UPDATE SUNDAY NOVEMBER 13, 2016
REINCE PRIEBUS CHOSEN TO BE PE TRUMP’S CHIEF OF STAFF
EXCERPTS:
WASHINGTON — President-elect Donald J. Trump on Sunday chose Reince Priebus, the chairman of the Republican National Committee and a loyal campaign adviser, to be his White House chief of staff, turning to a Washington insider whose friendship with the House speaker, Paul D. Ryan, could help secure early legislative victories.
But as chief of staff, Mr. Priebus will be the one who has several hundred White House staff members reporting to him. He will be the primary gatekeeper for Mr. Trump and the person most responsible for steering the president’s agenda through Congress. That role will be especially critical for Mr. Trump, who has never served in government and has few connections to important political figures.
As Mr. Trump denounced the Republican primary process as rigged and, on occasion, threatened to quit the party and run on his own, Mr. Priebus remained neutral. And when Mr. Trump secured the nomination, Mr. Priebus stood by his side.
Mr. Priebus worked with Mr. Trump on the nuts and bolts of presidential politics, trying to smooth his rough edges and staying in close contact as a bare-bones campaign prepared to go up against the Clinton machine.
PRESS RELEASE VIA MR. PRIEBUS JULY 2015
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I found myself wondering just what it is expats will want to focus on now, that the Republicans have the Presidency, and control of the House and the Senate. As Stephen Kish pointed out, this could change in two years (well, really just a bit more than a year as once the campaiging for the interim elections in 2018 start, we will likely have lost our chance to get this done quickly. What we do in the next year is critical to dumping FATCA and CBT.
I started thinking about what they promised and have gone through the Platform. I am going to list the main things I found that relate to our issues; if anyone finds more, please post. I also have two documents that focus specifically on FATCA and RBT as well as the link to Republicans Overseas Resolutions posted long ago on their FB site. It would be helpful if others want to isolate points and phrases to focus on in communications to the Republicans.
People may. may not want to coordinate efforts but I assume there will be letters written, emails sent and so on. You may remember that Congressman Mark Meadows (R NC) introduced H.R. 5935 seeking to have an oversight hearing on FATCA repeal. Once we know the date of the hearings and who will sit on the committee, we would start there I presume. And then follow the movement of what occurs……Calls for witnesses were posted on the Isaac Brock Society indicating interested parties should contact Keith Redmond by email at FATCA_Testimonials@outlook.com
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THE REPUBLICAN PLATFORM
excerpts from sections related to our issues
RESTORING THE AMERICAN DREAM
Fair and Simple Taxes for Growth p 1
The current tax code is rightly the object of both anger and mockery. Its length is exceeded only by its complexity. We must start anew. That will be an enormous undertaking and, if it is to succeed, it must command the attention and approval of the American people………….. We will welcome all to this enterprise — to discuss, debate, challenge, and amend — so that together we can restore economic growth for the American people and, even more important, renew their faith in the future
NB:This is their promise to listen.
Our Tax Principles p 2
To ensure that past abuses will not be repeated, we assert these fundamental principles. We oppose retroactive taxation. We condemn attempts by activist judges at any level of government to seize the power of the purse from the people’s elected representatives by ordering higher taxes. We oppose tax policies that deliberately divide Americans or promote class warfare.
NB:This would deal with the bizarre idea that 877A is retroactive.
To guard against hypertaxation of the American people in any restructuring of the federal tax system, any value added tax or national sales tax must be tied to the simultaneous repeal of the Sixteenth Amendment, which established the federal income tax.
NB:This would eliminate the whole need for filing in terms of taxes as value added or national sales tax will not affect Americans abroad in any significant way.
A Competitive America p 2
American businesses now face the world’s highest corporate tax rates. That’s like putting lead shoes on your cross-country team. It reduces companies’ ability to compete overseas, encourages them to move abroad, lessens their investment, cripples job creation here at home, lowers American wages, and fosters the avoidance of tax liability — without actually increasing tax revenues. A more damaging policy is hard to imagine.
NB:Please see an excellent paper by Roger Conklin which outlines how CBT directly affects Trade.(via The Revenue Act of 1962 & The Tax Reform Act of 1976; the U.S. has never recorded a trade surplus since 1975).
