I mentioned the Isaac Brock Society site in a meeting with Joint Committee on Taxation staff. They already knew of the site.
You go, IBS.
… and so do you, Phil. Thanks for all you’re doing on our behalf.
Thanks Phil, for informing us of this. I hope that the staffers find the website informative. If they read also the comment stream, they will realize how much anger the current IRS procedures are creating throughout the world amongst expat. We are just little people, so it is nice to see that the internet has given us a voice that might even eventually be heard at the highest levels of the government.
“We are just little people, so it is nice to see that the internet has given us a voice that might even eventually be heard at the highest levels of the government.”
Too self-deprecating. The function of government is to stand up for the rights of everyone. We are not “little people”, we are individuals, each with their own goals, aspirations and desires, and who happen currently to be united by the common thread of being oppressed and ignored by a congress and IRS that prefers intimidation, coercion and threats to cooperation. If government does not listen to those it purports to represent then it has failed in its most basic duty.
I don’t think Petros’ comments were self-deprecating. Our resolution with the U.S. will be through persistent reasoned arguement and respect to the agency that is empowered to enforce flawed legislation.
While it’s great the internet serves as the great leveller, but I’m afraid that some members of the committee will worry more about headlines on the cable channels like “Ex-pats get big tax break from Congress” because your average homelander doesn’t understand the issue and won’t take the considerable amount of time on the internet to understand it as well. These issues don’t affect homelanders who see ex-pats as traitors sipping expensive drinks on foreign beaches subsidised by non-payment of US taxes (they forget other countries collect tax as well).
By all means push Congress that FATCA resembles the 1099 issue repealed in 2010 and express the view it’s in the interest of the US to forfeit any small tax revenue from FATCA because the loss of inward investment will more than offset any FATCA gains. FATCA also creates a lot of anger, resentment and ill will abroad that will trickle down in US investment decisions going forward. Let’s be frank in 2012, the US has competition and it’s not the only place in the world to invest your money and make a good return on.
The “safety valve” has to be limiting the scope of FATCA abroad by having foreign governments placing barriers in the way and encourage the overseas financial community to discourage investing in the US because FATCA makes US markets uncompetitive with other world financial centres. Most experts would agree FATCA makes the investor take an additional 30% tax risk on US investing that they can avoid in other markets. Even if they receive slightly lower returns in London, Frankfurt, or elsewhere, they don’t have the withholding tax risk and the hassle of filing US income tax forms to reclaim wrongly held money. Nobody knows how long it would take the IRS to refund FATCA withholding tax? FATCA withholding tax fraud also is another risk the IRS will have to deal with. The conmen could have a field day with that one.
Personally I’d rather make a somewhat smaller returns outside the US, have no FATCA withholding tax risk, and a “clean” transaction everytime I buy and sell. You click to buy or sell without a FFI flagging your account has fallen foul of FATCA rules and they’re required to withhold 30% of my proceeds that then requires more of my time and effort to reclaim back. Forget it – US financial markets will be left on the sidelines for a significant group of investors. When you make people jump through too many hoops they’ll go elsewhere, financial markets are no different.
Perhaps someone in Congress can be told the realities of FATCA and the recent FT article that predicts a “contreaction” of US financial jobs because of it.
Anon: The purpose wasn’t to be self-deprecating but simply to acknowledge that our current battle is one where our side has little power to change what is (1) the attitude of Congress towards expats; (2) the dominant narrative in the media; (3) the laws that apparently make us into permanent slaves of the USA, no matter where we go to escape. We have been able to use the new media to our advantage. If this crisis had happened 20 years ago, I wonder how we would ever have made our voice heard. Thus, we have made some considerable strides, and the justice of our cause is being heard. The current regime in Washington DC must take notice. They cannot make us disappear so easily as oppressors have in the past destroyed poor and powerless.
Renouncing / relinquishing solves the problem of citizenship-based taxation for individual ex-pats and puts the issue front and center in the media.
The higher the body count, the more attention the issue gets, which is the key to solving the problem for others in the future — a real paradox indeed.
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