Who is in favor of the US instituting Residence-Based Taxation?

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Should the US stop Citizenship-based-taxation, i.e.:  Should the US tax only the income and assets of its residents?  Should the US stop imposing double taxation and double reporting burdens on people abroad and tax only the US-based income and US-based assets of persons who are bone fide residents abroad?

Please fill out both polls. You may check off as many aspects of US extraterritorial taxation and reporting policy as you like.

Reblog from IBS: Response from Swiss State Secretariat for International Financial Matters, Swiss Parliamentary Vote on FATCA IGA to Take Place Next Summer, Proposed Swiss Federal Law to Apply FATCA

Reblog of my post from: http://isaacbrocksociety.ca/2013/03/12/response-from-swiss-state-secretariat-for-international-financial-matters-swiss-parliamentary-vote-on-fatca-iga-to-take-place-next-summer-proposed-swiss-federal-law-to-apply-fatca/ (Maple thread is:http://maplesandbox.ca/2013/swiss-parliament-to-vote-on-fatca-iga-in-summer-parliamentary-session-proposed-swiss-federal-law-to-apply-fatca/)

Further to my post last Sunday here at IBS, SWAT–Switzerland IGA: Still not enough information available in Switzerland, I received a reply email from the Swiss State Secretariat for International Financial Matters (SIF) yesterday. I stand corrected: it seems that I didn’t search hard enough on the Swiss Federal Authorities site (admin.ch) and that not only the agreement text is now available in Swiss national languages, but also a “law of application” has been drafted to enforce the agreement. From what I understand, Parliament will be formally informed of the package to vote on by 15 March 2013, but is not expected to vote on the issue until next summer. It would appear that the Cantons, Communes, Political Parties, etc. are expected to provide feedback by 15 March and this feedback will go to Parliament in some formal fashion, but of course this does not preclude lobbying directly to deputies outside of the formal consultation procedure between now and the vote next summer.
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Switzerland Did Not Respect International Judicial Assistance Rules with the USA

La Suisse n’a pas respecté les règles de l’entraide judiciaire avec les USA

Partial translation:

Confronté au cas des banques suisses qui ont livré près de 10’000 noms d’employés aux Etats-Unis, l’expert suisse en matière d’entraide judiciaire internationale Robert Zimmermann est catégorique: “La procédure d’entraide a été court-circuitée, c’est du jamais vu dans l’histoire de la Confédération”, a-t-il déclaré à la RTS mercredi.

 

Confronted with the case of the Swiss banks who divulged close to 10,000 names of employees to the US, the Swiss expert in international judicial assistance matters, Robert Zimmerman, is adamant: “The Judicial Assistance Procedure was short-circuited, in a manner never seen before in the history of the [Swiss] Confederation”, Robert Zimmerman told Radio Television Switzerland on Wednesday.

 

Robert Zimmermann rappelle le précédent de 1983. A l’époque, l’Américain Marc Rich, réfugié en Suisse, avait accepté de livrer les noms de clients et d’employés de ses sociétés actives dans le négoce de matières premières au Département de justice américain. Saisi de l’affaire, le Conseil fédéral interdira cette livraison de données, intimant à Marc Rich de respecter la procédure d’entraide.

 

Robert Zimmerman reminds us of the precedent in 1983. At that time, Marc Rich, refugee in Switzerland, accepted to divulge names of clients and employees of his companies active in trading natural resources to the Department of Justice. The Federal Council forbid the transmission of the data, enjoining Marc Rich to respect the international judicial assistance procedure.

 

“Une Suisse affaiblie”

Trente ans plus tard, le Conseil fédéral cède aux demandes américaines, “un précédent extrêmement dommageable pour la Suisse qui a bâti sa réputation au fil des décennies par son respect du droit et des lois”, commente Robert Zimmermann. L’expert déplore encore le fait que la Suisse, “qui s’était toujours attachée à coopérer avec les Etats-Unis, dans le cadre strict des traités”, s’en trouve affaiblie.