We endorse the recommendation of the National Commission on Fiscal Responsibility and Reform, as well as the current Administration’s Export Council, to switch to a territorial system of taxation so that profits earned and taxed abroad may be repatriated for job-creating investment here at home. We believe American companies should be headquartered in America. We should reduce barriers to accomplishing that goal. A Winning Trade Policy International trade is crucial for all sectors of America’s economy. Massive trade deficits are not. We envision a worldwide multilateral agreement among nations committed to the principles of open markets, what has been called a “Reagan Economic Zone,” in which free trade will truly be fair trade for all concerned.
NB:Trade is important to Trump. He needs to know how CBT affects it. If they offer territorial taxation to corporations,they can offer RBT to Americans abroad.
A REBIRTH OF CONSTITUTIONAL GOVERNMENT
The Fourth Amendment: Liberty and Privacy p 13
The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause. Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, FATCA not only allows “unreasonable search and seizures” but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas.
NB: This needs no comment. Other than it might be pointed out that many of the accounts reported on FBAR and 8938, are registered government plans. Some even include government grants which are taxed. The idea that these can be used for money laundering or terrorism is simply absurd.
GOVERNMENT REFORM
Reforming the Treaty System p 26
We intend to restore the treaty system specified by the Constitution: The president negotiates agreements, submits them to the Senate, with ratification requiring two-thirds of the senators present and voting. This was good enough for George Washington but is too restrictive for the current chief executive, who presumes to bind this country to bilateral and multilateral agreements of his devising. His media admirers portray his personal commitments — whether on climate change, Iranian weapons, or other matters — as done deals. They are not, and a new Republican executive will work with the Congress to re-establish constitutional order in America’s foreign relations. All international executive agreements and political arrangements entered into by the current Administration must be deemed null and void as mere expressions of the current president’s preferences. Those which are in the national interest but would traditionally have been made by treaty must be abrogated, renegotiated as treaties, and transmitted to the Senate for its advice and consent as required by the Constitution. The United States will withdraw from all agreements and arrangements failing those standards.
NB: Bye bye IGAs
Please see Professor Allison Christians excellent paper The Dubious Legal Pedigree of IGAs (and Why it Matters)
Internal Revenue Service p 27
We also support making the federal tax code so simple and easy to understand that the IRS becomes obsolete and can be abolished.
NB: Bye bye OVDP, Streamlined, threats of penalties etc
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Here are three more direct sources of the Republican positions. I will probably do the same with these as above. But the more the merrier!
Resolution Supporting Residence Based Taxation
Resolution toRepeal the Foreign AccountTaxCompliance Act
A proposed RNC Resolution titled — Resolution to Repeal the Foreign Account Tax Compliance Act (FATCA) compiled by Republicans Overseas.
@FuriousAC
“That is what happens when criminals grab the powers of government for world domination.”
I’ll grant you one thing, it’s preferable that criminals only grab the powers of government for their own personal enrichment.
I wouldn’t be so sanguine on the subject of surveillance, however. The new president doesn’t strike me as the sort who’s particularly interested in the rule of law. Were I living in the US today, once I’d finished ensuring that every female relative who wanted one got themselves a five-year IUD while they were still available, the next thing on my list would be researching Tor and offshore VPNs and e-mail encryption.
@George
Question posed to RO 🙂
You are all concerned with FATCA and right so, but based on what i understand about the annual tax reporting, I see expatriates getting DINGED. They might make business tax terrirorial but not for wage earners and at the same time eliminate FEIE and housing exclusion if they actually go ahead with Ryans’ tax plan. Any advice on how to play this for wage earners so we don’t double our payment?
“By backing Donald Trump’s presidential run, this ragtag group of investors, financiers, and businessmen made such a long-odds bet that even their friends snickered. After his win, they may get the chance to control the levers of power in the world’s biggest economy.”
It might not be the world’s biggest economy when they get done with it.
“The Bopp lawsuit with Rand Paul which will continue into the new presidency. The new administration would need to defend what they pledged to repeal!!”
You speak Justly and Truly — that’s exactly why Canadians don’t have much hope.
That’s why the ADCS lawsuit must continue and will continue.
