— U.S. Citizen Abroad (@USCitizenAbroad) October 15, 2014
According to Allison Christians of McGill University Faculty of Law, the problems addressed by the conference’s panel on international taxation are not much different from those faced by four academics more than 90 years ago when asked by the League of Nations to study the question of how to share the world’s income tax base. Christians said the crucial issue now is the failure to tax income as opposed to double taxation, which worried policymakers then.
“If you gave international tax a grade over 90 years, it would be an F,” Christians said.
“We will not take fairness seriously on the international stage.”
Christians said that powerful countries too often end up calling the shots, much to the detriment of a fair and orderly international tax system. “When we turn to power, we sacrifice both efficiency and equity . . . and administrability as well,” she said.
Christians was especially critical of the U.S. for using the Foreign Account Tax Compliance Act to expose underpayment of U.S. personal income taxes while cautioning that the OECD’s base erosion and profit-shifting initiative could negatively affect U.S. multinationals.
“FATCA leverages U.S. control over the global financial system, thereby forcing the populations and governments of poorer countries to direct precious tax administration and regulatory compliance resources toward the enforcement of the U.S. tax system over their own,” Christians said. “Yet the U.S. has not used this same leverage to respond to base erosion. U.S. lawmakers have not seen as great a good in stopping tax avoidance by U.S.-based corporations as they have in stopping tax evasion by U.S. individuals.”
Speaking of Allison Christians, read her thoughts on Mr. FBAR:
— U.S. Citizen Abroad (@USCitizenAbroad) October 14, 2014
You can download the paper here.
Some persuasive arguments:
The Foreign Bank Account Report, or FBAR, is part of a regime designed to stop
terrorists, money-launderers, and tax evaders. Unfortunately, its increasingly
draconian requirements and consequences now apply to millions of innocent
bystanders who are collateral damage in the ongoing battle against financial
crime. Their inclusion in the FBAR regime is a massive waste of both government
and taxpayer resources, effectively criminalizing activities that are wholly
unconnected to financial crime, and perversely discouraging compliance. All of this
is unnecessary because as the administrator of FBAR, Treasury can immediately fix