion of privacy was purported to have been justified by the events of 911. The “Patriot Act” required people to “give up” more and more of their privacy in exchange for … (what)?
Leading us directly to the Edward Snowden’s revelations about NSA spying
Sweden gives #Snowden human rights award & standing ovation http://t.co/nsk89v5v9Y Yet will spy on @USCitizenAbroad 4 #FATCA. Hypocrisy
— Lynne Swanson (@LynneBlaze) December 27, 2014
I highly recommend you read Glen Greenwald`s book “No Place To Hide“. Mr. Greenwald was the journalist who was contacted by Ed Snowden. He traveled to Hong Kong to interview him. Mr. Greenwald places the Snowden revelations in the proper context. The most interesting chapter is Chaper 4: “The Harm of Surveillance”. The theme of the chapter is about the rise of the “Surveillance State” and the corresponding loss of privacy. It’s a fascinating description of how the “Surveillance State” (which includes government-motivated “whistleblowers“) both affects and changes the “human condition”.
To repeat: The “surveillance state” changes the human condition. An earlier post on this blog – “The Lives of Others: The True Significance of Bradley Birkenfeld” included:
It’s clear that if approached by the Stasi, one had little choice but to cooperate.
What does this have to do with Bradley Birkenfeld, the IRS and the 104 million payout? Well, at a minimum it means that the IRS will reward, people who report on the activities of others. The proof is that they are willing to pay. They even call them “whistle blowers”. As Sovereign Man points out, this surely will provide incentives to people to spy on each other. What does this mean about the future of American Society? Amazingly, I came across a brilliant analysis which begins as follows:
In 1787, philosopher and economist Jeremy Bentham proposed a new plan for a jail that would allow a very few officials to continuously monitor the inmates. He called his plan the panopticon.
“The essence of it consists, then, in the centrality of the inspector’s situation, combined with the well-known and most effectual contrivances for seeing without being seen,” he wrote in describing his plan. Under the plan, because the inspector — i.e., the jailer — could see without being seen, the inmates could never know whether they were being watched or not. As a result, they had to assume that they were under complete surveillance at all times, with the hoped-for result being that they would modify their behavior accordingly.
I commend the complete article to you.
And now back to Mr. Greenwald …
(For the transcript of a fascinating speech given by Mr. Greenwald on the “Surveillance State” – read this.) A need for “privacy” is part of what it means to be “human”. Therefore, governments that erode “privacy” erode “humanness”. Mr. Greenwald’s book is a must read. (In addition, I highly highly recommend you see the movie “CitizenFour” which is a documentary about the Snowden revelations. Incredibly, the makers of “CitizenFour” are now being sued – go figure.)
Mr. Greenwald writes (at the end of Chapter 4):
Forgoing privacy in a quest for absolute safety is as harmful to a healthy psyche and life of an individual as it is to a healthy political culture. For the individual, safety first, means a life of paralysis and fear, never entering a car or airplane, never engaging in an activity that entails risk, never weighing quality of life over quantity, and paying any price to avoid danger.
Fear mongering is a favorite tactic by authorities precisely because fear so persuasively rationalizes an expansion of power and curtailment of rights. Since the beginning of the War On Terror, Americans have frequently been told that they must relinquish their core political rights if they are to have any hope of avoiding catastrophe.
(The very first post on this blog (October 20, 2011) described how the “fear mongering” caused by the “war on terror”, has led to the erosion of freedom.)
Brandeis – “The Right To Privacy” – Privacy and the human condition
In Chapter 4, Mr. Greenwald described an essay written in 1890 by Louis Brandeis (of Supreme Court Justice fame) and Samuel Warren. The essay is titled: “The Right To Privacy“. Think of it. The essay was written in 1890 which was almost 100 years before the “assault” on privacy began in earnest. It was almost 100 years before the “price to participate in the digital age” was the “loss of any expectation of privacy”. Yet, Justice Brandeis was was writing about “privacy” and the importance of privacy in the human condition. In 2014 his 1890 essay was referenced and discussed by Glen Greenwald in “No Place To Hide”.
The Brandeis essay includes:
We must therefore conclude that the rights, so protected, whatever their exact nature, are not rights arising from contract or from special trust, but are rights as against the world ; and, as above stated, the principle which has been applied to protect these rights is in reality not the principle of private property, unless that word be used in an extended and unusual sense. The principle which protects personal writings and any other productions of the intellect of or the emotions, is the right to privacy, and the law has no new principle to formulate when it extends this protection to the personal appearance, sayings, acts, and to personal relation, domestic or otherwise.40
You will find the complete essay (written in 1890) here. Justice Brandeis was identifying and articulating an important interest that is at the heart of the debate today.
An attack on privacy is an attack on freedom itself.