But sure, whatever little hope we have, let’s hope.
“and certify that you were up to date on taxes (on penalty of a $500 fine for perjury”
The penalty for telling the truth is higher, as I know from experience, confirmed by the IRS and several courts.
After the IRS informed me of the requirement to commit perjury, I obeyed on every refiled and newly filed return, and the IRS accepted them.
When the IRS coerced me to commit more perjuries in refiling three more returns, I described the perjuries to both the IRS and US Tax Court. The IRS confirmed in writing that my perjuries met their demands, and the court didn’t give a shit.
IRS employees submitted perjured declarations to US Tax Court and Department of Justice employees submitted perjured declarations to other courts (signed under penalty of perjury under 28 USC section 1746). I described them to courts and they didn’t give a shit.
US District Court for the Central District of California (in Los Angeles) denied my motion for leave to tell the truth[*] and wrote that I should sign declarations under penalty of perjury under 28 USC section 1746. So sure I can write declarations but can’t write the truth in them, so I have to commit perjury.
[* Here are two reasons for my motion. US Tax Court ruled that two of the IRS’s letters were duplicates of each other, so if I tell the truth I can be jailed for contempt of court. US Court of Appeals for the Federal Circuit ruled that the IRS rejected one of my refiled tax returns, so if I tell the truth I can be jailed for contempt of court.]
@Andrea Kennedy
You are entirely correct. While there is optimism here concerning our predicament it is entirely possible that things will go horribly wrong. It can always be worse. The CLN can be upped to $10000 and 10 years of compliance, tax credits and FEIE can be dropped, and there is no doubt that they can dream nightmarish stuff up and vote it into law. In which case it will be the final straw for many of us, me included.
Concerning your question. I stopped filing in 2002 because that year I made more than the FEIE limit and never got around to figuring it out.
I started filing again in 2015 (because of FATCA, …; filed 3 years “silently” and 6 years FBARs) and used a preparer. We didn’t use FEIE but just tax credits (I live in Belgium, where tax is income tax is much higher than it is in the US). Apparently the credits can be carried forward, so I’m accumulating some sizable ones, which will never be used, but whatever. The preparer suggested, against my instinct, listing my children. This did get me a “refund” for the year where I had not worked much and had a low income. This refund more or less covered my filing expenses, so I figured what the heck I’ll take it. An illustration of FATCA stupidity: in my case it actually cost them more money than leaving me alone.
I don’t remember the details but the FTC may cover various types of income, that could be a plus, vs the “earned income” exclusion. Note that if the Republicans cut taxes, that will be advantageous to expats in low income tax countries.
Bottom line: see if the Foreign Tax Credit works for you.
@Fred, Good morning. 🙂 I do respect folks from Belgium as being so extremely practical!! Hey, my gut too says do not take the child credits to get cash.
@Andrea Kennedy, like many around here I simply consider it wise to not spell out too much information on background. A few at ADCS know my background. As stated earlier in this thread I am intimately familiar with the legislative process in Congress, I am a creature of the plantation itself.
The 2016 GOP Platform represented the manifesto IF the voters delivered the House, Senate and POTUS to the GOP. The 2015 Manifesto for the Torries in the UK (David Cameron) had a manifesto promise of a vote on the EU and that the Government would deliver the verdict of that vote.
Paul Ryans tax plan has simply been overtaken by events that being the election. Members of Congress understood that repeal of FATCA would be impossible under Clinton so it was never included in plans such as that with Paul Ryan.
What we have as expats as an ironclad promise in very clear terms that being the repeal of FATCA and replacement of CBT with RBT.
Congress is a giant sausage making factory……and if you know anything about making sausage whilst the end product is tasty the manufacturing is disgusting.
For expats getting rid of FATCA is down to our very survival. Hence my displeasure at liberal minded Canadians who hate Trump so much they can not see clearly. It appears that the IGAs can be brought down by the stroke of the pen by President Trump as they are solely executive agreements. That would kill FATCA like a house of cards. Repealing FATCA would then be easier legislatively.
Abolishing CBT will take far more effort, it will need to be costed out and “funded.”
What WE have to do is remain pesky bees and hornets. I am doing that part by sending ten snail mail letters per week to various critters in Congress.