 

« A Weakened Switzerland »

Thirty years later, the Federal Council gives away to American demands, “ a damaging precedent for Switzerland, which has built its reputation over the decades for its respect for the rule of law”, says Zimmerman, who deplores the fact that Switzerland “which has always been committed to cooperate with the US within the strict framework of treaties”, is weakened.

Recours déposé

L’affaire est loin d’être close puisque l’ex-chef juriste de la banque HSBC Eric Delissy a fait recours au Tribunal pénal fédéral (TPF) contre les décisions de HSBC, de l’Autorité fédérale de surveillance des marchés financiers (Finma) et du Conseil fédéral, s’opposant notamment au classement de sa plainte par le Ministère public de la Confédération (MPC).

 

« Appeal Lodged »

The matter is far from being closed because the ex-head-lawyer of the bank HSBC, Eric Delissy has appealed to the Federal Criminal Court against the decisions of HSBC, federal market regulators (FINMA), and the Federal Council. This appeal is in opposition against the dismissal of the matter by the Federal Attorney General.

 

Si le recours d’Eric Delissy est accepté – la décision du TPF à Bellinzone est attendue dans les prochaines semaines – le MPC devra ouvrir une enquête contre les responsables de HSBC pour espionnage économique au profit d’une puissance étrangère (art. 273 du Code pénal suisse), puis ce sont les responsables de la Finma et le Conseil fédéral qui pourraient devoir répondre de la livraison de données bancaires aux Etats-Unis.

 

If the Eric Delissy’s appeal is accepted, the decision of the Federal Criminal Court at Bellinzona [located in Italian-speaking region] is expected within a few weeks. The Federal Attorney General would open an investigation against HSBC management for economic espionage in favour of a foreign power (violation of Article 273 of the Federal Penal Code)….

Maple Thread: http://maplesandbox.ca/2013/switzerland-did-not-respect-international-judicial-assistance-rules-with-the-usa/

IBS Thread: http://isaacbrocksociety.ca/2013/02/07/switzerland-did-not-respect-international-judicial-assistance-rules-with-the-usa/

Link

Statement of Roger Conklin, Retired International Sales and Marketing Executive: The Negative Consequences of Citizenship-based Personal Taxation on the Competiveness of American Companies and the Resulting Destruction of Jobs for American Workers

This is an open paper given by our friend, Roger Conklin, to the House Ways and Means Committee.

Here are some other recent comments from Roger about FATCA, the trade deficit, and the problems that are caused by double taxation:

FATCA is the straw that breaks the camel’s back. The US government started piling them on with 1962 legislation which taxed just a handful of the very rich abroad – movie stars filming in Mexico. So they came home. But the Tax Reform Act of 1976 brought back hundreds of thousands of middle class Americans abroad who always insured a healthy US trade surplus. The largest-ever US trade surplus was in 1975, but when hundreds of thousands of overseas Americans were hit by a ton of bricks, they abandoned ship and the US trade balance immediately went negative. There has never been even one trade surplus since 1975 and our cumulative trade deficit since 1976 now exceeds $9 trillion!

I had been running a company in Brazil penetrating a new market for American products. When that Act was signed my combined Brazilian plus US tax shot up to 81% more than any non-American with my exact same income and family status. I could not survive. I closed out work in process, shut down the company and came home to start a new career.

A French company moved in, hired most of our employees and 8 years later was importing $1 billion in French products into Brazil to support that market. The US share of that market dropped to near zero. This happened around the world and that is why the 100-year period ending in 1975, during which the US recorded trade surpluses for 95 of those 100 years, overnight was transformed into our current perpetual trade deficit.

With FATCA, on top of being subject simultaneously to two very different and incompatible sovereign tax systems, there will be few Americans left abroad. The draconian FATCA rules obligate foreign banks to provide detailed reports on their accounts of US citizens, in open violation of the privacy laws of the countries where they operate. Rather than comply and risk massive penalties imposed by their governments, they are closing down accounts of American persons. Without an account to deposit their paycheck or out of which to pay their rent, they cannot survive. So it is either pack up and come home or renounce US citizenship. To those with foreign spouses renunciation is their likely choice because obtaining a visa for the spouse to immigrate to the US and start life over from scratch is rarely a viable choice. Being uprooted after 10, 20 or more years and forced to start over in a different country is absolutely inhumane. Yet that is exactly what FATCA does to middle class Americans living abroad.
 