Reagan reminds us that: "Freedom is never more than one generation from extinction" https://t.co/RCc2rlkDZm
— U.S. Citizen Abroad (@USCitizenAbroad) December 27, 2014
John Adams reminded us that:
“Liberty, once lost, is lost forever“
“A Constitution once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.” ― John Adams https://t.co/iaCtY5qsuI
— U.S. Citizen Abroad (@USCitizenAbroad) December 27, 2014
While thinking about this issue, I discovered a bit of interesting (maybe) trivia. The 1967 case of Afroyim v. Rusk is playing a major role in the life of “Americans abroad”. (This is the Supreme Court decision that establishes that Congress cannot simple “strip people of U.S. citizenship” without their consent. I wrote about the possible impact of Afroyim on the treatment of Americans abroad in an earlier post. There is a strong consensus that Americans abroad are being forced to renounce their citizenship. Yet, in Afroyim, Justice Black reminds us that:
Citizenship is no light trifle 268*268 to be jeopardized any moment Congress decides to do so under the name of one of its general or implied grants of power. In some instances, loss of citizenship can mean that a man is left without the protection of citizenship in any country in the world—as a man without a country. Citizenship in this Nation is a part of a co-operative affair. Its citizenry is the country and the country is its citizenry. The very nature of our free government makes it completely incongruous to have a rule of law under which a group of citizens temporarily in office can deprive another group of citizens of their citizenship. We hold that the Fourteenth Amendment was designed to, and does, protect every citizen of this Nation against a congressional forcible destruction of his citizenship, whatever his creed, color, or race. Our holding does no more than to give to this citizen that which is his own, a constitutional right to remain a citizen in a free country unless he voluntarily relinquishes that citizenship.
As of late there there has been some discussion of a legal challenge to citizenship-based taxation (or at least aspects of it) by using the 14th amendment arguments. I suggest that the above quote from Justice Black’s decision should be a leading part of that challenge.
The argument would be:
1. Maybe citizenship-based taxation is NOT unconstitutional per se; but
2. The rules that U.S. government is imposing (under the guise of citizenship-based taxation) are forcing people to renounce U.S. citizenship and are therefore unconstitutional.
The lawyer representing Afroyim (at least in the early stages was Nanette Dembitz. Nanette Dembitz was a niece of Justice Louis Brandeis. Interestingly the impact of Justice Brandeis and people like Nanette Dembitz – who recognized the importance of the individual – carry on today.
Last I checked, FBAR had huge fines for not filing.
Yes. If you can find a court case in which a non-US-resident individual with US citizenship who doesn’t file US tax returns and has never volunteered for an IRS “voluntary disclosure” scheme has been assessed for a penalty for failing to report his/her same-country bank account to America, please post a link.
That is part of what FATCA is for, to catch such people. Too early yet.
So, does this mean Model 2 IGA countries are hunky-dory and nothing needs to be done about them?
“does this mean Model 2 IGA countries are hunky-dory and nothing needs to be done about them?”
Petlover, is your question addressed to me?
If yes, can you clarify? What is the “this” you refer to?
Renounce and be done with the horrific US empire. Realise it’s a whopping 2350$!!! and of course, tons of us empire paperwork, but….freedom from that hell hole.
america was a psychological and financial prison of the propagandised and the brain washed.
By “this“ I am referring to the discussion in the thread of ECJ possibly declaring the IGAs, the Model 1, invalid. So what about the model 2 in that case? Model 2 is acceptable?
The case is being brought in France, which signed and implemented a Model 1 IGA. It will be heard in a French court initially, as I understand it. If unsuccessful there, the plaintiff(s) will have the right (as I understand) to take it to a higher court, possibly culminating at the ECJ.
Whether an ECJ ruling on the IGA 1 agreement would also apply to IGA 2 agreements, I have no idea.
I somehow doubt that any decision made about the IGA 1 would include the 2. I think only one EU nation signed a 2, and, of course, that’s where I am. Unfortunately there is an insignificant long-term US expat population to stand up against the IGA 2, so it will most likely never be overturned unless the EU calls for its members to unilaterally reject any and all IGAs.
Unfortunately, the EU Commission already (twice) asked the Council to agree to let the Commission negotiate an EU-wide FATCA agreement. The Council refused, and the Commission has no power to negotiate on the matter without the Council’s agreement, because tax is a national competency.
Not that there seems to be much reason to think an agreement negotiated by the Commission would be any less oppressive for USCs.
Perhaps an agreement negotiated by the commission in the aftermath of an ECJ ruling might improve conditions for USCs residing in Europe.
Guess it’s just a matter of waiting and watching…
I may be wrong but I don’t think that that’s a possible outcome.
If the case gets to the ECJ and the ECJ rules that the agreement breaches EU rights, each Member State will have to take action to stop breaching EU rules, as I understand it. I should imagine it would be up to the individual Member State to decide what action to take to avoid breaching EU rights. For instance, if the ECJ were to rule that the birthplace dragnet constitutes discrimination, they might negotiate with the US to modify the due diligence specification. That’s the change I hope to see.
“Guess it’s just a matter of waiting and watching…”