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.
@SwissPinoy
I have not used Google Feedburner, but I was looking over your list and wondering how it could be saved. It is very comprehensive. I am not quite sure how it works, but maybe I should look into @notamused suggestion on Feedly. I assume this is somewhat like a podcast feeder I have used, where it picks up the latest postings, is that right?
@SwissPinoy – From today’s revelations of the NSA, it appears that in addition to accessing – and I assume downloading – all telephone data, they did the same with all on-line data, too. So the NSA must have already saved it for us….
Folks – If EVER there was an incidence that should shake up the people of the EU to fight against FATCA, what the NSA has done should be it!! As one of our members detailed, any data the IRS gets through a FATCA/GATCA data exchange WILL be made available to other parts of the US government to use however they want to.
I raised the issue of fiscal gestapo through the “tax questionaire” – if the tax authorities require you to fill out their questionaires completely, they have the empower to force you to divulge everything about you for “compliance” purposes. With more and more of these forms being “available” for completion on-line, that means more and more data gets fed into the belly of data-mining beast. Once it is in the EU belly and the OECD belly, IT BELONGS TO THE US GOVERNMENT!! And as we are seeing, YOU NO LONGER HAVE ANY PRIVACY RIGHTS, YOU NO LONGER HAVE ANY PRIVACY, AND YOU NO LONGER HAVE ANY POWER!
You should be SCREAMING in Canada to your government – and everyone in the EU – to STOP FATCA NOW! Tell the IRS to worry about the USA – PERIOD!!
And the NSA via facebook is going to find out that I asked 2 different women to the same concert !!!!!!
Clearly you are a threat to national security, then! Thank God the NSA has this information – I feel SOOOOOO much safer now…..
@Plato
In case you haven’t seen:
https://now.mmedia.me/lb/en/commentaryanalysis/fatcas_security_problem
@Just Me, if you like, I could send you the OPML file that you could import into another service. I’m still playing with different readers, but Feedly looks promising. I’m thinking of slowly shifting from an America-focus to a future-planning focus to make the most out of my given situation.
@Plato, at the going rate of things, it looks like I’ll be supporting the Swiss inititiate for more privacy protection.
Here’s my plan. I will be in wait and see mode for a year or so but IF it comes down to my credit union presenting me with an unacceptable questionnaire re: US personhood I will refuse to answer it. (Does Canada have the equivalent of a 5th amendment?) I’m hoping we will have some advanced notice — enough to get a big cheque sent off to help whatever anti-FATCA class action lawsuit is underway at that time. There will be one I am certain. Then I will have the satisfaction of seeing what shade of green my credit union manager turns when I say go ahead and close my account (ALL legal, ALL post tax) and I want it ALL in cash. I will disperse this cash quickly to people who need it more than we do because I wouldn’t feel safe trying to hide that much money at home.
Even though we live minimally right now we will see just how low we can go. We are fortunate to have a mortgage-free roof over our heads (built it ourselves actually) so as long as we can come up with the property taxes each year we will have shelter. Although our property isn’t suitable for gardening we have neighbours who can provide us with rentable land so we will have food. We have a wood burning fireplace so we will have heat. We will be okay … I think. Thank goodness Canada has a safety net (as long as Harper doesn’t try to unravel it) because we might just need it. Simply having access to some medical care (as long as Harper doesn’t try to undermine it) will be a big plus. It is perhaps an irrational plan but it is a plan.
@em
You have a wonderful plan, not unlike ours which includes hunting rifles for finding food 🙂
I guess it is time to replay this parody which is truer than fiction now…
The Onion warned us this was coming…
They just identified the wrong agency. It is the NSA and IRS that are scooping up the data. CIA is too busy with drone strikes…
@ Just Me
“… allows me to interact with my fans without having to see, hear or smell them.” Too funny. 🙂 Thanks for the laugh.
@ bubblebustin
Live small and carry a big rifle. You have a good plan. Thanks for not calling me paranoid … even though I probably am. 🙂 🙁 🙂 🙁 Or maybe I’m just bipolar. I have my good days and my bad days.
As the saying goes, just because you’re paranoid, doesn’t mean someone isn’t out to get you. 🙂
And here I thought the saying was “Just because the government IS really spying on you, doesn’t mean you have to be paranoid.”