Senators scrutinize FATCA

Aside

Senators scrutinize FATCA (http://isaacbrocksociety.ca/2012/07/31/deserves-own-post-fatca/)

Some senators are starting to see the bigger picture: http://www.prnewswire.com/news-releases/washington-expert-applauds-senators-scrutiny-of-fatca-hails-first-nail-in-coffin-of-bad-law-164446156.html

ACA has picked up on this:

Letter from Paul, Lee, DeMint, Chambliss:

http://americansabroad.org/download_file/view/199/1/

Also interesting is the US Treasury Department Statement attached to the letter, which resembles quite a bit the statement released with reference to Switzerland, including the points I think might be very positive:  B.3.  “…FATCA partner would not be required to:  a. Terminate the account of a recalcitrant account holder; b. Impose passthrough payment witholding on payments to recalcitrant account holders; c. Impose passthrough payment witholding on payments to other FFIs…”

ACA Press Release on the Senators’ position:

http://americansabroad.org/download_file/view/201/1/

U.S. citizens living here: Do your tax duty — An article in Winipeg Free Press that appears to be a simple informercial for the author’s accounting business.

http://www.winnipegfreepress.com/opinion/columnists/us-citizens-living-here-do-your-tax-duty-156202125.html

Jefferson’s response:

This article does not fully address the issues faced by US persons living outside of the US, and reads a bit like an infomercial for the author’s services. 

 

The US has long overstepped its bounds through extraterritorial legislation that violates the constitutional protections afforded by foreign countries, the Universal Declaration of Human Rights (UDHR) and the U.S. Constitution.

 

US Persons are being forced to forfeit their rights to privacy and due process under the 4th and 5th Amendments, being subject to “excessive fines” in violation of the 8th, and are being legislated against without the proportional representation in the House of Representatives afforded by Article 1, Section 2 USCONST. 

Recent bills such as the “Ex-Patriot Bill”, provisions in the highway bill for passport confiscation and the blockage of payments to and credit cards issued by foreign banks that refuse to adhere to FATCA abominable acts that only continue the policy of taxation without representation already practiced by the US Congress and the administration through double taxation, FBAR enforcement, restrictions on renunciation of US nationality, and FATCA. 

 

People abroad are getting tired of the US trying to finance its own bailout by extorting money from US persons living abroad, most of whom never profited from the boom in the US.  Things are especially bad for US persons living in high-cost-of-living countries where the poor US Dollar exchange rate puts them in increasingly higher tax brackets in the US (above the Foreign Earned Income Exclusion, FEIE)  even in countries where the local income tax should wipe out the US tax through the Foreign Tax Credit, there are issues with the Alternative Minimum Tax, and restrictions on the Foreign Housing Exclusion and Deduction requiring one to live in the center of particular cities abroad (and not taking into account the high cost of living in many suburbs of such cities).  In high cost of living countries like Switzerland, which has slightly lower income tax but plenty of other forms of fee and taxation that are not taken into account as deductions in the US, many find themselves unable to pay their bills. 

 

The whole situation is causing strain on families, bankruptcies, divorce, and even suicide.  It is time for US persons abroad to have their own Boston Tea Party and throw off these shackles.   We shall not let the US do to us what the crown and parliament did to the colonists prior to the American Revolution of 1776.  NO TAXATION WITHOUT REPRESENTATION, NO CITIZENSHIP-BASED TAXATION.

http://isaacbrocksociety.com/

http://isaacbrocksociety.com/2011/12/13/is-the-taxation-of-us-persons-abroad-constitutional/

http://stopdoubletaxation.wordpress.com/

http://www.aca.ch/joomla/index.php

No Civilized Country Would Ever Banish Eduardo Saverin

Here is an article by Peter W. Dunn “Petros” of the Isaac Brock Society which appeared in the American Thinker:

http://www.americanthinker.com/2012/05/no_civilized_country_would_ever_banish_eduardo_saverin.html

