AFL-CIO backed Citizens for Tax Justice defends FATCA
http://www.ctj.org/taxjusticedigest/archive/2013/08/surge_in_tax-wary_us_expats_re.php
In its latest attack on the Foreign Account Tax Compliance Act (FATCA), the Wall Street Journal describes in ominous tones the “record” number of individuals who renounced their U.S. citizenship in the last quarter, supposedly driven by FATCA’s reporting requirements, which are designed to prevent tax evasion.
What scary headlines about a “surge” in expatriations leave out, however, is what a miniscule number it really is. Even the six-fold increase this quarter compared to the second quarter of last year meant that only 1,130 people renounced their citizenship in the second quarter of this year. To give some context, this number represents less than 0.02 percent of the estimated six million Americans that live abroad.
“Surge in Expatriations to Avoid Taxes!” “US expatriates renounce citizenships at record rate!” Pretty alarming headlines. News coverage of what complying with FATCA actually entails has been misleading and would make you think that the rise in renunciations is driven by the “overly burdensome” rules that are financially crippling US citizens living abroad. The fact is, the primary component of FATCA affecting individuals is the requirement that U.S. citizens with $50,000 or more in foreign financial assets (which does not include housing or other basic non-financial assets) simply have to attach a disclosure statement about their accounts in their yearly tax return.
Whatever inconvenience is caused by these requirements is far outweighed by the benefits to the U.S. and its law abiding taxpayers. According to the Congressional Joint Committee on Taxation (JCT), FATCA’s anti-tax evasion measures are estimated to raise $8.7 billion (PDF) over their first decade of implementation (and JCT has a history of underestimating such tax enforcement measures, too.) Considering that the U.S. loses an estimated $100 billion (PDF) annually due to offshore tax abuses, rather than seeking to curtail FATCA, Congress should expand on these efforts through legislation like the Stop Tax Haven Abuse Act in the House or the CUT Unjustified Loopholes Act (PDF) in the Senate.
While the emigration of every single wealthy person abroad is makes big news (see, for example, coverage of Facebook billionaire Eduardo Saverin or singer Tina Turner), the reality is that the number of renunciations is negligible – especially compared to the number of new citizen naturalizations each year. In fact, 503,104 people have been naturalized in the US since the start of Fiscal Year 2013, which means well over 250 people embracing US citizenship for every one person renouncing it over the past several months.Asking the few and largely wealthy Americans with substantial offshore financial assets to do a little extra paperwork is not unreasonable when we know that cracking down on offshore tax evaders will bring in revenues to invest in things like roads, schools, healthcare and a quality of life that make the US so attractive to aspiring U.S. citizens.
Look at what ExpatForum.com says these days. Remember them censoring what we had to say?
What we had to say being censored at ExpatForum.com led us to form the Isaac Brock Society!
They have now posted information from American Citizens Abroad. Are they waking up?
American tax officials accused of targeting expats
The complete ACA letter referred to is ACA Final Letter to Treasury-IRS, July 19, 2013.
G20 Nations Agree to Share Tax Info By 2015
The Globe and Mail reports that the players at the current G20, when not posturing about the coming US war on Syria, have agreed to share tax information.
Why?
Well, we know why. Tax cheats! They are everywhere.
One positive in the article is that it mentioned FATCA and the privacy concerns Canada has about it.
Representative @AlanGrayson #DontAttackSyria Please consider signing his Petition
Watch this PBS Newshour interview tonight with Representative Grayson from Florida.
http://www.youtube.com/watch?v=cFLbf0RWmXU
His petition is here: http://dontattacksyria.com/
Syria is uniting two Florida Representatives on opposite sides of the spectrum: Posey and Grayson. Maybe we could get Representative Grayson to see FATCA as an attack on the Globe and join with Representative Posey on HR.2299 to stop that too. I know, wishful thinking. That said, I encourage you to support Grayson on this one. Send Hallmarks, not missiles.
Signature count now stands at 55,807 Help push it past 100,000
Nature abhors a vacuum – and so does the FATCA advice industry
In a new article for International Advisor, David Howell, Director, Guardian Wealth Management, explains in plain language how the untold human suffering to follow in FATCA’s wake will provide boundless opportunities for FATCA-ready wealth advisors. Every cloud indeed has a silver lining, perhaps millions of them…
CBT versus RBT – a Counter Offer
UPDATE: September 7, 2013:
Interestingly, Mr. Harvey’s paper has been removed so the original link that Victoria provided no longer gets you to his proposal. You also must now register for the site, which I did. Luckily, Em has come to the rescue as she saved it before it was removed.
May I draw your attention to this interesting article by J. Richard Harvey called:
World Wide Taxation of U.S. Citizens Living Abroad – Impact of FATCA and Two Proposals.