@Pat Moon; again you have done the usual great job dissecting the GOP manifesto, it is helping me come up with talking points in letter writing.
To my honourable liberal leaning Canadian friends; when I get home after shopping and take eggs out of a carton what do I do when I find a broken egg? I do not toss it out rather I scramble it up then and there and make a nice omelet for myself.
The GOP mainfesto for the 2016 election, an election that many said was impossible, is ripe for harvest in our cause.
@ADCS, @Pat Moon…This is solely from my experience south of the border in my prior life. Also the best defense is a good offense and you need to control the media message. I thought it was wise when you guys approached the lawyers when Trudeau won election to see if they would defend the lawsuit.
In light that the Republicans now fully control the US Government and that there are multiple party platform/manifesto locks, I think it may be worthwhile to write the Crown lawyers again. First, it will cause them to have doubt on their own case which is good. Second, it forces a political calculation on the part of government do they wish to go up in flames on something that is going down, is Trudeau too stupid to go down with the ship?
Repeat after me…..Doubt and Panic are our friends. Boy we had our share of that in the past and now the shoe has changed foot.
I drafted a rough letter below that you may wish to improve upon and share with Arvey. If it was sent then you could do a press release and have Brockers send the press release to their MPs in Parliament.
The idea is to show that defending the lawsuit is a ship that is sinking!! Are politicians basically rats? YES and what do rats do when a ship is sinking?
Some Canadian Brockers especially Liberal activists can write how Justin can claim the glory by dropping the lawsuit and he can regive the A Canadian is A Canadian speech.
Hope this helps
_____
Dear ______;
Shortly after the 2015 election here in Canada we wrote to you in order to determine if the Crown would still be defending this lawsuit.
With the earthquake of an election in the United States we are writing to you again to determine if the Crown still intends to defend this lawsuit against the Canada-United States Intergovernmental Agreement (IGA) in light of the change in US Government.
We attach and bring to your attention page 14 of the 2016 GOP Platform (Manifesto) which states that the new US Government intends to repeal The Foreign Account Tax Compliance Act.
We further bring to your attention page 26 of the manifesto and Allison Christians testimony from Parliament concerning the status of the IGA under US Law. The new US Government intends to deem the existing agreements null and void and/or abrogated and renegotiated.
We do understand that this may involve a political decision on the part of the Crown however in light of the new situation we find ourselves in that it may be in the best interest of all parties concerned if the Crown decided to stop defending this suit.
Sincerely,
_____
@George
With your inside knowledge, should it concern us that FATCA supporter Mythster Stack will have influence here, or will he change his tune should Republicans warrant it?
“Treasury secretary will be a critical post in Trump’s administration helping design a fiscal policy that calls for heavy new spending on infrastructure and a re-rewrite of both the corporate and individual tax code. Much of the work on these plans will be done out of the West Wing of the White House along with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. But Treasury will play a key role in both helping craft and eventually selling the plan to Congress and the public.”
http://www.politico.com/blogs/donald-trump-administration/2016/11/trump-said-to-narrow-choices-for-treasury-to-mnuchin-ross-231349
@George
“Hence my displeasure at liberal minded Canadians who hate Trump so much they can not see clearly.”
It’s entirely possible to hold two distinct viewpoints here, and to see clearly in doing so. One can loathe Trump and all he stands for and regard his election as a broader catastrophe, AND feel pleased that FATCA and/or CBT might somehow be hobbled by his administration.
Consider it a consolation prize – in my case a relatively small one because as a Canadian citizen and resident, US tax laws have next to no impact on my life.
I have no issue with your attempts to lobby and write letters and do whatever else you think you need to do in Washington. I won’t participate myself because I’ve chosen to act as though I’ve renounced, but we need to accept the result and the reality of his taking power, assuming of course he makes it to the inauguration in one piece. I am reminded of Churchill: “If Hitler invaded hell I would at least make a favourable reference to the devil in the House of Commons.”
