Check it out – Canada has determined that many US nationals are going to try and attempt to move illegally to Canada after the US election. One Canadian police officer joked that there weren’t enough places for 47% of the US in Canada, but has Canada also possibly considered this decision based on financial consequences of allowing so many bound by citizenship-based taxation to migrate? Closing the flood gates before the FATCA deadline perhaps?
http://www.newyorker.com/online/blogs/borowitzreport/2012/10/canada-tightens-border.html
Here is an idea that Canada should consider.
You realize that’s a joke story right? Haha, I hope I’m the thick one who doesn’t get that you guys know it’s a joke you know? This is a line from the story “warning to Americans who might try to cross into Canada illegally: “If you drive a Prius, you will be stopped.”” (-:
@WhoaitsSteve
Yes, I think everybody realizes its intended be a joke.The trouble is that things are so bad, that it takes a little longer to realize it’s a joke.
Well, if they make it through the frozen tundra, polar bear attacks and Dudley Do-right, they’ll forever have something to remember their beloved past president by: citizenship based taxation, the gift that keeps on giving.
Canada, America’s battered voters shelter.
@Renounce haha ok, I wasn’t sure. I’m sure you guys know because you’re pretty up on American culture, every election the left leaning people usually the very left make quips about how if the (R) candidate gets in they’re shipping off to Canada, the article is a tongue-in-cheek response, especially the line about Priuses (Priuii?)
@whoaIt’sSteve
Does that mean they’d move back again if their party was reelected in a later election? Talk about a bunch of whiners!
Steve, two days ago, a Brazilian city (Palmas-TO) elected the country’s first FOREIGN-born mayor, a natural-born Colombian, a naturalised citizen here, but still [obviously] treated as a foreigner because he speaks Portuguese with a Spanish accent.) We are always associated with where we are BORN, especially if we speak different languages with accents.
It’s a shame that I have to *reject* the nationality from where I was born just to be able to have access to bank accounts in other countries. When I was describing this situation to 2 people here today, they couldn’t believe it. But this is the sad truth… I can’t find anyone who thinks this FATCA is a good idea.
If the US wants better domestic enforcement, the best thing to do is search for alternative solutions. If they’re worried about losing revenue, then program better systems to catch someone who is lying on their domestic tax returns (i.e., cross reference rental income with rental payments). I just feel like people like us, on this site, are caught in the crossfire between revenue demands -vs- real tax evaders. Yet we are in different countries and outside of the scope of the entire argument!
I’m not playing the very small violin on your shoulder (complaining) — I just wish that some US resident-citizens would see this, and the absurdity of some US laws!!
Borowitz is a hoot and good at poking fun at both left and right. I always read his commentary that he posts in a semi-official press release matter. He is better than “The Onion” for satire. If you are not familiar with him, you might enjoy this story he told at Moth back in 2011. For anyone who has had an unexpected Medical crisis, this might resonant while amusing at the same time.
Thanks for the video, Just Me. Borowitz found funny in the worst. It’s all true about appreciating life and all you have after something like Borowitz has been through. For many, an ileostomy is permanent and is a true change for better quality of life and appreciation for all you have (even when going through this IRS ‘bag of s***’).
@Geez
Imagine that there are only 1000 homeland tax evaders. Imagine that on average, their evasion results in a loss of 100,000 USD per year per evader in tax income. So, that’s 100m pa in lost tax revenue from this group of whales.
Let’s say that the cost to the USA to catch these evaders overseas is 150m pa. Then, enforcing makes no financial sense. However, if you can capture another 50+m from the minnows, then the whole scheme makes financial sense. So, the taxes and penalties that we pay are used to build our own prison…
This is a shallow perspective by itself. That prison is constructed for all Americans. It is imprisoning their capital, because the real concern is capital flight and that’s a justified concern the way that the US is printing money and incurring debt.
*geeez, As I understand it, while America’s political clowns are blowing away billions for nothing in places like Afghanistan, Iraq, Israel, Egypt, etc., they are pressuring the world to fork out $500bn with annual running costs around $10bn, since they assume that they can squeeze $10bn in 10 years out of American expats. It’s mad. America has gone insane. This will likely cause the end of the free checking account. Discrimination based on national origin is a federal crime, and yet America enjoys being criminal against its citizens abroad so that it can blow away trillions in places like Afghanistan, Iraq, Israel, Egypt.
