Funny how you can move so quickly on this issue of corporate inversions but not those of American expats. So long then
While they may not be breaking U.S. laws, many of these companies are navigating a loophole in America’s broken and dysfunctional tax code. And while their shareholders may secure a temporary win, workers, taxpayers and this country all lose. America’s tax base erodes at a cost of hundreds of millions of dollars in revenue, increasing the burden on other companies and individuals. America also loses good jobs, talent, investment, and the ability to compete on a global stage.
Legal or not, this loophole must be plugged. Current law requires that U.S. companies reincorporating overseas must ensure that at least 20% of their stock is owned by their new, foreign partner. As chairman of the Senate Finance Committee, I am committed to raising this floor to at least 50% for all inversions taking place from May 8, 2014, on. I don’t approach retroactivity in legislation lightly, but corporations must understand that they won’t profit from abandoning the U.S. (NOTE: Senator what you are proposing is a massive treaty override that Canada and other US Treaty partners should fight tooth and nail).
@Polly, about the thinking of the Ivy League types re US CBT. Judging from some of the ‘academic’ papers justifying CBT, and a part of the presentation/s at the recent ACA Foundation event, I believe that a large part of this is not logical. It is not dispassionate. It is not academic though it is masked or presented as such (although some don’t even bother to include robust sources or even footnote their statements – or are entirely self referential ). It appears to me to be infected with the homelander mindset and brainwashing, whose worldview underpinnings and base assumptions mostly goes unexamined even by those that consider themselves to be rational researchers and scholars. It appears to be like a religion – they’ll argue about the more arcane details, but like a fish who doesn’t notice the water, or a person who takes air for granted, they do not know what they do not know, nor acknowledge the need to question what they have automatically ingested/inhaled simply by being part of the US homeland. It is working for them, so that they take for granted as being evidence of good. Most undergrads would never have been allowed to graduate if their work was as shoddy as some of the work produced by the CBT and FATCA apologists ( like this one http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1969123. )
Even one who seemed to understand the hardships, and repeatedly said they were ‘sympathetic’ (vs. empathetic) was eager to propose possible patches or fixes – without understanding that those only put another small bandage on part of the several big festering sores that CBT creates for those suffering abroad.
A fix for the issue of those whose disability grants and benefits and RDSPs are being claimed extraterritorially as US taxable – solely because they had a US parent, or a US birthplace, would always run the risk of disqualifying someone, and imposing yet another huge and punitive administrative burden and hurdle to surmount for any relief – because the patches are always designed based on the base presumption that first and foremost, no matter what the cost to those affected, the US must spare more thought and efforts and resources to guard against the imaginary legions seeking to ‘evade’ US taxes and masquerading as those suffering from the burden – no matter how unlikely. And the US dedicates NO effort to look at those it punishes for no reason and no gain.
Which becomes ludicrous in the context of some of these proposed fixes, but they always think that legions of billionaire tax evaders are hiding amongst those minding our own business outside the US – and apparently homelanders are willing to inflict ANY and all amounts of abuse of those living abroad in their paranoid quest for legendary tax evaders – even in instances where the liklihood of any US tax being assessed or owed is zero or minimal. Like with the Canadian RDSP, RESP, etc. The academics should be aware that we have already paid a full set of taxes in Canada, and we have our own legal oversight and tax system that makes it more unlikely (though possible) that we will owe the US too.
This cartoon illustrates why those abroad will abandon US citizenship – we know the 2008 campaign promises to listen to us and represent us just as homelanders are represented are clearly empty, and were even disingenous
http://www.veooz.com/photos/bHAdVVY.html
Badger hits another home run!
@Badger That was super-interesting! I think they are all bought. Perceptions can’t be THAT selective unless they are all seriously neurotic.
@Creature: Good memory.
Here`s the quote:
“I wonder if it’s worth a comment,” the spokeswoman, Nathalie Loiseau, said. “Honestly. We are working these days on very, very serious issues of war and peace, life or death. We are not working on potatoes.”
I never knew it was anti-German feelings in World War I that caused frankfurters to be renamed hot dogs. Hmmm. We need to find something to rename to retaliate for FATCA.
http://www.nytimes.com/2003/03/12/national/12FRIES.html
@bubblebustin,
Even those who make statements like this one; “….. While the Article concludes that the United States should retain its citizenship-based taxation regime, it acknowledges that a number of practical steps could be taken to ameliorate unnecessary burdens faced by overseas citizens.” as in http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2346458 also are relying on fixes or patches which can only cover at best, a small part of the gaping sore that CBT causes in instances like that of those suffering from the extraterritorial expropriation of their disability grants and savings (though these assets come courtesy of non-US taxpayers outside the US, and where they are explicitly designed in the country of residence to be tax exempt or tax privileged or deferred in order to fulfill a compelling social good).