@Bubbles….IMO the repeal of FATCA is a pure poliical matter and we benefit because no Republicans supported it. Thats part of Obamas downfall, at times he relied solely on Democrats to pass things or he did them under Executive Orders. In essence his legacy has no depth, the foundation is sand not concrete. His legacy died when Clinton lost, but it was because he built his house poorly without making deals across the aisle to get both party buy in. He was stupid for not getting a half dozen republicans to buy into his things as that would have cemented them.
I would naturally not want the mythster to have ANY influence but FATCA has zero parentage with the GOP so the GOP simply does not care. The mythster and all like him will be eating crow, they are after all persons that worked to support Obama policies so will have little GOP political clout. There is nothing he can do to prevent himself being thrown under the bus, if he is seasoned enough he will simply take his lumps.
I now suspect that some treasury officials will leak that they warned the administration about the IGAs being unconstitutional. Thats par for the course. Its like if you lived in a border state during the civil war you had to be adept at whistling dixie as well as the battle hymn of the republic.
With this being in the manifesto under two direct areas the outright FATCA repeal and the excecutive agreement constitutional aspect, it is NOT going to last. It can not last because the political price for backing away from the manifesto promise is too great.
The compliance industry will not be happy but that is a small subset of accounting/law and they will have to eat their shorts on this one.
Countries overseas will be pissed…..but Trudeau will blame the Cons, T. May will blame Cameron…….
Further Rand Paul will ensure that FATCA is killed…drawn and quartered, William Wallace style…..
FATCA is dead as the dodo bird but what you guys in Canada need to do is influence the politics up there to get the Government seize the glory and stop defending the lawsuit. That will become a quick victory at no further cost or risk and Trudeau can give a speech on how great he is and that a Canadian is a Canadian and his party ALWAYS stood on the side of the Charter blah blah blah!!! Yeah, its going to make you sick that young Trudeau has the makings of a big political win but………
The battle for RBT is going to be more difficult because critters in Congress can see the whales but can not see the million minnows. The problem is we may lose a few Republican Senators on the vote so we will need a few Democrats to win RBT, the majority in the Senate is thin. But in 2018……its a lock the GOP will gain Senate seats.
I believe that RBT can be pulled off in tax reform when the new Congress convenes and Trump is sworn in but that is not as easy as FATCA repeal. Killing FATCA now is simple!!!
Its possible that the FATCA win will be it……the logic being that CBT dies with FATCA…..be happy but I think we have the makings of going all the way.
Guess what……this very dark journey we ALL went through together……we had to go down this dark road to get to what I think is the ultimate destination of RBT. Think about it, without FATCA the idea of RBT would have never been on the table today.
George: “Think about it, without FATCA the idea of RBT would have never been on the table today.”
How very true this is, George, how true. Let’s hope the “idea” of RBT will soon become a *reality* for us all.
That’s a lot of optimism there, George. Kind of hard to take all in one dose after years of hope and disappointment.
Thanks, however for assuring us that we’ve seen the end of Mythster Stack’s glory days.
I don’t see the Canadian government wanting to “seize the glory” rather than letting the IGA quietly die, should it be repealed. FATCA’s too much like the OECD’s CRS that Canada seems intent on being a part of. Canada’s drunk the Obama Kool-aid and Trump will undoubtably be painted by Democrats as the big bad wolf who wants to give offshore tax cheats a pass with his efforts to repeal FATCA.
I know that you and Muzzled are not saying we should, but I’m not going to be grateful for FATCA or thank the people who brought it to us for RBT being on the table today. Too many people have been ruined, stressed, lost their citizenships and marriages to ever see it as anything more than a very unnecessary catalyst.
As optimistic as your words are, we are only seeing the light through the trees, but we aren’t out of the woods yet and there are still predators in the area. Can I go to sleep now, and someone wake me when it’s over?
Yes, indeed. The government needs to be pushed and prodded to drop the lawsuit. Give over, and NOW.
Capitulate. And then remove the IGA from the parliamentary record. It IS illegal as is FATCA.
And THEN they need to drop their defense of the Bank of Canada in the hands of the Bank of International Settlements. Returning the Bank of Canada into the hands of the Canadian people for their use in 0% interest for cities, towns , provinces and federal governments to rebuild infrastructure Hospitals, roads, schools all built with 0% interest loans until 1974 when Daddy Trudeau turned it over to a private banking cartel intent on personal profit while fleecing the Canadian people of over 2 Trillion dollars !
