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 financial institution in the world to act at their own tremendous expense as deputy US tax collectors. They must report to the IRS information about financial accounts held by US citizens. FATCA will instead turn the US into an economic pariah and Americans citizens into toxic assets.
FATCA 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. The US government is also looking to saddle our own domestic banks with the same costly requirements, making a crazy and destructive law even worse.
Lawmakers imagine they can avoid making the hard choices over spending by finding an untapped pot of tax evasion gold overseas, but it’s a fantasy. In the real world, FATCA will compel institutions to flee the US market in hopes of avoiding its heavy costs and exact a heavy toll on all Americans.
Banks Turning Away Americans
FATCA threatens American competitiveness in several ways. Americans living and working overseas are reporting being turned away by local financial institutions. Americans have had their bank accounts closed and have been denied mortgages and unable to participate in pension funds simply because they are American citizens. FATCA has turned them into toxic assets.
Excellent article. I went to work abroad instead of collecting food stamps and unemployment checks. As a result, I became specialized in my field and my income tripled. While I was a US citizen, enjoyed buying American products, may have helped to introduce Beef Jerkey to Switzerland, successfully promoted US technology, defended America from hostile views and even got a mortgage to purchase a house in Florida at the peak of its housing crisis while most stateside Americans were being denied loans.
To return the favor, America made it near impossible for me to have a local bank account, pressured local banks to refuse to refinance my mortgage in Switzerland, threatened my ability to find work in the local job market and advised me that it doesn’t represent or help Americans living outside of US jurisdiction.
Thus, I found that I had no other choice than to renounce US citizenship since I don’t want to collect food stamps and unemployment checks in the states. I now no longer have any national reason or motive to purchase or promote US products or to help Americans with economic or political difficulties.
In response, the US government says that it might prohibit me from spending tourist dollars in the US and that I won’t be allowed to choose to live with my offspring in the US if they don’t renounce their US citizenship. To this, I’d say that I’m a “good riddance”, because I don’t need to live or work for a nation which doesn’t appreciate my efforts.