‘Sympathy’ from Extraterritorial CBT defenders is not enough. Empathy would be better, and Advocacy better still. Those that state that they are ‘sympathetic’ are nevertheless willing to ignore that those affected need help and relief NOW more than ever, because of the US extraterritorial FATCA and FBAR crusade against anything and anyone living outside the US. They know and expect that we should be content with a scrap of some nebulous ‘sympathy’ extended, and some vague proposals of a future nebulous patches that would only become actually manifest if we had some kind of real representation, clout and resources in the US.
That makes them just as dangerous in a way as those that are rabid compliance enforcers, because they are the ‘softer’ side of the CBT apologists.
Justice deferred is still justice denied.
@CreatureOutside, I have had the opportunity to speak with some MPs about the so called “special relationship.”
I have had to explain that its like a “special” relationship between a normal stable person and the boyfriend/girlfriend from hell who is not stable. And the stable person stays in the relationship and does not walk away.
I think it does make a difference when our accent conveys a message to UK MPs.
Look what the US did to BP both in the public domain and financially. The responsible party was likely Haliburton but O put his foot on the throat of BRITISH Petroleum.
Conversely, UK banks were brought to their knees because of liar loans from the USA that were packaged up and sold to UK banks. I think the UK Government in a a UK Court should sue Fannie, Ginnie and Freddie!!!
Look at all the sweet promises made over Cadbury? They were lies and more lies. And now Kraft shoved Cadbury away in some other company as an unwanted toy.
@Calgary411. I have been pondering your sons situation for a long time.
Personally, I have come to the conclusion that your son is not a US Citizen regardless that the US has a law on the books which says he is.
He was born outside the US and you have never taken any action to bestow on him the “benefits” of being a US Citizen.
The US claiming him as a citizen is as valid as Belize writing a law and claiming him as a citizen.
I assume he has all the trappings of a Canadian Citizen.
I would never take him across the border as you would then be under their jurisdiction and who knows what they would do.
The question becomes a matter of what is a persons first citizenship? Your son is firstly a Canadian Citizen by his birth in sovereign Canadian Territory.
Then we have the issue of the master nationality act.
The more and more I think about the case with your son and with others worldwide, I almost think that such cases could be adjudicated locally.
Does a Canadian Court or maybe an Immigration Board recognize your son as anything other than Canadian?
Forget CLN, I am thinking that what many of us need is an in-country determination of our status.
@Polly, I think they all have vested interests in defending Extraterritorial CBT – and speak from a position of conscious or unconscious homelander privilege. And also I think they come from a certain elite class – far removed from the problems faced by ordinary families – they don’t understand what hundreds or thousands of dollars spent annually on useless US tax reporting to demonstrate zero tax owed means to an average person or family – it means nothing to them. I doubt that they even do their own US homeland returns themselves – they can pay US accountants and lawyers if need be. They have no need for them to think about any of this except as a matter of theory. The actual practical application and resultant harm doesn’t touch them. They have no need to worry about the US taxes on their child’s tuition savings plans or disability grants. They have no need to live with the denial of access to almost all normal investment and savings avenues, and double taxation and everpresent danger of falling afoul of the confiscatory penalty structures. The US homeland advantage they take for granted. US extraterritorial CBT and FATCA are thus just a natural and desirable part of this ‘best of all possible worlds’ where the US dominates and flexes its muscles – and they are happy to be members of the right club – and receive collateral benefit.
And some are smug and aware, and acknowledge their consciousness that the US is still a world power who can impose things solely based on might and domination. I felt that I have heard a tone and expression of smugness from some US homelander presenters even as it was tempered with some small (and perhaps belated) awareness of the need for some diplomacy – given the composition of the audience as those seriously impacted, and who are Canadian citizens and residents – many of whom have only family or vestigial ties to the US.
Thanks, George. I will pass your comment on to MPs on the Standing Committees in the Senate and House of Commons of Canada who are discussing implementation of FATCA. What you say; what you ask makes COMMON SENSE. I will look in to making queries with Canadian Immigration to see what their opinion might be.
I agree with you on never crossing the border, especially with me in tow, his mother with a Canadian passport showing a US place of birth. Not a situation I want to put my son in — being questioned by a border official who roughly asks him questions he would not know how to answer — or should not have to answer.