@Nononymous
“I wouldn’t be so sanguine on the subject of surveillance, however. The new president doesn’t strike me as the sort who’s particularly interested in the rule of law.”
Yeah, the current fella really has shown his steadfast interest in the rule of law.
“Were I living in the US today, once I’d finished ensuring that every female relative who wanted one got themselves a five-year IUD while they were still available,”
Say wha!??!?? Where in the hell does this come from?
‘the next thing on my list would be researching Tor and offshore VPNs and e-mail encryption.”
You are just now concerned about gov. surveillance? What, surveillance by your guy is OK but surveillance by the other guy isn’t? I do not what surveillance by anyone.
@dod and others.
“Some of us have US relatives living in the US who are profoundly worried about the con man Trump. (Repeal Obamacare, defund Planned Parenthood , obliterate any controls on assault weapons,deport millions, etc, etc.”
As an American Citizen, I am just as angered by foreignors telling me and my gov. what we must or must not do just as you are angered by the US telling you and your gov. what you must or must not do.
Obamacare has never had widespread support, only around 50% (+/- a couple points depending on the poll) and that was when the “If you like your doctor you can keep your doctor” and “If you like your health care plan, you can keep it.” lies were believed by many. Now, 70% of Americans what it repealed. If you prefer substandard health care paid by someone else, invite your US relatives to join you in Canada! Otherwise, it is NONE OF YOUR BUSINESS!.
I should also add the ACA was passed in a most usual manner, perhaps unprecedented manner, with out a single republican vote. Knowing that not enough republicans would support it, they decided to ignore certain laws and rules in preference to others that were not designed for such kinds of bills to force it through.
The methods were different but trickery and rule bending was just as prevelant in both the laws affecting us and the the ACA.
Read this. According to a Congressional staffer, we should be phoning and certainly not writing tweets or e-mails.
http://www.attn.com/stories/12768/former-congressional-staffer-explains-how-to-make-congressman-listen
“If you prefer substandard health care paid by someone else, invite your US relatives to join you in Canada!”
http://www.cbsnews.com/news/sarah-palin-i-went-to-canada-for-health-care-as-a-child/
Any system that has waiting lists is substandard.
My relatives in Canada have long ago said that the system there is great for colds and other such things treatable with otc drugs but said they went to hospitals in the US for anything more serious. Being just across the border, this was easy for them, hence the hospitals on the US side of the border set up to cater to wealthier Canadians who do not wish to be on a waiting list.
My Canadian relatives also said that the made frequent trips to the doctors office for otc drugs as it was “free”.
@JapanT;
A cat may look at a king.
“Any system that has waiting lists is substandard.”
My father was on waiting lists several times in the US.
I was on a waiting list in Japan.
“hence the hospitals on the US side of the border set up to cater to wealthier Canadians who do not wish to be on a waiting list”
I bet hospitals in the US cater to wealthier people of all nationalities, not just Canadians.
“My Canadian relatives also said that the made frequent trips to the doctors office for otc drugs as it was “free”.”
Maybe things have changed while I’ve been away. It was “free” for a doctor to write a prescription but I had to pay for medicines. Though I think I only received prescriptions for prescription medicines not for otc medicines, either way I paid for them.
In Japan I pay 30% of prescription medicines (same as 30% of doctors’ fees). Surely you do too?
@All
Please go to the link below to see text with hyperlinks to sources. Note that this is also being sent to various people on Capitol Hill and the Trump transition team:
Sourcelink: http://thehill.com/blogs/pundits-blog/international/306446-dumping-obamas-faux-foreign-tax-legislation-should-be-high#
DUMPING OBAMA’S FAUX FATCA TREATIES SHOULD BE HIGH ON TRUMP’S ‘TO-DO’ LIST
Title as published in The Hill: “Dumping Obama’s faux foreign tax legislation should be high on Trump’s to-do list”
BY JAMES GEORGE JATRAS, CONTRIBUTOR – 11/16/16 04:56 PM EST
President-elect Donald J. Trump has stated that among his top priorities will be revocation of President be revocation of President Barack Obama’s misguided executive orders. Among the first such items to get the ax should be a series of legally infirm international agreements to implement a monstrosity unfamiliar to most Americans, called the Foreign Account Tax Compliance Act (FATCA).
