#FATCA: will Europe pay the price for one-sided U.S. financial information demands? http://t.co/Dc2BL0z34U via @New_Europe
— U.S. Citizen Abroad (@USCitizenAbroad) August 15, 2013
A new post from Jim Jatras
It seems that “automatic exchange of information” (AEOI) is all the fashion at the European Commission as a means to combat “revenue losses incurred due to tax fraudsters and evaders.” To that end, a recently proposed Council Directive would base an AEOI “pilot action” on model intergovernmental agreements (IGAs) drafted pursuant to a “joint statement” last year by the U.S. Treasury Department and five EU governments for “reciprocal” implementation of the U.S. “Foreign Account Tax Compliance Act” (FATCA).
As an American, I cannot tell Europeans they should not base their tax policy on AEOI or the FATCA model. But if the Commission or EU Member States believe that the U.S. will actually provide “reciprocity” for the kind of information they are committing to deliver to Washington, they should reconsider their assumptions.
Under the FATCA IGAs, European governments commit to require their domestic financial institutions to report the assets of all “U.S. Persons,” first to that government’s own tax service, and then to transfer it to the U.S. Internal Revenue Service (IRS). For example, under a law recently approved by the parliament of the United Kingdom (the first country to sign an IGA), HM Revenue & Customs commits explicitly to impose the American FATCA law on British institutions. The costs of regulatory implementation by HMRC would fall on British taxpayers. In turn, UK financial institutions (and their customers) would bear hundreds of millions of pounds in costs for collecting the information for transfer to the IRS. The direct revenue benefit to the Exchequer? Zero. The same will take place in each non-U.S. “FATCA partner” country, as the 2012 “joint statement” euphemistically calls them. (Worldwide, estimated FATCA compliance costs run to $1 to 2 trillion in order to “recover” revenues of less than $1 billion per year – enough to fund the U.S. federal government for about two hours.)
What is the U.S. obligated to provide in return? Nothing, as it happens. The IGAs, which are nowhere authorized or even mentioned in FATCA, have no clear status in American law. They are not simple treaty-based “interpretive” agreements, nor are they treaty amendments submitted to the U.S. Senate for advice or consent, or to the full Congress for enactment in American domestic law. In essence, this means the IGA has the force of law for the non-U.S. “partner” but not for the U.S. I have first-hand knowledge of at least one government that specifically told Treasury they would consider an IGA only if it took the form of a treaty protocol, with Senate approval, so they could be sure it would bind the U.S. as well. Treasury flatly refused.
You can read the complete article here.
As I’ve said before, I’m not the richest guy in the world either. My back injury in 2006 would have allowed me to go on disability welfare…if I had no pride. Unfortunately (or fortunately whichever way you look at it) I do. So I would much rather go out, photograph wildlife and earn a living that way than “game the system” and sit around on my ass doing nothing. I have a 600mm f/4 lens which is costing me $2200.00 every four months for three payments which thanks to a good friend, I am able to make tri-yearly payments in order to own it (that’s the only way I would be able to afford it – but I cannot NOT buy it. It’s either that or welfare and I would rather starve than go on welfare). The back injury is such that I have to constantly adjust my position (whether sitting or standing) or my back pain flares up and my back seizes up. My wildlife photography is all I have.
My rent is not subsidized; my late father bought the house that I am living in right now and the mortgage and the property taxes come out to less than what we would pay renting. My mother holds the ownership of the property and the signatory on the mortgage and property taxes (and we pay her). Our car is an older car, almost 10 years old. That’s all we could afford for me to get my wife to school and to work (She is working as well as going to school). We make do with what we have and what we need to get my business to where it needs to go depends on whether or not we can manage to work together a good deal. In the meantime, I’ll sell my photography at flea-markets and try to earn an “honest living” instead of trying to “game the system”.
