The US is all about having total world control. The FACTA is merely the largest extension of this scheme to date. US citizens who live abroad are still required to file US tax returns even though they receive no real benefit from any US Government services. The US Government’s true desire is to have leverage over the maximum number of people, companies, and whole countries that they possibly can. I think this fact alone explains the $450 renunciation fee. They simply don’t want to lose control over people. It’s not really about taxes because tax revenue from expats is somewhat low. They want to keep the connection and leverage so that one day, if they so wish, they can impose their will on the US Citizen or anyone else connected to this person. This “will” could come in the most common form which is extorting money, or in some cases, it may be political, or they could force people to spy on foreign companies and governments or whatever task they see fit. As long as someone is a citizen, or a company has US assets, they are a potential resource.
So what is the benefit of leverage and control? Probably the easiest way to illustrate this is with international companies. The FACTA creates an environment where financial institutions around the world have to report to the IRS, so the IRS/U.S. Government is in total control and can levy (extort) whatever penalty they so desire. Additionally, the FACTA amounts to nothing more than blackmail to obtain even more leverage: either an institution signs on to the new system, which the US Government controls, or faces a withholding tax of 30% on US assets. A very similar environment of US total control already exists for companies listed on the US stock exchanges, or have a business presence in America. UBS, the large Swiss bank, has a large business presence in America, so when they got caught helping US Residents hide money in Swiss Bank Accounts, they paid the hefty penalty. I agree that UBS made a mistake because they did help tax frauds who are American Residents, but the pace of company fines is quickening and where are the checks and balances to ensure this system isn’t being abused? And when should US law apply to cases overseas?
The recent bribery case involving Deutsche Telekom and the US is quite interesting. The most surprising feature about this is that it has nothing to do with US Citizens, US Residents, The US, or anything related to the US. The alleged infractions occurred in Europe and may or may not be illegal according to local laws, but they were fined by the USA to the tune of $95 million dollars. So how can this happen? After all, this didn’t happen in US Jurisdiction? The reason is that Deutche Telekom trades on the New York Stock Exchange where the US has it’s hook and leverage. In my view, this was a quick and easy money grab from a foreign company. If money were not the issue, the Department of Justice (DOJ) could have easily turned the case over to European Union officials to prosecute in the jurisdiction where the alleged infractions had occurred. I see this as just another example of US exerting extraterritorial powers and laws on people and businesses for the sake of exhorting money. The whole story can be found here
Who knows where the tipping point will be for foreign companies who have dealings with the US. There has to come a time when foreign companies agree that it just isn’t worth it to have any ties to the US whatsoever. For US Citizens abroad, the best way is just to pay the $450 and renounce and be done with it, thereby denying the US leverage over you, your family, and any business associates. It’s a small price to pay for freedom that I’m afraid won’t be around much longer if this wave of renunciations keeps increasing. I can easily picture the US disallowing renunciation if they feel that they are losing too much leverage overseas. I really don’t want to wait around long enough to see this happen.
Renunciation is the only REAL way for U.S. citizens to register their disfavor with the government that purports to represent them. There is no effective way for the taxed individual to use the ballot as a tool to bring about governmental awareness because many expats cannot vote and even if you can the problem is that an expat’s vote is viewed the same as a local absentee vote.
It would be a morally wrong for the U.S. to cut its citizens off from this one effective way of making their views known. Unfortunately it is more than likely that the U.S. would take this iron fisted route rather than repeal an unjust law.
Like the former Soviet Union, the U.S. is a country that is really hard to leave.
SW121.. This notion of leverage and control is very true. Why do they make it so hard to leave?
Sadly, they are never going to abandon this tactic. It has work too well for them until now. We can hope and wait all we want to for residence-based taxation and for a different distinction between resident and non-resident Americans, but this is NEVER GOING TO HAPPEN. The only way is to renounce.
For businesses, their only way to never run the risk of having American laws applied worldwide is to dump all US assets and leave, or exit the US market.
The US passed a law a while back that makes it illegal for an American citizen to break ANY American law overseas. Google it and you’ll find it.
