Category Archives: Issues regarding US persons abroad

This comment by Jim Jatras is too important to let it be lost in our comment stream:

To Tim, Petros et al.at IBS:

The organizers at George Mason Law School inform me that the video of the event will be posted in a few weeks.  Yes, it was great to have a chance to offer a few points directly to Prof. Harvey and Jesse Eggert at Treasury.  Once the video is up, we can let viewers to decide who might be a flake and who is not.

Bottom line from the event is that it confirmed my sense going in of FATCA’s extreme political vulnerability and ripeness for repeal — if financial institutions (both US and non-US) and foreign governments would stop acting as, in effect, FATCA enablers.  Most significant: Prof. Harvey, Mr. Eggert, and pretty much everyone admitted in substance that FATCA as written can’t be enforced.   IGAs (intergovernmental agreements) are essential for the US to implement what would otherwise be an unenforceable regime.  No one pretended that FATCA could be successfully enforced solely as a unlilateral and direct U.S. imposition.  Either Washington will be successful in pressuring or tricking other countries into enforcing FATCA on themselves, or the whole scheme collapses.

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October 23, 2012,
Singapore

I never thought I’d see the day. Two years since the HIRE Act, FATCA, and Dodd-Frank became law and threw global finance into a tailspin, two foreign banks have finally stood up to Uncle Sam…

Bottom line, it’s more reporting, more registration, more paperwork, more hassle…

Yet just yesterday, DBS Bank in Singapore stood up to the US government, indicating that they would not be registering with US authorities for at least for one Dodd Frank provision pertaining to swaps. Nordea Bank in Sweden made a similar statement.

This is an interesting turn of events which could evidence a bigger trend.

We’ve already been seeing signs that US financial influence is waning. The dollar is being slowly displaced in international markets. Countries around the world are starting to increase their reserves of China’s renminbi, as well as accept renminbi in international trade settlements.

We’ve also seen foreign companies like McDonalds issuing debt denominated in renminbi, the launching of renminbi-denominated commodity futures contracts, and the trading of renminbi assets in foreign exchanges.

All of that used to be dominated by the dollar. But now the dollar’s share is gradually fading.

If more banks follow DBS and Nordea in standing up to the US government, it will be the clearest sign yet that this trend is taking hold… perhaps accelerating the dollar’s decline…

http://reichert.house.gov/press-release/rep-reichert-demands-answers-fatca-implementation-irs-commissioner

This is first time I have seen any member of Congress go public on FATCA to their constituents. Excerpts:

Rep. Reichert Demands Answers on FATCA Implementation from IRS Commissioner

“Whether or not we agree on the approach that FATCA prescribes – which now allows the IRS to enforce the disclosure of personal private information about US persons from foreign companies – it is now clear that the implementation process of FATCA involves the IRS acting with an implied license to determine a new direction for global tax policy,” wrote Reichert. “I have talked with constituents, had discussions with international companies who are looking to comply, and many who wonder how successful these new policies will be in achieving their intended consequences.”

In the letter, Reichert, a member of the House Ways and Means Committee, asks Commissioner Shulman to provide information on how the IRS is taking into consideration the potential effects on U.S. businesses and persons when negotiating IGAs, and asks the IRS to provide information on these considerations as Congress looks toward comprehensive tax reform.

I find the “I have talked with constituents” to be quite interesting clearly there are a lot of people registered to vote in Bellevue/Issaquah effected by FATCA. He also has a link to the letter he sent to Shulman CCed to Tim Geithner.

http://reichert.house.gov/sites/reichert.house.gov/files/FATCA%20LetterFINAL.pdf

The Debate is here…

http://live.freeandequal.org/stream.html

Wow. No known video exists but supposedly a symposium was held at George Mason University on Monday. I am little bit stunned to see these three on stage together. I would think Harvey and Eggert would think of James Jatras as a flake(although Jatras has been around Washington for a long time in different roles). Additionally a fourth panel member attended from the German Embassy in Washington DC. I have to say while if I had known about I wasn’t going to fly down to Washington, DC to attend on the otherhand I would pay big money to see this on Pay Per View.

http://www.georgemasonjicl.org/fall-2012-symposium/

From the Wilderness made an insightful summary of the comments at Wall Street Journal article.  So I offer them here as a new post.  Afterwards, I will provide a video by Doug Casey of Casey Research, a firm that specializes in helping American clients to diversify their portfolio–“diversify” means finding investments in countries outside the USA.  Finally, those who believe that the US dollar can survive trillion dollar deficits (such as Andrew Smithers) should have a look-see at petrogold trade between Iran and Turkey.

The comments on the WSJ article are most insightful and made me to reflect a bit about the large gap between the “homelanders” and ex-pats points of view.     

Homelander perceptions of ex-pats: 

1. Ex-pats are a bunch of ungrateful whiners.

2. As citizens of the greatest nation on earth, ex-pats must pay their “fair share” of taxes.

3. Ex-pats have the right to live and work in the US any time they want.

4. The US will come to the rescue of ex-pats if they are in need.

5. Americans living outside the US are suspicious and must be tax evaders .

6. Don’t let the door hit those “traitors” who renounce their citizenship in the @$$.

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I was just listening to the debate and again President Obama has repeated his rejection of Simpson/Bowles position that America move to a territorial taxation system for U.S. corporations.  I guess that the whole Simpson/Bowles commission was a waste of time since neither the President nor the Vice President are behind one of the major tax reform proposals that this commission made.

The president is wed to a taxation system that forces companies to pay taxes twice on the same income.  When you see just the kind of brick wall that U.S. politicians have put up with regards to taxation it is obvious that rationality and morality will never meet each other in the U.S.’s government.

This hot off the press just 15 minutes ago: http://www.tdg.ch/monde/americains-suisse-roulent-barack-obama/story/20074317  The article makes no mention of the plight of US Persons abroad as to double taxation and draconian and privacy-invasive reporting and penalty policies–issues that are very important to many USPs in Switzerland in light of this election.  The article only seems to suggest that Swiss bank secrecy will become a minor issue if Romney is elected!

The president of Republicans Abroad seems to suggest that the majority of Americans in Geneva are working for international organizations and consequently vote Democrat, while suggesting that Republicans tend to be in the private sector.  My speculation is that many Americans in Geneva have expat packages (so-called “assignees” to local offices of large US corporations) or are otherwise insulated from the effects of double taxation (UN tax-free status, which as far as I know requires declaring only US income to the US– the UN pays tax to the US for the US Person UN officer).

Translation from the French:

Americans in Switzerland roll rather for [tend to support] Barack Obama

Democrats and Republicans are conducting their campaign in Switzerland in anticipation of the American presidential election.  Though it is impossible to know exact figures about who Americans vote for, the trend may be towards the democrats.

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Here is an interesting post about the disabled in America, that I read today on the Huffington Post’s website.  The medical and financial situation for disabled Americans isn’t at all good under the present Medicare system and even if ObamaCare should get fully implemented it is not going to get materially all that much better. Since basically the Obama plan only extends Mediare coverage to more people but does little to improve the level of benefits.

Yet in spite of the extremely poor system of support that exist in the States for the disabled the U.S. Congress feels absolutely no degree of human shame about forbidding disabled expats from accessing the supreior social and taxation supports that may be available to them under more compassionate governments. The flip side of this Congressional intransigence is that if your level of government services is not as good as what is provided for in America, the U.S. government will not send funding to you so that you can have the same level of benefits as you would have if you did live in America. Instead their message to you would be that you must move to America if you want those benefits.

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