Once again, my thanks.
Hope everyone clicks even past the cartoon. Three or so clicks on the right arrow brings you to:
NDP Calls 4 Removal of #IGA from Bill C-31 #FATCA CON Govt Fails 2 Address Major Concerns & Issues https://www.youtube.com/watch?v=08WttMWXdmc
@Badger
“…they don’t understand what hundreds or thousands of dollars spent annually on useless US tax reporting to demonstrate zero tax owed means to an average person or family – it means nothing to them.”
LET THEM EAT CAKE!
@George
What would the US care about an in country determination of citizenship. The IRS itself says that if your country’s laws conflict with the US’s, US citizens are obliged to obey US law.
In the absence of clarification or statement to the contrary by the State Department, Treasury Department or any power that be, any child born to a USC capable of conferring citizenship to that child should assume that he/she is a USC, IMO. The only thing that’s kept the USG from laying claim to these children is that they haven’t yet had a reason to.
@bubblebustin, firstly the tide is turning on American hegemony.
The battle we are engaged in with a Charter Challenge and trying to get CBT eliminated or watered down is very important but it is not the root of the problem. The root of the problem is so called dual citizenship which can not exist in practice, it defies the laws of logic.
If a Country in exercising its sovereignty determines that an individual within its borders is its own, then it does not matter what Chile, Belize, China or the USA thinks……..
You are correct in stating ” The IRS itself says that if your country’s laws conflict with the US’s, US citizens are obliged to obey US law.”
But here is the rub, A Canadian Citizen with clinging US nationality while outside the USA is 100% Canadian and nothing else. I would have a different answer if someone was simply a US Citizen resident elsewhere.
Simply, a country can not impose its nationality on someone if you do not want it and are not within its borders. Thats why in 1930 we saw the Hague Convention on Certain Questions Relating to the Conflict of Nationality Laws.
So in Canada, this is why we have been proposing the notwithstanding amendment for Canadian Citizens resident in Canada. We are legislating that any clinging nationality is not relevant.
Its also why I suspect in France we have had the report from Victoria that some banks are interpreting “duals” as not affected by the IGA. Remember in France, a so called dual French/USA person will never ever be extradited back the USA. Why? They are French and French citizens can not be extradited from France.
@Badger
Did ACA ever release a video of the meeting? i get what you were seeing and your observations sound very astute. It kind of goes hand in hand with “being bought”- this kind of “elite” mentality. ( “Let them eat cake” is very fitting.) Funny, but they have those kind of people in other countries too. People who are used to being wealthy oftentimes don’t understand the hardships of others. I swear that every person I have met who was of nobility over in Europe had those tendencies. They just felt privileged- as if the best seat on the bus naturally belonged to them. And it is a long known fact that absolute power corrupts. It can corrupt anybody- except maybe angels like Mandela. I guess America has changed beyond recognition for me, as I only really remember it from the 50s. Back in those days maybe America still had some humility. But if this is the case – then how to reach them?
@Bubble Bustin. PART TWO “What would the US care about an in country determination of citizenship.”
I do not care about the USA, all I care about is the Country I live in whose citizenship I possess and use.
To keep this all Canada-Centric…..
I want Canada to treat me as Canadian with respect to all laws in Canada.
IF like any other Canadian, I go to Florida and break the law, come home and the US wants me extradited, I want to be treated like any Canadian in the same position.
But if I am in Canada minding my own business and there is some obscure US Law that I may have violated according to what they say it is, again treat me as a Canadian.
Soo we need the Government to come out with a blanket policy that says we are Canadian, period. Orrr we need to crack this nut one shell at a time and get some official body to state on paper that I am a Canadian in the eyes of the government.
I would also like the Government to once again have renunciation language for all new citizens and old ones that want to renounce as well!!
I believe that the US recognizes their own renunciation oath even though they advise that it has no bearing beyond its territory.
@George
“Look at all the sweet promises made over Cadbury? They were lies and more lies. And now Kraft shoved Cadbury away in some other company as an unwanted toy”.
And this is what Pfizer will more than likely do to AstraZeneca
Let them eat cake? Where them is us? We don’t have any cake, not even crumbs of cake. It’s more like they think we are their cake and they are eating us too. Now if that doesn’t take the cake I don’t know what does. 😉
There is no posting at ACA yet about the CBT vs. RBT debate video. Hope it comes out soon. I sent an inquiry to the ACA contact e-mail address.
If I make no sense now and hereafter (it’s possible I never have) it is because I am now tilting at another windmill — stealth installation of a “smart” meter on our house without permission.