Europe and the world are fully occupied upon double NON taxation. Their discussion points, coupled with the media and the sheeple, are so dripping with “fair share” (for the governments) that there is little chance to even begin discussing “fair” for human beings. With the support of the sheeple, the governments will ensure that no less than 100% will be extracted from the population.
“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”
Even if we believe that we are getting good value for our taxes, we should still mind paying them. After all, it’s our money and we must be vigilant against believing that those among us who hiss when we don’t are somehow not wanting to pay their fair share.
My US tax lawyer has a sign posted in his lobby, goes something like this:
That happy feeling you get when you receive your tax refund is soon lost when you realize it’s your money being refunded to you.
Where the homelanders go wrong in accusing us of not paying our fair share is when they confuse the benefits of citizenship as being the benefits of taxation.
Any benefits I receive from the US are granted through citizenship, not taxation, otherwise no other nation would allow their expats the same.
@bubblebustin
“Where the homelanders go wrong in accusing us of not paying our fair share is when they confuse the benefits of citizenship as being the benefits of taxation.”
Exactly, and when CBT links the two together, you can’t even have a discussion of the citizenship issue, without the conversation heading to the issue of taxation sooner or later.
They also justify it by saying that one of the responsibilities of citizenship is paying taxes. Sounds fine on the surface, but once you start scratching towards the meat off the issue, it’s not really true at all.
I am a permanent resident in Canada, but yet I have to pay federal taxes. Clearly, it is not a responsibility exclusive to citizenship. And of course, there is nearly half of the homelanders there that don’t pay federal taxes at all. So apparently, it’s not necessarily even a responsibility of citizenship, depending on your situation.
MSNBC just reported that the Cayman Islands have just signed an agreement to provide financial information on USP to the IRS. Don’t know the details.
mjh49783 – doesn’t matter whether you’re a permanent resident or not, you’re utilizing both federal and provincial benefits such as the roads and/or transit. The places that you use for recreation such as Canada’s designated national parks fall under national purview. My wife, herself, is a permanent resident here and she pays her taxes here without complaint. What she would prefer (as she has told me) is her right to vote here in Canada. That is why she is giving up her US citizenship. She is taking her post-secondary education up here in Canada. And she has had to take “make-up” courses in order to correct the deficiencies of the US school system.
If my wife is not utilizing US roads, the school & medical systems, or the welfare system in the United States she shouldn’t be subsidizing those who do. To demand that we do so is tyrannical. And the United States has been known to be a bully to get what it wants…and what do they say in school about ‘dealing with bullies’. Bullies will not cow to anything but a display of force. And unless there are countries that develop a backbone, they will continually be bullied.
@The_Animal
“mjh49783 – doesn’t matter whether you’re a permanent resident or not, you’re utilizing both federal and provincial benefits such as the roads and/or transit.”
Exactly. It doesn’t matter, and it shouldn’t. That is why I don’t understand those that make the claim that paying taxes is one of the responsibilities of citizenship. It would be a much more successful argument to be made, if someone were to say that, paying taxes is the responsibility of those that are resident in the jurisdiction that has the relevant tax policies. Hence, the reason for residency based taxation, a tax system that practically every other nation in the world, except for the USA, currently implements.
Let the US residents pay for their own crap, starting with a policy that ditches the free ride of half the ‘taxpayers’ there that actually don’t pay any taxes at all!
Let the US residents pay for their own crap, starting with a policy that ditches the free ride of half the ‘taxpayers’ there that actually don’t pay any taxes at all!
These people get a whole bunch of free stuff. Look at the number of people on Social Security disability, food stamp and have then there is lecture on poor being overweight.
@money
Yeah. They even give overweight people Social Security nowadays! Why not Jenny Craig and a self respecting job?
Actually I was just listing various program there is 10 million Social Security disability most of these are a bunch of under 60 years claiming they have back problems. A real scam.
@money
I thought Social Security was supposed to actually be difficult to get if you became disabled, and that people were also supposed to also put in enough work credits or something like that?
