The Atlantic magazine, read widely by progressives on the East Coast, has a good article about the consequences of the recent announcement that Germany will be signing (has signed) a FATCA IGA.
The title is:
The Unintended Consequences of Cracking Down on Tax Dodgers Abroad
A regulation makes banks report foreign accounts to the IRS, but some are finding loopholes in the law aimed at closing loopholes.
This article was first posted by SwissPinoy here, and there has been some subsequent discussion and comments around this article that needs more attention and comments. I encourage Brockers to post on The Atlantic because, frankly, you need to engage the progressives where they live and read. I, for one, am going to paste it on Sven Giebold‘s web page, where he doesn’t let comments out of moderation, unless they come from Victoria… 🙂
Comments regarding this article are included below for easier reference…
Here is a thought in this wonderful article in the press today:
Will America’s nearly 100,000 expats living in Germany challenge FATCA in court? It’s too soon to tell.
But experts say they might have a very good case.
The Unintended Consequences of Cracking Down on Tax Dodgers Abroad
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@SwissPinoy…
That is a great break through for a Progressive magazine like The Atlantic. Thanks for drawing my attention to it. We need to spread this one around, as Progressive will probably NOT read “The Daily Caller” if it published a similar story.
I just sent this off to James Fallows of the Atlantic, that wrote the FATCA trilogy about a year and a half ago…
James…
I assume you saw this today? Just for your reference file should you return to the FATCA subject someday. Awareness is growing even in progressive circles, that good intentions have bad consequences.
The Unintended Consequences of Cracking Down on Tax Dodgers Abroad
A regulation makes banks report foreign accounts to the IRS, but some are finding loopholes in the law aimed at closing loopholes.
One of the Major things this report didn’t address about the Unintended consequences, is that Treasury and the Obama administration, via the 2014 budget, page 202, intend to impose the same reporting requirements onto the US financial Institutions via a request for more regulatory authority. They have promised reciprocity in the FATCA IGAs under the “What is good for the goose is good for the gander?” I call it a domestic FATCA or DATCA. But, they have no such authority to do that , YET! Do you think Harry Reid and Joe Biden will give up Nevada and Delaware beneficial ownership opacity for the greater good in a FATCA reciprocity deal?
Treasury seems to think they will. From a recent EU Parliament FATCA public hearing.
Transcript of part of the final comments made by Treasury’s Robert Stack…
And finally on reciprocity, we would simply point out that under our IGAs that are reciprocal, the IRS agrees to exchange information on interest, dividends and other income that is already collect, which is substantial and in some cases more extensive than what has to be, uh, reported under FATCA.
The US recognizes the importance of reaching equivalent levels of exchange, uh, under all our law, that we are getting from other jurisdictions. And the administration has included in its budget proposal a provision that would permit U.S. Financial Institutions to make such equivalent exchanges.
Under the U.S. political system, uh, different from some Parliamentary systems, we need to work that through Congress but we are um, we are committed to doing that. Once we’ve done that, to go to the question of beneficial ownership in Delaware, once we have equivalent levels of exchange, we would expect our own financial institutions would be required to look through entities and report on individuals just as non U.S. institutions are required to do under our IGA
I have the entire transcript attached…
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@swisspinoy, that’s a great article. This in particular;
“….Data protection experts believe there exists an inherent conflict between FATCA and data protection laws in Germany– laws which protect foreigners living in Germany just as they do German citizens.
FATCA could potentially violate an individual’s right to informational self-determination, a right enshrined in the German constitution.
Will America’s nearly 100,000 expats living in Germany challenge FATCA in court? It’s too soon to tell.
But experts say they might have a very good case.”
This phrase stood out for me “… laws which protect foreigners living in Germany just as they do German citizens..”
This is what should be the case for permanent residents in Canada – on the same basis as should be available for Canadian citizens. I guess we’ll see.
@JustMe, how brilliant to have sent on that EP FATCA hearing information on re Stack’s comments on US ‘reciprocity’. Not many US homelanders would have been following the EP’s moves on this, and Sophie in’t Veld’s pursuit of transparency and documents on FATCA talks and negotiations behind the scenes. Therefore US homelanders – and perhaps US banks do not know exactly what the US, through people like Stack, are offering the rest of the world without telling the US public what they are committing to. If this was all above board, they wouldn’t have to hide it – from all those affected, the citizens of the countries where the IGAs are being negotiated, AND THE US PUBLIC and Congress.
FATCA stinks. If you have to do it behind the woodshed, how likely is it to be a true public good in a democracy?
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June 6, 2013 at 12:21 am
Thought I would take another whack at Sven…borrowing liberally from some comments here.. I posted this that will never see the light of day, but he or some staff will have to read it.
Dear Sven,
I know you are not letting my previous comment out of moderation. Nor will you let this one either. That is your prerogative. However, I must say, it doesn’t show much courage. While the mission of my first message was not to berate you publicly, I am very disappointed in your unwillingness to engage in discussion with those who disagree with your position. I had hoped that you would rise to the challenge of showing the same communication transparency you want every person in the world to have on their financial transactions and tax payments.
Transparency for us, and obstruction and opaqueness for you, I guess.
I must say, your failure to address forthrightly the questions that Victoria raises speaks volumes about the political positions and moral standing of the Greens, whom you represent. I had expected better.
I thought you might be interested in an article published in an U.S. east coast Liberal magazine, The Atlantic. Some Progressives, that you would naturally align with, seem to be willing to look the consequences of FATCA issues more clearly than you.
Title: The Unintended Consequences of Cracking Down on Tax Dodgers Abroad
I think you need to do some real soul searching on your willingness to throw so many Europeans under the bus in pursuit of your idealistic goal “in your mind” of some grand global automatic exchange that is NOT going to stop offshore tax evasion by the very rich. They are laughing at you. By the time you get this all set up, and all of us innocent and collateral fodder enslaved, handed over to the US for processing, the rich will have already found other means to avoid your clutches. You might not like it, I might not like it, but that is the reality. Your cure is worse than the disease, as it condemns all to the same medicine regardless of their symptoms.
Frankly, given the prospects of what this means for an Orwellian world of your construct, I would rather live with 10% tax evaders, and 90% freemen, than your vision of 100% tax compliance or full enslavement to your demands and visions of “tax justice” via some global GATCA. If that doesn’t work, and it won’t, what next? What will be enough for you? Frankly, your position and what it means for a Big DATA total financial surveillance future, scares the hell out of me.
Dear Em, Weaver of New Lyrics,
A special request has come — do you have some spare time to put your magic pen to paper to update Elvis Presley’s
“In the Ghetto”
to
“In the Homeland”