I just got this alert in my email — for May 1st Finance Committee meeting, where MP Scott Brison asks about the RDSP (and RESP) grants and bonds and the US benefiting from them, compliments of the Canadian taxpayer. Says: Your alert for FATCA has new results in Parliament (ending with “love open parliament.ca”).
It was interesting to read it again. I’m trying to compare this to how the RDSP / RESP are US taxed, per my US tax lawyer:
Start at:
@Brockers……..lets look and create something called Fatca -Like.
Lets talk about US passports.
There are many people who the US considers its citizens who travel on passports that are not issued by the USA.
When those people travel on documents issued by other countries, the USA is unable to track where those “citizens” may have been traveling quite possibly in violation of some travel embargo like to Cuba.
Is it in the interest of the United States to be able to track where “its citizens” travel to “in the interest of national security?” Congress would think so.
The United States requires all US Citizens by law to enter and leave the US with a US passport.
What if the US passes a law or amends the existing law that requires US Citizens to travel solely and exclusively with a US Passport worldwide?
Would Canada and other countries agree to a Passport IGA?
I would say that such a law is as legitimate as FATCA is.
@Em, I like;
“…… It’s more like they think we are their cake and they are eating us too. Now if that doesn’t take the cake I don’t know what does”. That’s destined to become a classic quip – and it really made me laugh (ruefully!). Thanks!
@Polly, I don’t know when the ACA will release the video, but I would be interested to see it if and when it does.
I don’t know how to reach and motivate homelanders. ACA, AARO, and FAWCO have been trying to do that for ages.
Em is right – we are the cake and they’ll eat us too!
@george and others like Victoria, some of you may have heard about the experience of my son who flew (we should have driven) to Seattle to Vancouver for his 4 month summer internship a few days ago. He and his mother (Happy mothers day!) spent 3 hours in immigration, missing their flight, after the Dept. of Homeless Insecurity officers thought he was trying to enter America falsely posing as an American (a felony crime). Well it turns out my son thought his social security card was enough. While a passport is good, the ultimate proof of US citizen acquired abroad is the Consulate Report of Birth, which I got for him when he was 3 but completely forgot about it. My son did not have a work visa — that was the underlying problem as he thought he was American. He should have just gotten a USA work visa off of his Canadian passport. This just goes to show how complicated it can be to be dual especially if you do not know the system. He is now this week in SF to attend a training week, to be held at Facebook headquarters (Menlo Park CA, google earth 1 Hacker Avenue! The place is huge).
@George
Regarding your comment on passports. That would mean just taking the ferry over to France or Dublin and it’s non-EU immigration control. And what if the US passport has long been expired? That would mean people would be unable to travel outside their adopted countries. And what if they have never had a US passport (e.g., returned ‘war babies’)? A year ago, I would say that would be a far-fetched scenario. Now I’d say that is entirely in the realm of possibility.
@badger @polly
The big problem is that the whole literature is riddle with assumptions. The economics literature assumes that any emigrant must be motivated predominantly by economic concerns, such as tax. How they explain all of you people in Canadian I have no idea. The law literature isn’t much better.
@Brockers, found an interesting quote on Wikipedia that in a nut shell explains what we all want.
“Saying that a country “does not recognize” multiple citizenship is a confusing and ambiguous term. Often, it is simply a restatement of the Master Nationality Rule, which means that a country treats a multiple-citizen, one of whose citizenships include that country’s, no differently from a sole-citizen of that country. In other words, the country “does not recognize” this multiple-citizen person has multiple citizenships, for the purposes of the country’s laws, even though the person may actually be regarded as a citizen by other countries according to their laws. In particular, this may mean that if you’re a citizen of that country, you cannot use another country’s passport or citizenship documents to enter or leave the country.”
http://en.wikipedia.org/wiki/Multiple_citizenship
@Creature, the idea for the above had its seed in a document from August 2000 called the “Money Memorandum” and it pertains to security clearances in the US.
Having a passport other than the US, “could facilitate travel unverifiable by the USA.”
That was fourteen years ago before 911. Today, in a post FATCA environment don’t you think some Senators would think it vital for security to be able to discertain foreign travel?
IF they need FBAR reports on US expats and now need IGA reporting on US expats, the only loose end is what kind of traveling are these US expats doing?
I did not want to give the direct link for reasons, but you can click here first for an article then click through; Look for Money Memorandum
http://news.clearancejobs.com/2010/09/29/dual-citizenship-and-security-clearances/