In a nutshell Mr. Harvey has seen that there are “issues” with the perfect world of citizenship-based taxation. He admits that many Americans and Green Card holders abroad are adversely impacted by the marriage of CBT and FATCA. However, he is not willing to let us off the hook and he has a few criticisms of ACA’s Residence-based taxation proposal.
He has two proposals of his own that are worth examining – not because I think they are good solutions but because I think they represent a kind of counter-offer. “You folks want X? Will you settle for Y?”
Here they are:
1. Keep the current CBT system with modifications (increase the FEIE, for example)
2. Move to RBT with “safeguards”. I did not like what I read at all – he is proposing to restrict visits to the US for anyone who expatriates and he wants to create a true “departure tax regime.”
He is also suggesting some relief for certain categories of Americans abroad. This doesn’t go far enough in my opinion. I would like to see a definition of “significant percentage of their lives” spent abroad. What does that mean exactly? His opinion is that only in a few very sympathetic cases (accidental Americans) all others (people who have lived abroad for 20 years, for example) should NOT be entitled to any relief at all.
What is encouraging about the paper is that he acknowledges the problems (a kind of progress). However, he is still in the mind-set of punishing those “rich tax evaders” and does not take into account the high price the US will pay if it continues along this path of trying to enforce CBT. And though he admits that there is a high percentage of middle-income expats that are being harmed because of government actions to demotivate the 1% from expatriating, he still feels these measures are justified. Mitigation, he says, is the key but I don’t think he goes far enough and I think he completely misses a very important motivation for middle-class expatriates – getting out from under all that paperwork and the associated costs for cross-border experts.
What do you folks think?
2011 Message for #americansabroad in Canada – how does it look two years later?
#Americansabroad in Canada driven to divorce from their country http://t.co/7Z8NrFZIs3 – Revisit this article and comments from 2011
— U.S. Citizen Abroad (@USCitizenAbroad) September 4, 2013
The article referenced in the above tweet was published in the fall of 2011. At the time it had 809 comments. Comments have been disabled.
Looks like things have gotten a lot worse for U.S. citizens abroad.
FBI reverses one denial of renunciant’s firearms purchasing privileges
The FBI is generally quite timely with their monthly reports on the National Instant Criminal Background Check System, and this month is no exception: the latest report shows 23,186 people in the “renounced citizenship” category, up by 278 from last month and 2,540 since the beginning of the year; this is roughly 91% higher than the 1,333 recorded in the same period last year. However, the real amusing news comes from the federal denials report: the number of people ever found ineligible to purchase firearms after hits in NICS identified them as renunciants decreased from the 58 reported earlier this year down to 57. My guess is that someone was misidentified and had their denial overturned on appeal.
This serves as a reminder that even the best-maintained systems are only as good as the data that goes into them. The FBI takes its mission of gun control seriously, and due to the oddities of 1960s politics that mission includes maintaining a database of renunciants. The IRS, in contrast, does far sloppier work with their own list of ex-citizens in the Federal Register. But of course, both agencies ultimately rely on CLNs forwarded by the State Department, which has never been very happy with any outsiders getting a view into statistics on loss of U.S. citizenship (as we saw from their denial of Global News‘ FOIA request). The poor coordination between the FBI and State shows up in the statistics: in some months the FBI seems to have received only a trickle of CLNs, or none at all, whereas in others the State Department sends over a huge backlog relating to some unknown period.
Recently, Shadow Raider came across a 1990 report from the Bureau of Justice Statistics which sheds some light on the early history of NICS and the role the State Department played in identifying renunciants; the relevant section starts at page 71. This goes some of the way towards answering the question of why twelve thousand renunciants were added to NICS in 2000, though it doesn’t explain other large additions like the three thousand last October.
Renouncing U.S. Citizenship – Second thoughts
Renouncing U.S. Citizenship – Second thoughts
You better be careful what you wish for, you must might get it!
The internet is abuzz with discussion about U.S. citizens wishing to expatriate.
So, far the comments have been dominated by:
– those who desire to to renounce U.S. citizenship
– those who are desperate to demonstrate that they lost their U.S. citizenship when they became citizens of another country
– those who are basking in the glow of knowing they are no longer U.S. citizens
But, there is anther side. Are there people who renounced U.S. citizenship and are now regretting it?
I received the following message from somebody who recently renounced U.S. citizenship:
I renounced US citizenship for a variety of reasons (a year ago) and am feeling more and more like did I make a mistake. I think things are horrible in the US but it seems so hard to find a place that is both open to immigrants and that offers me some of the opportunity I definitely experienced in the US. My family wants me to go back so much, but I really am opposed to so much of what the US is doing both in the US and without. But I am really struggling with doubts and fighting depression over my situation.
Any advice for building a support network? Thank you so much.
What are your thoughts on this? What advice would you give this person? Should there be a support group for those who have renounced U.S. citizenship? Many believe that renouncing U.S. citizenship will be the end of their problems. Will it be the beginning of a new set of problems?
Your thoughts?