As previously reported here, the Caymanian Compass recently conducted an online poll which asked the question: Should Cayman agree to the US’s tax-collection “FATCA” program?  Nearly 58% of respondents declared “No”.

Responding to such a clear rejection of FATCA, Gonzales Jalles of Cayman Finance subsequently published an article which neatly sums-up the conflicting feelings within lucid members of the legal and finance communities worldwide – and just how little it takes to soothe their tortured souls.  Mr. Jalles begins his tale thusly:

Almost 58% of voters in a recent poll suggested Cayman should reject FATCA.  Don’t get me wrong, my stomach says the same, but I’m going to try to explain why we cannot.

***

If the Cayman Islands Government and the banks wanted to escape FATCA, they would need to stop using the US dollar all together, and we would need to create a new currency system where our currency is not pegged to the dollar.  Given the UK and Europe are going the same way, we could not peg it to those currencies either.  Therefore, we would need a floating currency, which will automatically mean the complete disappearance of our international financial industry that represents over 50% of our GDP and government revenue.

***

If you still think the Cayman Islands Government and local institutions should have said “no”, I give up.   You should move to Cuba, probably the only country in the world that might remain completely out of it.

Lucky Cuba. Driving Detroit museum-pieces forever seems like a small price to pay for avoiding FATCA.

Jalles then goes on to deliver the most misleading and pointless FATCA analogy I’ve heard this year:

Let’s say the police catch you speeding and driving under the influence.  You are going to pay a fine and be riding a bike for a while.  Do you accept it or do you refuse to pay the fine and keep driving, making things worse for yourself?

Apparently refusing to bow to FATCA is the equivalent of both speeding AND driving under the influence – who knew?

Finally, Mr. Jalles concludes with this passionate confession:

Maybe a few lawyers and accountants like FATCA as they will see more business, but most of us don’t.  It’s like a hurricane heading straight at us — ignoring it is not an option, we need to accept it and get ready.

In other words, what’s left of my soul says this is bad, but not bad enough to try to fight it so might as well make some money out of it like everyone else and forget about all that collateral damage stuff.  Those people are screwed anyway so why even bother?

And that is today’s lesson in how FATCA capitulation works – think locally, act globally.

Expect numerous bravura repeat performances in Canada any day now as the equally tortured souls at Finance and the CBA peddle their toxic IGA to Mansbridge while crocodile tears flow for the cameras.

I have been meaning to post these here for people who would rather download them themselves and have them printed locally rather than request me to mail them out. These are a bit different in design than the ones I had litho printed, to accommodate the digital printing that would be required.

Please respect the work of the authors and designers and do not make any changes to the wording or the layout.

Feel free to print the documents, or to save them to a USB drive and have them printed at a professional printing place like Office Depot or Kinkos.

FATCA_HR

FATCA_NOTMYTHS_HR

(Note that the “Not Myths” document is intended to be a double-sided folded brochure, so the cover is on the right hand side of page 1.)

FATCA_NOTTXCHTS_HR

The need to get this information out to the Canadian public couldn’t be more urgent! So please try to blanket as many coffee shops, libraries, book stores and public light poles as possible. Another suggestion (something I have done and will continue to do) is to go door to door in my own neighbourhood and put them in peoples’ mailboxes.

Thanks,

GwEvil (Gwen’s new handle)

The Vaud League (cosponsor organisation for the Anti-FATCA Referendum) has a very telling article on its website entitled “FATCA Kesako ?”
Continue reading →

garbo999 suggests this as a separate post. Good idea!!

Sorry for this thread hijack but I have a comment about a Bloomberg article from yesterday. Perhaps this might be worth a separate thread? Accidental Tax Break Saves Wealthiest Americans $100 Billion

The article describes how Congress created a complex law targeting a certain class of the population to make them pay more tax. However, the rich folks who were targeted simply hired expensive lawyers to get around the law. Realizing that the same rich folks take frequent advantage of their 1st Amendment-mandated right to bribe Congress as they see fit, Congress refuses to modify the law.

garbo999 asks:

Anyone see the same future for FATCA? The rich tax dodgers will find myriad ways to escape FATCA while of course all the massive negative effects of FATCA for the little guy will remain in place (not to mention the billions that non-US financial institutions must spend to implement this lunacy as well as the loss of respect that goes with shoving a law down the throat of every other country in the world with an obviously false promise of reciprocity).

A related link at bloomberg: Wealthy N.Y. Residents Escape Tax With Trusts in Nevada

The United States federal officials demonstrate their lack of respect for the rest of the world:

India Is Furious Over US Strip Search Of Diplomat Facing Fraud Charges

The “fraud charges” consist of this:

US authorities say she not only paid a domestic servant a fraction of the minimum wage but also lied in a visa application for the employee, an Indian national who has since absconded.

Blaze has written a FATCA Christmas letter and Wish List to Canada’s Finance Minister Jim Flaherty, who is actively “negotiating” an IGA with the U.S. This was originally posted on Maple Sandbox http://maplesandbox.ca/2013/fatca-christmas-letter-to-jim-flaherty/#comments and is now posted here on Brock:

Dear Minister Flaherty:

You and your Conservative colleagues have again confirmed Santa’s Canadian citizenship. But, do you know the United States is also claiming Santa as theirs?!? They insist he lives in Alaska—despite his red and white suit and his HOH OHO postal code in Canada’s North Pole.

