Aboard FATCA Express
By Karl W. B. Schwarz
|The United States is one of the few nations on Earth, and
by far the largest one with the largest economy for now, that attempt to
tax its citizens based on citizenship rather than residency of where they
live and work.
Said another way, if an American is living in Frankfurt Germany and works for Deutsche Bank, the US citizen has to pay taxes to the IRS and under a Tax Treaty (when they exist) the US then shares up to 50% of that tax back to the nation where the US citizen lives and works.
It is a tedious, laborious, intrusive process that recently became more so due to a new law that most Americans have never heard of… FATCA.
As with all things that emanate from Washington DC there is yet another underhanded agenda as to why they push that with an insistence and a vengeance. It is called spying, which the entire world now knows the ludicrous extent the USA does that to friends, allies, foes and citizens alike.
If you watched the Edward Snowden interview with the German journalist, if NSA or CIA want to spy on foreign companies for US gain they do so. It is not just foreign leaders and even G8 and G20 members that have to make sure they never turn their backs on the deceitful morons in Washington DC and be victimized not only by spying and manipulation but also outright theft.
If you think CIA and NSA are all about looking for terrorists, well… you need to stop drinking the RNC Kool Aid and the DNC version of Kool Aid. The agenda is much more expansive than the bogus Global War on Terror. The fabric and glue of the American Empire are collapsing on all fronts.
There are about 6.5 million Americans living abroad, which is about the same population as the State of Wisconsin. There are not just a few of us; there are millions of us.
It is no secret that Washington DC blows through money like an alcoholic at the craps table (with about the same end results) and is desperate for tax revenues to support the fiscal irresponsibility (insanity) that Congress and the White House are infamous for demonstrating.
The US Embassies abroad are wringing their hands because there is a new phenomenon of US citizens renouncing their citizenship and getting passports from other nations. The reason is the stupid new law Obama and Congress put into effect called FATCA. This one goes well beyond ill-advised to stuck-on-stupid territory. Yet another acronym from DC and this one means Foreign Accounts Tax Compliance Act and was a dimwitted tag along to the pretense jobs creation bill they labeled the 2010 H.I.R.E. Act; i.e. Hiring Incentives to Restore Employment Act.
Robert W. Wood is doing the best reporting on this matter of anyone I have seen in the USA.
This new law pretends to be a tax law but is really an attempt by the USA, Department of Treasury and IRS for force and bully every foreign bank, insurance company, pension fund manager and even corporations and individuals to comply with FATCA and how the USA has defined FFI, or Foreign Financial Institution. In typical DC fashion they have extended how they define ‘FFI’ to ludicrous extents.
I have a copy of a letter that was sent by EuroClear to the Department of Justice and IRS. They agreed to disclose any transactions that involve an American citizen but as to the disclosure of the $23.6 trillion in other transactions they handle for non-US citizens it was a terse ‘NO WAY’ as to complying with FATCA.
Tina Turner is married to a Swiss citizen, lives in Switzerland and has renounced her citizenship and passport. Recently one of the co-founders of Facebook, that company that was co-funded by the CIA venture capital arm In-Q-Tel to spy on anyone foolish enough to be on Facebook, moved his billions to Singapore and renounced his US citizenship. Eduardo Saverin renounced his US citizenship in 2009 even before FATCA was implemented. Apparently he knows what Stupid in DC looks like.
Why? Because to even comply with FATCA this idiotic new law has pushed up the cost to foreign entities and US citizens living outside the USA to ludicrous and ridiculous expenditures in time and money.
For example, say my income were $91,500 in Switzerland that is exempt from IRS tax, and includes my cost for private health care insurance since that is mandatory in Switzerland. Even the exempt amount means that my bank(s) and I have to file a mountain of paperwork and go through disclosures that are somewhat akin to going to the proctologist.
The cost of compliance for just the exempted income of $91,500 plus mandatory medical insurance could be as high as $10,000 per year. Most of us are seriously thinking it is time to recognize that a US passport is now a liability and our time is worth much to us. The folks in DC do not care how much time or money it costs Americans or foreigners. They think they have the right to snoop, pry and know everything about every financial transaction in the world. Few are playing along with this latest US demand and attempt at spying.
Under the pretense that my bank or I, or my company, or anyone else outside of the USA might be hiding one US tax evader, we are all supposed to just show everything regardless of rights to privacy, confidentiality or even common decency by this ever expanding, overly intrusive, nosy and belligerent US government. It is not just taxable income, they are also demanding a full disclosure of assets including intellectual property and that intrudes into areas they have no business or right to ask or demand.
The simple solution is no cross-border transactions with the USA whatsoever and be done with it, including be done with the USA passport and the IRS claimed right to tax anyone, anywhere, etc.
They even built in severe penalties that if my company or even my banks have any cross-border transactions with the USA in any way, and we hide even $1 from IRS, they can confiscate up to 30% of all assets in the USA of me, the bank, anyone else including say companies in the USA that might be selling us components to be exported from the US to Europe.
Some are even discussing how this lunatic new law is going to cause a debt default on US Treasury bonds, and that will of course cause credit downgrade, weakening of the dollar and economic hardships within the USA. I have days I want to ask DC whose side they are on.
Most US citizens are not aware that they could make a credit card purchase from within the US with an ecommerce website outside of the USA and both sides, domestic and foreign, have to comply with FATCA.
As with most laws, Congress and the White House never consider the implications or possible blowbacks from their stupidity and pretense of thinking they are so damned important in the global realm (and realities) of things.
Most foreign banks and other types of entities are already reassessing their positions in the USA. This one law will have a devastating effect on foreign investment into the USA just because the idiots in DC want to do everything their way even if it is brain damaged to do so.
Yeah, they are very intent on spying anyway they can and push that agenda from any angle they can dream up.
The FATCA law was to have gone into full force and effect on July 1, 2014 but they recently chickened out and dumped full implementation to January 1, 2016. What gutless cowards; put it over to the next election year where no one hears the gunshot that put the bullet right between the eyes to the US economy.
Maybe they had to delay FATCA because their FFI Registration Portal is hosted by the Obamacare website that still does not work. Wouldn’t that be a hoot!!!
The Republicans say they are trying to repeal it, but do not hold your breath. They do not control both chambers in Congress. I am confident Treasury and IRS can explain the need to spy even to RNC types.
There is a group in Geneva that has fought it every step of the way, but in typical DC fashion they think they are so damned smart they listen to no one but the insiders that want such laws.
I get mental images at times of how to solve this lunacy in DC. Just as I was finishing this I remembered a gag birthday card I gave to a close friend when he turned 50. It said:
‘A bunch of your friends got together and decided what to do for you birthday. We have decided to put you to sleep!!!’
I have solved a lot of problems in my life, but Washington DC seems to defy sanity or solutions.
My message to DC is simple: It’s the Policies, Stupid!!!
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