It was never meant to be given to everyone under the sun for every little ache and pain, and that don’t want to work because of it. It’s supposed to be for those that can’t work! It’s not supposed to be welfare! The Social Security trust fund is supposedly full of IOUs and now they just give it to everyone when it’s already broke? Idiots!
One of my wife’s friends had moved to the States and she’s a little bit loopy in the head. Doctors there told her to go apply for Social Security! What the hell?!? She doesn’t even have a freaking green card yet, let alone ever worked there, yet she’s going to get a cheque? Can’t her husband support her? Wow! Freaking wow! :^/
As for back problems, they are supposed to be severe in nature, and show bone deterioration in the discs through an MRI before a claim can be considered, or so I thought. (My mother got her’s at 61 for degenerative disc disease) Otherwise, anyone can just walk off the street and claim back pain just to get a cheque!
You’re overweight from too much fast food? You get a cheque. Just don’t spend it on gym memberships and like eat well, okay?
You’re depressed? You get a cheque now, too. Wow! But don’t look too freaking happy when you go cash it, or you might get cut off, and then you have to get a job! LOL
Hey! Maybe we can claim an anxiety disorder from all of the FATCA mess we’re subjected to, and then offset those confiscatory penalties with Social Security windfalls? And once we renounce, just keep on collecting as NRAs!
Or, if you’re a politician like Jesse Jackson Jr., and have suffered stress from being prosecuted because you’re a f—ing crook, and misused $750,000 in cash, you can get a monthly cheque for $8,700 from both Social Security, and the Federal Employees Retirement System!!
Renounce! I have this aura now, it is like being on drugs. On September 5, I go to Vancouver to renounce, second appt. I applied so long ago (Nov 15 2012)
The unfunded liabilies of Social security are more than $15 trillion, Medicare has more than $30 trillion. USA has to steal the money from somewhere to pay them off. Here is another way: get it from new 2nd class citizens:
“Hey! Maybe we can claim an anxiety disorder from all of the FATCA mess we’re subjected to, and then offset those confiscatory penalties with Social Security windfalls? And once we renounce, just keep on collecting as NRAs!”
Will it help sink the USA faster? >:) ~evil grin~ Suuuure, then why not? ~evil laughter~ I just want to see the absolute dissolution of the United States. At least then, I’ll be able to sit on the sidelines and laugh. That’s the only thing I want to see after the stress and bullshit that we’ve all gone through. The entire END of the United States as a viable nation.
An MRI would probably have shown nerve damage in my back…but frankly my viewpoint is. a) I don’t need welfare. b) I don’t need to tie up an MRI time that someone else (who needs it more than I do) can have – which could potentially be life-altering. For me, the pain isn’t bad enough to warrant a situation where I’d need to be on welfare (I can manage lugging my lens 5 miles though my back will complain like hell afterwards – just pop some tylenol extra strength, and keep moving. As long as I’m doing something that’s productive that I love doing, then I don’t give a damn what anyone thinks. And I’m not living off someone else’s dime then.
Claiming an anxiety disorder will get you nothing. They could care less. My son has severe panic disorder. It’s so bad he missed nearly all of grade twelve. He still graduated half a point from honour roll which he had made every other year because his teachers and I and HE worked our butts off to make that happen for him. They wouldn’t give him the half point so he didn’t make “Ontario scholar” which was his aim from grade 9.
He was nearly hospitalized five times that year but, they felt the hospital wasn’t a good place for him since he is rather vulnerable and they had people on that floor from the criminal justice system. He also has OCD, depression, NLD and a myriad of physical disabilities. He WORKS because he wants to pay his own way though it really, really white knuckle every second hard for him. He is on a boatload of meds and would have to fight like hell if he ever wanted disability. Not that he would he’d never take something he didn’t feel he earned. He wouldn’t even allow the school to help him with an IEP because he said “It’s not fair to the other kids” no matter how much I explained to him that it was fair. He would not take any extra help.
