Introduction
The Isaac Brock Society and “Brockers” generally were ahead of their time in realizing the danger and effects of the extra-territorial application of U.S. laws. The pushback against the U.S. imposing taxation on Canadian residents and FATCA were really recognizing the importance of a free and independent Canada. Brockers were understanding a reality that it would take the rest of the world longer to see.
Part A – Canaries in a coal mine
In the early years of Brock it was said that:
“All homeland Americans need to understand their future is to see how the United States treats its citizens abroad.”
This can be considered from the perspectives of (1) the emotional fallout and (2) the actual substantive tax and compliance rules. Both are shocking!
(1) Emotional fallout
Most Americans abroad know that the U.S. treatment of its citizens abroad is shocking and unconscionable. In the words of Toronto psychologist Dr. Donald Young:
For those U.S citizens who have elected to live abroad, be it in Canada or elsewhere, American tax policy can place such individuals in a position that engenders constant and severe emotional stress. The vindictiveness of the U.S. position, its unfairness and irrationality, the fact that neither the U.S. government nor tax and legal experts even know the rules and how to rationally proceed, and the constant threat of economic calamity are all factors that can be emotionally devastating. From my observations over the years in people ensnared in this situation, and I would count myself among us, it is common to experience substantial anxiety, depression, feelings of panic and foreboding, guilt over being branded a cheat and a criminal, fear, anger, resentment, and general feelings of helplessness and confusion. I have in fact seen some people who have become virtually suicidal at the prospect of losing everything for the “crime” of not paying taxes to a country they have not lived in for decades if ever at all.
I am a clinical psychologist licensed to practice in Ontario with 35 years of experience. I have also been appointed an assistant professor in the Department of Psychiatry at the University of Toronto. In recent years I have had the opportunity to discuss and address these problems with many individuals who are are trapped in these tragic circumstances.
Along with John I am happy to make myself available in any of the forums or meetings that will be forthcoming. There is always strength in numbers and sometimes much can be gained by discussing common problems together in a group. I am also happy to chat or work with people individually with these concerns.
Dr. Young describes the emotional fallout experienced by Americans abroad.
(2) The tax rules that actually apply to Americans abroad
Yes, Americans abroad are subjected to U.S. citizenship taxation. But, Americans abroad are actually subjected to a more punitive form of taxation than are U.S. residents. Americans abroad were the early recipients of a “form” (pun intended) of viciousness from the United States that both resident Americans and the rest of the world are now experiencing.
Sooner or later how the U.S. treats Americans abroad will be extended to other groups (and countries
Americans abroad saw the viciousness first and experienced it first. They had their collective OMG moment in 2011. Now the rest of the world is having its collective OMG moment.
2025 – The Erosion Of Trust And The Year Of The International Oh My God (“OMG”) Moment
In a real sense, the original Brockers were “canaries in a coal mine“.
Part B – The cost to America – We can afford to lose money, but we can’t afford to lose reputation – Warren Buffett
The strength of a country is based largely on the strength of its alliances. It’s obvious that the current administration has accelerated the decline in America’s reputation. It has accelerated the decline in the trust that people and other countries have in America.
In short, the United States of America is eroding its most important form of capital which is trust and reputation. This was evidenced (in part) in Prime Minister Carney’s Davos speech.
The Green Grocer And The Power Of The Powerless – Mark Carney’s Speech At Davos
Part C – Additional Commentary – A fascinating interview with Oxford professor Margaret MacMillan
This is a great interview from outside the USA looking in.
It’s too bad that so many Americans can only see America from the inside looking in.