@Em,
I am also in ‘wait and see mode’, and will not tell either my bank or credit union about my ‘other’ citizenship if asked. I may even establish a relationship with a 2nd credit union because the one I am with now has assets over 175 million.
We sold our family home recently due to my husbands work which required relocation to a city which has much higher home prices, so we banked the money are renting. If the FATCA train starts to get too close, we will sink the money into another home, leaving RESPs and RRSPs as our only substantial accounts which should be protected under FATCA (if it unfortunately gets to the reporting stage),
In a worst case scenario, I would consider taking my name off all our accounts (my spouse is Canadian-only), but I am optimistic that it will never get to that point. In the worst, worst case scenario, I’ll cash out all my RRSPs and RESPS (sorry kids) to pay off the big mortgage I will need to buy a house.
There are ways to play the FATCA game. In the meantime, lets keep the pressure on. Like you, I suspect we will soon see a class action law suit – something I will definitely consider being a part of.
http://maplesandbox.ca/2013/canadians-are-fair-game/#comment-7446
and
NSA Utah ‘Data Center’: Biggest-ever domestic spying lab?
NSA Utah Data Centre, which some think is a parody?
In conjunction with calgary411’s comment here is a reminder why privacy matters and why the mantra, “If you’ve got nothing to hide, you’ve got nothing to fear”, is a load of crap …
http://chronicle.com/article/Why-Privacy-Matters-Even-if/127461/
@Em….
Here is why we trust these guys so much…
and note the reasons for the Utah center…
So, they may not need FATCA to get everything. Just need to build a little annex next door for the IRS and Treasury, and feed them everything they want.
Em…
That privacy article is really worth a thoughtful and slow read.. Did you note this?
@ Just Me
Mr. Clapper says “not wittingly”!!!! How about nitwittingly? Did this jerk even hear the words that came out of his mealy mouth?
If the Utah Data Center is truly “bottomless” we can only hope the data miners who will soon begin work there will go straight to you know where. I heard the term yottabyte tossed out regarding its storage capacity and I think that has 24 zeroes (or picture 1 quart of milk and 2 dozen donuts).
@ Just Me
I have that privacy piece in storage and now I guess I have to think about “them” having the fact that I have that piece in storage in their storage. Cripes!
http://www.usatoday.com/story/news/world/2013/06/09/nsa-leak-hong-kong/2406767/
A 29-year-old former CIA employee who admitted responsibility Sunday for one of the most extraordinary leaks of classified information in U.S. history told The Guardian he exposed the documents because he thinks Americans should know how the government has intruded on their privacy.
“I can’t in good conscience allow the U.S. government to destroy privacy, internet freedom and basic liberties for people around the world with this massive surveillance machine they’re secretly building,” Edward Snowden told the Guardian in an interview.
RE: NSA – Now you know why the IRS is so anxious to get those “automatic data exchanges” with other countries. If it is in the IRS, it is accessible by the NSA. And once they actually have the protocols for all the banks in the world and the individual accounts, there isn’t anyone in the world that the NSA will not have access to.
My friends, if countries permit FATCA to go ahead with these data exchanges, it is not just the proverbial “letting the fox into the hen house, it is the fox opening the door for a pack of rabies-infected wolves into the henhouse.” The EU would be NUTS to permit this – absolutely NUTS!! And so would Canada!
Since David Axelrod always advises “never let a good crisis go to waste”, neither should we. The NSA and IRS-Cincinnati scandals are the greatest leverage we can ever hope to have to stop FATCA and we should jump all over it!
Over to the Dark Side, via The Economist…
http://www.economist.com/blogs/democracyinamerica/2013/06/surveillance-america-0?fsrc=scn/tw/te/bl/overtodarkside
JUNE 10, 2013
N.S.A. ENFORCES ZERO-TOLERANCE POLICY ON CONSCIENCE
POSTED BY ANDY BOROWITZ
http://www.newyorker.com/online/blogs/borowitzreport/2013/06/nsa-enforces-zero-tolerance-policy-on-conscience.html
“When you sign on to work at the N.S.A. you swear to uphold the standards of amorality and soullessness that this agency was founded upon,” said N.S.A. director General Keith B. Alexander. “Any evidence of ethics, decency, or a sense of right and wrong will not be tolerated. These things have no place in the intelligence community.”
Whistleblowers are only OK when they report TO government agencies, not ABOUT the government agencies:
Reported NSA Leaker Edward Snowden Could Face Extradition From Hong Kong Hideout