All America needs to do is to stop being anti-Semite against Palestinian Semites and then it will save $30 billion which would otherwise be wasted on financing national origin discrimination (a US federal crime). Why is it that America’s political clowns would rather discriminate against Americans abroad than to save billions by not discriminating against hated Semites in Palestine? America is choosing to bankrupt itself and oppose its citizens in order to violate its own federal laws. What this shows is that crime always defeats itself, eventually.
@Steve, I thought it was serious. I’ve had a guy tell me that I’m stupid because I’m from Alaska–I must have brain-freeze (i.e., how could so many people in Alaska support Sarah Palin). On another occasion, after I told a woman that I was from AK, she said that if Sarah Palin won the 2012 election, that she would move to Canada. I told her it’s actually another country and that it is not that easy to immigrate to Canada. I just simply supposed that there were a lot of people who say they will move to Canada if the wrong person gets elected. A lot of NPR people have probably idealized socialist Canada (we have “health” care in Canada). So they constantly claim that they want to move here (remember Alec Baldwin?). It would only be small policy shift for Canada to say that they were on heightened alert. The last thing we need is a bunch of democrats from the US sucking the Canadian government teat, and the governments know it. We can’t even afford the burdens already on the system.
‘Eventually, Canadian immigration authorities may need to recognize that US persons seeking residence here have inherently divided loyalties forced upon them by US tax policies, therefore becoming potential liabilities to Canada. As a result, it may become necessary for the Canadian government to restrict US persons from seeking permanent residency and citizenship in Canada.’
@bubblebustin,
That would be tragic, but ‘restricting US persons from seeking permanent residency and citizenship in Canada’ might have to be the default if there can be no other protection from the US tapping financial resources of US Persons in Canada, robbing Canada of part of its wealth. The easier way, of course, would be or the US to change to resident-based taxation, which most think will not happen in the near term.
Wonder what that would look like for those of who have made Canada our home — and our country? Perhaps “dual” citizenship would have to go?
*@SwissPinoy:
“Why is it that America’s political clowns would rather discriminate against Americans abroad than to save billions by not discriminating against hated Semites in Palestine?”
No point in answering the substance of this since it shows an incomprehension of the American religious and political environment. Suffice to say that it is Republican Protestants who are in forefront of supporting Israel, and it has nothing to do with “discrimination”. There are dozens of books on the subject, some rubbish and some scholarly.
The correct point that is suggested by your and others’ postings is the connection being made, subtly for now, between and among tax enforcement, money-laundering and the “war on terror” (which, like the “war on drugs”, quickly became a cash cow for vested interests). $3 trillion spent so far on unfocused wars, and more coming if Romney gets his way on (yet more) assertion of American power abroad.
@calgary411:
“Perhaps “dual” citizenship would have to go?”
On the contrary. Dual nationality is a product of the end of nationality as “allegiance” (as in “Declaration of”), an English Common Law concept. (Compare the Muslim concept of the Immah and allegiance to a Muslim country as proxy for the Caliphate.) And of gender equality in matters of status: see the Cable Act of 1922 (“Married Women’s Independent Nationality Act”) and subsequent legislation in most of the Western world. Countries that disallow multiple nationality (generally and practically for persons over 18 only) do so for domestic political reasons: Estonia, Latvia, Lithuania. Or historical ones: Luxembourg before 2009; many Latin American countries and Turkey until recently: these countries liberalised their laws in order to have some political influence over their diasporas in the USA and elsewhere. There is no going back, except that the one exception to the evolution of “nationality” as bearer of rights and scarcely of obligations is the sticky U.S. taxation power. (Military draft used to be such an “obligation” but now we fight wars with mercenaries from among the rural poor and those who actually initiate the war have no obligation at all: neither taxes nor fighting.)