Complete and absolute control….
Hi, you can put links in comments. That’s in the rules. I’d be interested if you could show us that.
As the laws of the United States become more voluminous, because Congress irresponsibly continues to pass legislation that they don’t have time to read, such a law becomes ridiculous.
I would add too that Conrad Black is in jail for moving boxes out of his office in Ontario. It was caught on videotape (i.e., there is absolute proof that he did it).
Sure. I’ll try to find the link. Hopefully, I can clean up my bookmarks this weekend. But here are a few:
1) US Securities law – This applies to citizens and non-citizens.
2) Here are the main laws that if an American “citizen” breaks, he/she could end up in jail in America. There is actually a lot of stuff here that probably many people have no clue about, especially with boycott laws, hiring practices and discrimnation, corrupt practices, etc. There are many activities that could easily fall within these laws, like exporting encryption technology. I’m not quite sure if the Deutsche Telekom case fell under “corrupt practices” or US Securities law, but it appears as though both were applied extraterritorily and the hook was DT being listed on the stock exchange. I’ve also seen a few high-profile cases of Brazilian politicians getting nabbed under “corrupt practices” as well, even though everything happens in Brazil.
3) Here’s one of the most recent, talking about the FACTA and the new drug law. Yeah, an American in Amsterdam who goes to the coffee house to use pot could be prosecuted under American law.
4) Notice in the comments section about “prosecution for buying pirated goods” – amazing. How are you going to know if it’s pirated or not? Sometimes it’s impossible to tell.
5) It’s also illegal for a US Citizen to pay for sex with anybody under the age of 18, even though age of consent laws may be much lower in the country where you are at. I have seen a few anecdotal cases of people almost hopping in bed with people who are 17. This was set up to stop sex tourism, but like all laws, usually have unintended consequences and ample room for abuse, especially with the US policy of “destroy the alleged perpetrators and ask questions later”. I can tell you that US Military was 18, across the board.
** The point that I’m trying to make is that the the US is a real beast; the country has to infringe more on your personal liberties more than any other country I know of. Moreover, the US citizenship is like a heavy ball-and-chain: even if you open a business in a foreign country, you have to follow US rules, which seem to change all the time. You can never permanently break away from America until you have absolutely no connection there, whatsoever. **
“Corrupt practices” is probably the most impractical and short-sighted law for American business. The reason is that in some places, you can stone cold FORGET getting permits and licenses without paying a “fee” on the side.
I think it’s pretty safe to say with no justification with links that there is no way to for mid-large businesses in almost all of South America (and most parts of the world) to conduct business without ever paying “fees”. The politicians and bureaucrats just expect it. Nobody, not even the US, will be able to stamp out corruption,
What’s even worse about the US’s prosecution of corruption is HOW the US bribes countries (through foreign aid) and even paid a few (probably many more than a few) tribal chiefs in Iraq and Afganistan. That, in itself, is a bribe, plain and simple, no way around it.
The US doesn’t want its citizens to renounce because it needs to keep its slaves on the debt plantation.
You clearly understand the reality of the monster that the USG has become. Unfortunately most Americans living inside the US are completely ignorant about the behavior of their government abroad. But then again, many have no idea about the continuous loss of their own liberty at home.
Thanks for your insight.
“many have no idea about the continuous loss of their own liberty at home.” Hence your alias, “boiled frog”. Nice.
Boiled Frog, thanks for the comment.
I left America because I didn’t like the police state that the US had turned into after 9/11. I went overseas and see they still exert control over me. You’re right about many Americans overseas. I’ve had people admit the absurdidity of the rules to my face, but they just stick their head in the sand. To me, this is like waching your house catch fire and just watching it burn down, not doing anything.
To make matters worse, most people aren’t aware of the “other” rules I listed above. That list is INCOMPLETE, so I’m sure there are even scarier laws people don’t know about. I’ll try to find some more.