This is typical of the Americans. They are determined to turn as many people in the world as they can into “US persons.” So they snoop around like kids before Christmas, trying to find loot for U.S. Treasury and Internal Revenue Service.

Don’t let the Americans claim Santa. Don’t let them claim up to one million other Canadians and their families either.

We are as Canadian as Santa. Perhaps even more so because many of us swore an Oath of Allegiance to Canada.

So, I’m sending you this holiday letter to tell you what is on our Christmas wish list (see attached).

We hope you will give us a joyous Christmas by granting our holiday wishes.  If you do, we wish you and your colleagues a very Merry Christmas.

If you don’t, you will subject us to a third Christmas with the IRS Grinch and FATCA Monster threatening to run away with our private financial information on our Canadian earned, saved, invested and taxed money. In that case, we can only wish you a lump of coal in your stocking.

We have been very, very good Canadians. Please don’t be naughty and give away our rights to a foreign government.

Lynne Swanson
 Maple Sandbox
 (e-mail address was provided)

HERE IS THE WISH LIST THAT WAS ATTACHED:

1.  Protection from the IRS Grinch who is threatening our honest lives in Canada with his partner the FATCA Monster.

2.  An assurance from you that all Canadian citizens have the same rights regardless of where they were born.

3.  A statement from you that Canadian banks must follow Canadian laws.

4.  A promise from you that Canadian banking, privacy and human rights laws will not be changed for a foreign government.

5.  Respect from you and the Conservative government for Canada’s Charter of Rights and Freedoms.

6.  A reply to the Open Letter that Maple Sandbox and Isaac Brock Society sent to you exactly one month before Christmas asking a simple question: Do all Canadians have the same rights under Canada’s Charter of Rights and Freedoms.

7.  A reply to Order Paper Questions from Liberal MPs Ted Hsu and Scott Brison.

8.  Assertion of Canadian sovereignty over Canadian laws and Santa’s home in the Arctic.

9.  An announcement that Canada says “NO” to a FATCA IGA that compromises our rights.

10.  A Happy 2014 free of demands from a foreign government.

http://maplesandbox.ca/wp-content/uploads/2013/12/FATCA-Christmas-Letter-and-Wish-List.pdf

http://jamaica-gleaner.com/gleaner/20131211/lead/lead71.html

The Canadian government surely is not going to sit by and see its neighbour collect billions from its citizens living abroad and do nothing. So while Canada doesn’t have its own FATCA yet, it does have a FATCA-like system that went into high gear earlier this year after the budget was read.

The country is trying to collect money from the many Canadians living abroad and Canadian residents.

In the 2013 budget, the Canadian government instituted a new requirement for certain financial intermediaries to report to the Canadian Revenue Agency – the Canadian equivalent of the American IRS – all electronic funds transfers of $10,000 or more, and instituted a new whistle-blowing programme to stop international tax evasion.

As part of the new initiative, Canada has foreign-income verification reporting for 2013. If a Canadian who is resident in Canada owns the cumulative property, in excess of $100,000, at any time during the year, they must declare it. Failure to do so will result in a fine of $25 per day.

The properties that the Canadian government is interested in are: bank accounts, shares in foreign corporations, shares of Canadian corporation on deposits with foreign brokers, debts owed by non-residents, interest in partnership that hold specified foreign property, interest in foreign mutual fund, foreign lands and building and tangible and intangible properties located outside Canada.

FATCA is one of the most far-reaching tax laws that was ever envisioned by any government. Its effects are deadly and will surely reduce tax evasions, by not just Americans, but citizens of other nations, as we can see many countries, such as the UK and Canada, are adopting some FATCA-like model to improve their budgets, from money that may be offshore.

While some people in the United States Congress believe FATCA should be repealed, that is unlikely to happen, given the amount of money that the IRS has collected since FATCA became law in 2010.

The following are ramblings as I wonder the group most represented here, those who are so ‘gobsmacked’ and talk about their similar reactions after their OMG moments and the reality of what the U.S. requires of them.

This largest group of us seems to be:

– 50 years and up,
– generally financially responsible, and
– ALL here, completely tax compliant where we live.

This experience for us has dispelled ALL our beliefs and assumptions, ALL of them. What an awakening, our OMG moments.

This experience is so hard for this group of people to deal with. As people who have tried to follow the rules, we don’t comprehend how we are being most hurt. We see our lives being destroyed at the hand of the country we once believed in. We are at the end of the building of our lives and planning for leaving something to our offspring. We also have the burden of realizing (as most of us didn’t know) we have passed onto our children a U.S. citizenship — an automatic gift, rather than a claim to a U.S. citizenship from their birth to parent(s) who had been born in and lived in the U.S. for a requisite number of years. We feel a whole lot of guilt about that — and our children are actually the other group most affected by the realization of U.S. tax and reporting responsibilities. For them (and for us, their parents), it is almost incomprehensible. Continue reading →