For the rest:
To the extent that Treasury and the IRS begin to equate tax evasion and nonreporting of assets to common fraud, money-laundering and other common-law (non-administrative-law) crimes not covered by the Lord Mansfield “rule”, it will be up to the US authorities to identify such persons. And hence dangerous for any US person abroad to renew a passport or otherwise assert a right or benefit of US nationality. Non-reporting penalties already can easily exceed 100% of assets, an argument that might be useful in opposing collection assistance to the USG.
Neither the ECJ nor the ECHR has asserted itself much in the realm of taxation. Two interesting European Human Rights cases do pose an obstacle to certain types of claim by the IRS on a theory of “transferee liability”: E.L., R.L. and J.O.–L. v. Switzerland, E.C.H.R. 75/1996/694/886, 1997-V at 1509; A.P., M.P. and T.P. v. Switzerland, E.C.H.R., 71/1996/690/882, 1997-V at 1477 (heirs could not be assessed tax penalties attributable to the deceased).
There are in any event clever ways to insulate inheritance from residual or estate tax claims. One of the more obvious ones is via life insurance although that can have untoward consequences of its own if there is a trust or interest element as opposed to pure insurance.
*punktlich11,because of FATCA, US persons are being denied financial services. This is national origin discrimination which is a federal crime in the US. Most of both democrats and republicans are supportive and defensive of Israel’s national origin discrimination in Palestine. So, America forces discrimination against America expats in order to finance discrimination against Semites in Palestine and this is only legal because it is outside of US jurisdiction.
If this US foreign policy was exercised within US jurisdiction, then it would be banned for being heavily illegal.
@Petros Really? I find you rather intelligent and poignant, I’d say far from “brain-freeze,” cute as a childish insult though. “They” haha make those idle threats every election that’s not a lock for the Democratic candidate, yet not surprisingly they never follow through, lol.
As for the difficulty to move I was under the impression that since NAFTA for a US citizen all you needed to do was get an offer of employment from a Canadian firm, and it works the same way in reverse for Canadians to the US. You get the offer of employment and it’s rubber stamped from there. Also @bubblebustin I think that would be extremely difficult to do without renegotiating NAFTA.
*@SwissPinoy
You have every right to believe what you say, but it makes no sense to any scholar of law or political science. For one thing, discrimination based on “national origin” is a specific term of art and it only applies in specific circumstances. One can and does discriminate on the basis of nationality (not the same thing as “national origin”) but (except for the office of President and in relation to security clearances) naturalised US citizens must be treated the same as native-born citizens. (Probably there are other exceptions but I can’t think of them now.)
It is worth adding what I have said in earlier posts: ex post facto laws are perfectly constitutional in relation to taxation. And nationality-based taxation is constitutional too, and needs to be addressed (if at all) by bilateral and multilateral treaties. There is too much written on this site that is naïve and uninformed, however aggrieved and well-meant.
If “Pinoy” relates to the Philippines, I can think of some interesting legal issues there that constitute discrimination. Let’s start with the Civil Law for Muslims: Muslims, and only Muslims, may divorce. Also the USA has a bad rep in Mindanao, but that’s another story.
Anyway, US nationals are not being denied financial services within US jurisdiction on the basis of their national origin. And abroad I can tell you as a matter of fact that in Switzerland at least dual EU/EEA/Swiss nationals who also are US persons but who reside in Switzerland are having no trouble doing business with any of the major banks. The private banks, especially Julius Baer and Wegelin, have other reasons for avoiding clients whom they know to be US persons.
But hey, I lived through the BCCI brouhaha. And nobody believed me when I said that bank was impossible. And the late James Ammerman, then treasury attaché at the Embassy in London, once told me he’d never heard of BCCI even though he must have passed a branch every day on the way to work. Banks are crazy, and so are their regulators and those who report to the regulators. Don’t blame the tax law or the IRS for that.
*@WhoaIt’sSteve
NAFTA is still in force and there is a specific list of qualifications for which admission is automatic. Somehow each and every time I have gone to Canada in recent years I’ve been sent for secondary inspection but I think that relates to my answering the question of profession when I tell them I’m a “journalist”. If I wished to live in Canada (I once worked there and receive a QPP pension as a result, but never actually resided there) I would go back to Québec, which has its own immigration regime, since I am French-speaking.