Another thing that Americans “just can’t figure out” is that the US is corrupt as hell. I live in a country that is in the top 10 list of corrupt countries ever year– they say. Just living in a corrupt place has improved my ability to spot corruption, and the US is full of legislated corruption. How do their politicians amass such wealth? Why do they seem to always pass laws outlawing competition in any form, especially if it comes from overseas? I can’t believe Americans are blind to this, but apparently they are.
I just want to cut any possible connection I have to that place! I live in a country that doesn’t try to oust democratically elected “dictators”, invade other countries, or try to “build” nations, or control their citizens overseas. I’m perfectly happy where I’m at.
You are right about corruption in America. The corruption became worse when Chicago politics entered the White House: Solyndra, e.g. Now MF Global (you too can steal a billion dollars, buy real estate in France, and not go to jail). But it’s been there for a long time with members of Congress getting rich– and they wanted to put poor Martha Stewart in prison for (allegedly) doing what they do.
I too live in a country that is labeled as being highly corrupt. However, the people here are able to see it because the country is small and we are therefore able to throw politicians out of office whenever they get caught with their hands in the cookie jar, which happens quite often.
The problem with the US is that it is a very large country and government is too far away from the ordinary person for individuals to be able to see the corruption. Moreover, corruption in the US is highly sophisticated, deeply entrenched and even legalized, just look at the Federal Reserve System and the Military Industrial Complex for a start.
Unfortunately, most people in America still believe in the myth of freedom. They are like frogs in pots of water slowly being boiled to death.
I renounced US citizenship a few months ago. I had been hoping for change for a long time but eventually came to the conclusion that the US is on a trajectory of all other previous empires, the larger they become, the meaner they get. Time to cut it loose.
“Nobody is more enslaved than those who falsely believe they are free.” — Goethe
good comment. You should write your story on here….
Very interesting, geeeez. I think the US gov may be overestimating their reach. I worked for a French company here that put in a good faith effort to comply with SARBOX in order to remain on the US stock market. After a few years, and many sunk costs, they gave it up. It just wasn’t worth it and today that company is doing quite nicely and is traded on the EU stock exchanges.
As much as people bash the EU (I personally quite admire it) it is an alternative. In coming years I think Asia will be another. This may be a case where the US is desperately trying to write the rules now because they have some doubt about being able to do so in the future.
Thanks for the comment Victoria. Actually, I read something somewhere that the NYSE and a couple of European exchanges merged, so the US would still have a hook (I need to verify this though). Trust me, the US interferes everywhere it possible can.
Back to over-estimating reach: I think the US is doing this simply to maintain dominance and avoid a total meltdown in the dollar and in their position and power. I was reading yesterday someone comparing US debt levels to post-WWI Germany. The similarities are quite similar, especially with politicians abusing their power and leading the country into a mountain of debt, thereby breaking the country.
But back then, the peg was gold. Today the official peg is the dollar, whether a country says it is peg or not. After all, all of the world’s commodities are priced in US Dollars. And it’s *no conspiracy* that if a country tries to price commodities in other currencies, the US blows up their country or tries to oust the democratically elected “dictator”. There’s too many examples in the last 10 years to prove this.
So for everyone that declares “the end of the American Empire” I doubt it. The reason is that the US has far much more control nowadays over the entire world than ANY empire had in the past. I could be wrong, but I think they will last as long as they are able to maintain this control. This is why I don’t really want to “wait” to renounce, because I know it’s only going to get worse.
Check out renunciationguide.com if you haven’t done so already. Its very informative about how to navigate through the renunciation process, which is not as complicated as it first appears.
I also agree with your opinion that the primary objective is to establish financial control over the entire world. One of the first things the US does whenever it invades a country is to set up a new central bank. You may want to have a look at thedailybell.com. They cover this topic in depth.
I’ve seen the guide. It’s pretty good. I’ve already gone for my first appointment. I”m waiting on the FBI document from the US to enter in with citizenship here. Then after that, bye-bye US Citizeneship. I would like to be FREE of US citizenship now, but I don’t want to confuse the beaurocrats here by telling them I have no nationality when I enter in with the petition to naturalize here.
Took me 9 months to get the FBI doc in order to acquire new citizenship. Like Hotel California, Its harder to get out than it is to get in.