“…The  Ex-Patriot Act introduced by Senators Chuck Schumer and Bob Casey is a bill of  attainder which would result in cruel and unusual  punishment…”

“…This  Ex-Patriot Act and the Reed Amendment are thus bills of attainder, which apply  punishment and the seizure of a person’s of wealth without the benefit of a  criminal trial.  Banishment is terrible and inhumane; it is in principle a  violation of the Eighth Amendment, which permits no cruel and unusual  punishment.  Even Professor Bruce Ackermann at Yale Law, who called for banning Saverin in the LA Times,  understands this and would therefore allow an exception for those who would need  to visit a family member who is dying or in hospital…”

Here are Isaac Brock Society and Righteous Investor discussion threads on the article:

http://isaacbrocksociety.com/2012/05/21/no-civilized-country-would-ever-banish-eduardo-saverin/

http://isaacbrocksociety.com/2012/05/26/chuck-schumer-lashes-out-at-petros-on-senate-floor/

http://righteousinvestor.com/2012/05/21/no-civilized-country-would-ever-banish-eduardo-saverin/

Schumer’s Bid To Tax a Founder of Facebook Ignites Discussion of a Law Used by Nazis

Here is a recent article published in The Sun (NY) comparing the30% tax on capital gains of renunciants of US citizenship to Nazi Reichfluchtsteuer:

http://www.nysun.com/national/schumer-bid-to-tax-a-founder-of-facebook-ignites/87829/

“…The Reichsfluchsteuer, or Reich flight tax, that the Nazis imposed on Jews trying to flee in the 1930s was 25%; Mr. Schumer and his Senate colleague Bob Casey, Democrat of Pennsylvania, want 30%. Give Mr. Schumer some credit for creativity, Mr. Norquist; the New Yorker did not just plagiarize and translate, he also raised the rate…”

“…Everyone has the right to leave any country, including his own” and “No one shall be arbitrarily deprived of his property.” What meaning does a right to leave have if the government is going to help itself to 30% of the migrant’s property on the way out?…”

Jefferson D. Tomas:

National Narcissism… if the US rests on its laurels and assumes it will always be right, it will be proven wrong.

Originally posted on The Isaac Brock Society:

This is an excerpt from a long post at RenounceUScitizenship

Many “Homelanders” simply cannot:

- conceive that, U.S. citizens find  better places to live;

- conceive that the U.S. is no longer the country envisioned by the Founding Fathers;

- see that the U.S. is no longer the free country that it once was;

- believe that many Americans want to renounce, and that they are willing to pay  (in the form of Exit Taxes) to do it.

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Jefferson D. Tomas:

Al Lewis did finally listen to our side of the story, covering people living abroad that are not millionares or billionaires. I hope that many other journalists will do the same.

Originally posted on The Isaac Brock Society:

Al Lewis, whose earlier story castigated rich people who expatriate, now has done an article telling the other side of the story.

Tax man makes it hard to be an American/ Commentary: Tough IRS rules hit the little guys hard

He interviews some guy named Peter Dunn and plugs his blog, the Isaac Brock Society.

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Senators to Unveil the ‘Ex-Patriot Act’ to Respond to Facebook’s Saverin’s Tax ‘Scheme’

Jefferson D. Tomas:

I don’t think this so-called “Ex-Patriate” bill is constitutional at all. Saverin has already renounced, so they cannot increase his tax bill by increasing capital gains for assets sold up to 10 years back or bar him entry any more than under what was already part of the Reed amendment.

 

To my mind the proposed bill is a Bill of Attainder and Ex Post Facto:

 

“Article 1 Section 9 USCONST “….No Bill of Attainder or ex post facto Law shall be passed…..”
“As James Madison wrote in, Federalist Number 44, “Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. … The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community.”

Source:  about.com Article on Bill of Attainder

 

These two Senators are out of control. Their action is clearly intended as a bill of attainder against Saverin and others who have recently renounced.  This limits economic freedom.  Guess what, one may be forced to retain US citizenship, continue to pay double taxes, double report under FBAR, FATCA, not be certain to be able to travel to manage one’s business abroad or see relatives because the IRS might have found some little screwup (or screwed-up itself) and not be able to bank in a foreign country where business is being done due to FATCA scaring banks away from US customers.

