Since my mentioning of FATCA in an interview last week I have had many people ask me about what it is and who it affects. I am amazed by the amount of expats that are still not informed about one of the most egregious power grabs by the US government since the day of it’s inception. In short, the US government is extorting all the financial data from worldwide financial institutions and governments under threat of financial sanction. It is a direct attack on global commerce and a play to force money out of banks not under US control. What we are seeing is a money addicted giant which has sucked dry it’s domestic population and is now going after those who have seen the writing on the wall and fled “the homeland” to greener pastures elsewhere.
Here is a the best and most succinct explanation of FATCA I have found.
Background on FATCA
When they weren’t too busy writing the monstrosity known as Obamacare, being drunk on the Senate floor or evading taxes themselves the three stooges Max Baucus, Charlie Rangel and Harry Reid decided it was a good idea to sneak a bill into the HIRE act that should make the message loud and clear that the US government is living in a hubristic state of delusion. It obligates all foreign financial institutions to snoop on their own clients and report back to them, in other words they will be working as unpaid spies for the IRS. First, they will need to comb through all of their clients to determine which of them could be categorized as “US persons”. Then they will need to fill out and send the IRS any paperwork and information on these clients which the IRS sees fit. If they do not comply they will be subject to a 30% theft of any US based income which goes to their organization.
What is a US Person?
The definition of “US persons” currently includes the following:
- US citizens
- US permanent resident
- A domestic partner of a US citizen or resident
- US corporations
- trusts under majority control of US persons
Although this may seen straight forward there are many unique circumstances that make it difficult to know who may be an “Accidental American” and therefore liable for tax on their past, future and present income, even if they have never stepped foot in the United States. After determining which clients might be American Persons they will then have to read through five forms (in English I might add) to find out which one applies to the client. This is a huge uncompensated burden and many banks such as Deutsche Bank, Commerzbank, HypoVereinsbank and Credit Suisse have just simply been shutting down American client’s accounts and turning them away as new customers. The process has already started to turn US citizens living abroad into financial refugees unable to open a simple bank account. Take a look at the disclaimer on Euro cialis 5 mg cheap Pacific Bank’s website to see an example of what US citizens will be running into more often in the future. The result of this will be that Americans abroad with accounts over $10,000 will find it easier to move their money to the bankrupt US banks where every transaction can be scrutinized by the IRS.
The numbers don’t add up
In order to pass this draconian legislation the figure of $100 million in yearly tax evasion is carelessly thrown around in Congress. This figure is entirely based on a rant by Marc Levin on the Senate floor where he was specifically speaking about perfectly legal tax AVOIDANCE on which FACTA has no affect. Even if this figure were correct the total implementation costs has been estimated at $100 million per institution or $8 billion in total. Spend $8 billion to save $100 million a year? These numbers don’t add up!
The reason that the math doesn’t make sense is that the none of the costs are being borne by the US. The US lawmakers are just simply demanding that it is the institutions responsibility to pay for compliance. Of course, these institutions will then pass these costs on to their customers. Just another example of the common man having to pay higher taxes and fees in order to keep the jackboot on their neck.
It gets worse
Tyrants around the world were impressed by the ingenuity of their US counterparts and are planning a global tax agreement between all OECD countries. This agreement has many of the same characteristics as FATCA and has become commonly known as GATCA. This is game changing legislation which will turn the financial world into a fishbowl where no one can escape paying for the debts run up by perpetual wars, banker bailouts and whatever other reckless spending politicians choose to engage in. These busybodies are hard at work on this legislation and are hoping to have the beginning stages in effect by the end of the year. Over 50 countries have already signed agreements to go along with the program. Interestingly enough China and Russia have not yet signed up.
Luckily for us, even attempting to central plan such a task is next to impossible and the deadline for implementation of FATCA has been changed several times. The most recent IRS announcement has pushed back the deadline from July to the end of this year in order for these institutions to be able to comply correctly. The parasites have certainly not been derailed but are only postponing their attack to make it more effective.
There are many groups fighting to kill this train wreck before it occurs. If you would like more information or to take action you can contact them below.
ABOLISH THE FOREIGN ACCOUNT TAX COMPLIANCE ACT Maple Sandbox