Good luck getting disability for anything related to an anxiety disorder. True anxiety disorder causes people to not be able to live a normal life when it is very severe, it also increases the risk of suicide to a very high number. New research indicates it also puts people at a much higher risk of heart attacks. Even then you won’t get any disability, even if you were hospitalized and are totally incapacitated. Oh you can get some eventually but, the fight to get it is YEARS long. You’ll see plenty of people with it living on the streets due to a lack of support.
Has the U.S. FATCA regime caused some people to have panic attacks and anxiety? Yes, they likely have. If this ruins your life having this disorder will you get any help? Nope. Highly unlikely. That angle wouldn’t get anybody anywhere. Here or there. I have lived it.
Kermitzil. How did you apply? Vancouver never shows any appointments.
“Nearly 11 million disabled workers, spouses and children get Social Security disability benefits. That’s up from 7.6 million a decade ago. The average monthly benefit for a disabled worker is $1,130.
An additional 8.3 million people get Supplemental Security Income, a separately funded disability program for low-income people.
If Congress doesn’t act, the trust fund that supports Social Security disability will run out of money in 2016, according to projections by Social Security’s trustees. At that point, the system will collect only enough money in payroll taxes to pay 80 percent of benefits, triggering an automatic 20 percent cut in benefits.”
http://www.cbsnews.com/8301-250_162-57590780/house-probe-cries-foul-on-social-security-disability-claims/
KalC
I thought you wanted to stay underground from US?
Well that’s pretty absurd, and I thought I was just being tongue in cheek over the whole matter.
They’ll give it to fat people, and to people that are down, but not to people that can’t function due to severe anxiety? Wow!
I don’t know anyone over there in the USSA that isn’t depressed in one way or another, but I guess in a sort of twist on Animal Farm, everyone is disabled, but some are more disabled than others.
But a serious question if I may: Did anyone ever have this insanity in mind when they did that welfare reform act back in 1996? If so, then I guess that explains all of those stupid Social Security Disability commercials that I get to be bombarded with whenever I bother with the TV soon after the welfare changes took effect.
The deficit is above $17 trillion. Social Security unfunded liabilities are above $15 trillion. Medicare unfunded liabilities are above $30 trillion. Total liabilities are above $85 trillion. They need to steal Money from somewhere.
@money
I just followed your link. and if I’m reading this correctly, it seems that a lot of administrative law judges are just churning out approvals (under a quota, it seems) in order to try and clear out a backlog of cases that the state disability determination services have previously rejected.
No wonder the damn thing is falling apart!
Obama has overturn welfare reform
http://www.washingtonpost.com/blogs/2chambers/post/gop-moves-to-block-obamas-welfare-reform-changes/2012/09/11/5a1f8b18-fc58-11e1-8adc-499661afe377_blog.html
As far as I am this is just illegal vote buying.
This is from a left wing paper that is broke.
That survivor right condo had a bunch of these Social Security disability condo. There was a guy who was on since he was 21 he was perfectly capable of doing manual work. but his parent taught him to play the game. He always brag how much money he was receiving and he had an attitude that everybody had to feed him. He would go to social event and ask everybody what were they eating. He once complained that some the of food he received from the government was not very tasty. He also attended every Democrat meeting supposedly because he received free cake.
Ayn Rand was correct.
@money
Ayn Rand was definitely correct. It was something that became self evident to me on a different forum a couple of weeks or so ago, as apparently, I’ve learned from a proud American homelander that I’m just a selfish libertarian. Apparently, going Galt pisses off about as many neo-conservatives as it does those liberal socialists. Seems like once you scratch off the veneer of left and right, the core of those two ideologies looks pretty much the same.
Atlas Shrugged may indeed be a work of fiction, but man does it touch a lot of nerves! ;^)