FATCA, enacted by Democrats in 2010, is an indiscriminate information dragnet requiring — under threat of extraterritorial sanctions — all non-U.S. financial institutions (banks, credit unions, insurance companies, investment and pension funds, etc.) in every country in the world to report data on all specified U.S. accounts to the IRS.
No proof or even suspicion of wrongdoing is required. The 2016 Republican Platform rightly called for FATCA’s repeal as an unconstitutional “warrantless seizure of personal financial information without reasonable suspicion or probable cause.”
FATCA supposedly is aimed at “fat cat” American tax cheats with money stashed abroad but does not include a single provision targeting actual tax evasion.
It has not yielded significant revenue recovery while imposing crushing compliance costs worldwide. FATCA’s only beneficiaries are the army of lawyers, accountants and software vendors who are making a fortune on it, with the costs passed onto consumers. It is a perfect example of the kind of wasteful, indiscriminate and counterproductive regulation Trump has promised to roll back.
Repeal of FATCA is a must-include item in a tax reform package Congress will send to President Trump’s desk in 2017. But while that package takes shape, there is something the incoming administration can do on its own authority as soon as the new president takes office, consistent with Trump’s pledge to reverse his predecessor’s extravagant abuse of his executive authority: He can nullify a series of unconstitutional fake treaties that outgoing Treasury Secretary Jack Lew (and before him, Timothy Geithner) used as a mechanism to implement FATCA.
This requires some short explanation. In addition to its other defects, FATCA is also one of the worst-drafted pieces of legislation this veteran of over 17 years working at the U.S. Senate has ever seen. Evidently no one noticed prior to enactment that the law’s central requirement — that hundreds of thousands of foreign firms outside of U.S. jurisdiction in almost 200 countries turn personal data directly over to the IRS — would be unenforceable under most countries’ privacy laws. Even supporters of FATCA concede it is “wholly unachievable” as written.
Accordingly, after FATCA became law, the Obama Treasury Department figured out that the only way it could work at all would be to pressure foreign governments to enforce it against their own citizens and to abrogate their domestic privacy protection laws to do so.
This was done through a series of bilateral “intergovernmental agreements” for which Treasury has no statutory authority, under either FATCA itself or any other law. While these agreements read like treaties and are duly ratified as such by foreign “partner” governments, they are not submitted to the U.S. Senate for its advice and consent under the U.S. Constitution.
In short, these agreements are purely distilled examples of Obama and his underlings using their respective pens and phones to create the appearance of legality where none exists. Dozens of such agreements have been signed and more are in the works.
But wait, it gets even worse! As a sweetener to induce countries to agree to sacrifice their sovereignty and to place their financial sectors under Internal Revenue Service (IRS) supervision, Treasury offered, also without statutory authority, “reciprocal reporting” from domestic U.S. institutions to foreign governments.
This would hit U.S. banks, credit unions, insurance companies, mutual funds, etc. with costs comparable to those FATCA inflicts abroad, extracting billions of dollars from American consumers and taxpayers and spurring job-killing capital flight from the United States.
Several attempts by the Obama administration to sneak through legislation for FATCA reciprocity have been blocked in Congress. But as long as the law remains on the books and the implementing agreements remain in force, they hang like a sword of Damocles waiting for the next Democratic administration to press forward.
The illegitimate FATCA agreements include a provision for one year’s notice of termination, which Trump’s Treasury secretary can issue upon taking office.
Even better, the Trump White House’s Office of Management and Budget could also immediately issue a determination declaring the agreements null and void on the grounds that the Obama administration had exceeded its legal authority in making the agreements in the first place.
That would effectively gut FATCA and put foreign governments on notice that the U.S. is pulling the plug on it, pending enactment of a tax reform bill that includes final repeal of what I have called “the worst law most Americans have never heard of.”
James George Jatras is a former U.S. diplomat and foreign policy adviser to the Senate GOP leadership. He edits http://www.RepealFATCA.com and recently published a major study, “How American Media Serves as a Transmission Belt for Wars of Choice.”