*punktlich11, I’m sure that most see it as you do, yet the US government explains discrimination based on national origin as:
Because of FATCA, I’m being denied “equal opportunity” because I am “from another country”. To me, this clearly defines FATCA as being a federal crime in the United States. I’m just reading what the US government wrote, yet I can understand that the US government may not follow its writings, especially outside of US jurisdiction.
I agree that there is discrimination in the Philippines, Switzerland and everywhere else. Yet, if the US government doesn’t want for FATCA to be illegal according to US law, then it needs to define national origin differently.
Duals can bank at UBS and Credit Suisse, but they may be forced to invest into a certain fund, pay higher banking fees and hire a CPA, thanks to FATCA’s national origin discrimination which is illegal according to US law. Several banks have confirmed my position that FATCA is discriminatory against US persons and I haven’t yet encountered anyone working for any bank who would support discrimination against US persons if FATCA didn’t exist.
*@SwissPinoy
No time to write a thorough reply, but let me say this: a State can discriminate against its own nationals even if not against others. European Union law (which comes to mind since it’s an area of my expertise) is clear on that. One must have exercised an EU right to claim certain immigration benefits.
“Certain funds”: that’s because of US tax law. The guy who has another nationality and who decides to ignore his/her US person status can probably get away with it. Forever, if s/he has no US assets or heirs and never visits.
*punktlich11
So is Canada in the “wrong” under international law when it claims Eritrea can’t tax citizens who live in Canada?
*@Tim
Re: Eritrea. I’m glad you asked that question. The Eritrean ‘diaspora tax’ is an oddity, but maybe not so odd if you think back to the pre-1999 Philippine income tax levied against its expatriate workers. The tax was abolished after the devaluation made it ridiculously exorbitant, but in fact most Filipinos I spoke to either never paid it or lied about their earnings. @SwissPinoy?
If Eritrea weren’t such a violator of human rights and such a Pariah State, maybe it would have got away with it. Ask Lea Brilmayer, professor of international law at the Yale Law School. She is, or was, a consultant to that hideous regime. It seems that the complaint against the tax is not that emigrants are made to pay, but that it is earmarked for funding armed groups abroad. http://erigazette.org/?p=305
As @SwissPinoy can attest, we all have our favourites, and one guy’s terrorist is another’s freedom fighter. He (or she) objects to funding Israel in prejudice to the Muslim and Christian Palestinians (and never mind that Christians and Jews have been chased out of the Muslim world since 1948 in a manner that Mohamed would not have wished and their property seized following the model of Vichy France; Iran being the main exception). But let me point out this: just as agricultural subsidies supposedly aimed at supporting the family farmer actually go to Industrial Agriculture (and last time I looked, which was a long time ago, Met Life was said to be the largest owner of farmland in North America), foreign aid actually goes to U.S. ‘consultants’ and arms manufacturers and other guys I would prefer not to meet at a diplomatic reception.
Then there is Italy and the EU http://www.nytimes.com/2012/10/08/world/europe/in-italy-calabria-is-drained-by-corruption.html?pagewanted=all&_r=0
But I digress. Sorry.
I intend to file a discrimination case if the bank demands to see my passport. Unfortunately, the method for filing discrimination does not mention that discrimination based upon nationality is reportable. I will continue to research as the time of QFI’s come nearer.
http://www.do.se/en/Discriminated-against/Other-areas-of-society/What-is-harassment/
By the way, offshore UK is now negotiating under the Intergovernment agreement (IGA) concept. No doubt every European country is doing the same.
http://offshorewatch.blogspot.co.uk/2012/10/jersey-guernsey-and-iom-to-put-igas-in.html?goback=%2Egde_3871433_member_173248378
*@Mark Twain
The Channel Islands and the Isle of Man are overrated as tax- and litigation-havens: http://duckduckgo.com/?q=%22In+re+Tucker%22+Bankrupt
You are correct that discrimination on the basis of nationality is not necessarily unlawful. Treaties provide for that all the time: “most favoured nation treatment” provisions for example are specifically aimed at preferences for one nationality over another.