If Congress set out right now to craft a law to sabotage the global competitiveness of the US economy, they’d have trouble coming up with one better than what they passed in 2010 in the Foreign Account Tax Compliance Act (FATCA). The law is ostensibly aimed at combating tax evasion and requires every foreign institution in the world to act at their own tremendous expense as deputy US tax collectors. FATCA will instead turn the US into an economic pariah and Americans citizens into toxic assets.
The many burdens created by FATCA have been well covered here and elsewhere. As I previously discussed, it will divert untold billions of dollars per year away from productive activities in order to pay lawyers to comply with a law optimistically expected to raise less than $800 million in tax revenues per year. I also recently explained how the US government is looking to saddle our own domestic banks with the same costly requirements, making a crazy and destructive law even worse.