 

What a double whammy:  not only are those directly affected by the bill being done over, people will be afraid to invest in the US economy even more for free of being trapped.  This will hurt the US economy.  Those trapped in US citizeship that have the economic means will increasingly flee in protest with the capital they can free up by whatever means possible.

 

As many on the Isaac Brock Society and elsewhere have mentionned, there is an Iron Curtain falling around the shores of America.  Are they going to start mining the border and shooting people that just want to leave because they are tired of this?  HAVE U.S. LAWMAKERS FORGOTTEN THE LESSON OF THE COLD WAR, WHICH ENDED ONLY SOME 20 YEARS AGO ???

Originally posted on The Isaac Brock Society:

Senators to Unveil the ‘Ex-Patriot Act’ to Respond to Facebook’s Saverin’s Tax ‘Scheme’

The Saverin fall-out, as expected, has begun:

Key quote:

The senators will call Saverin’s move an “outrage” and will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.

The plan would bar individuals like Saverin from ever reentering the United States again.

What does this mean? Can we never be free from these people? Is this implying that if you renounce citizenship now even with under the 2 million in assets that you will end up paying capital gains taxes anyway? And what is this about “re-imposing taxes on expatriates”? Does that mean that renouncing citizenship doesn’t do anything and…

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Center for Freedom and Prosperity Critisizes FATCA Following Yesterday’s Treasury Department Hearing

Today’s Treasury Hearing on FATCA Conducted in Vain, Law Must Be Scrapped, Says CF&P President

http://freedomandprosperity.org/2012/press-releases/treasury-hearing-on-fatca/

2011 Leter to Geithern on FATCA Cost-Benefit Analysis:

“…As a matter of policy, FATCA fails to measure up on several levels. It is not clear what benefits, if any, will come with its heavy costs. The projected revenue gains are questionable, and may even be offset entirely by the reduced economic activity. Treasury should take the additional time before FATCA is to be implemented to illuminate this issue with a cost-benefit analysis, so that lawmakers can determine if such legislation should ever be considered again, or if FATCA itself should be outright repealed.”

http://freedomandprosperity.org/2011/letters/geithner-fatca-cost-benefit-analysis/

Great Arcticle in the Toronto Star about FATCA “Canadian bankers fight Washington”

http://www.thestar.com/business/article/1178970–canadian-bankers-fight-washington

The article speaks about Canadian bankers rejecting the intrusive nature of FATCA regulations. Unfortunately there is not yet a comments page open on this article.

Here is another article on Investor Daily

FATCA can still be repealed: US expert

            FATCA debate in US has only just started

FATCA is not set in stone just yet, a US regulatory specialist says.

http://www.investordaily.com.au/cps/rde/xchg/id/style/14218.htm?rdeCOQ=SID-0A3D9633-40981AB7&rdeCOQ=SID-0A3D9632-99714186

Jefferson D. Tomas:

Lots of debate on the Miami Herald and McClatchy site, including comments from many that are intolerant of our situation. I would hope that everyone who reads this will take the time to enter this debate and make our unfair and unjust condition known objectively to all.

Originally posted on The Isaac Brock Society:

Roger sent me an early morning email, saying that my name made into the Miami Herald, and I immediately began to comment at the McClatchy site:  IRS crackdown on foreign assets leading many to renounce U.S. citizenship.

There I’ve had a numerous interactions with commenters.  Here is what has appeared thus far:

Petros wrote

Hi! My name is Peter W. Dunn, and I am a blogger at the Isaac Brock Society.  I am the one mentioned in this article.  I don’t know why the moderator took down my original comment, perhaps because I included a link to our blog, where people can get information about why Americans abroad are renouncing their citizenship.  I am sorry that I have to go to such lengths to have free speech. But I think that it is the least you can do, since you have mentioned my name in the article, that you…

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Swiss Constitutional Initiative on Popular Ratification of Treaties

There will be a live debate tonight on Radio Télévision Suisse (formerly TSR) concerning a constitutional amendment that will be voted on by the people this coming 17 June. 

The amendment would require a majority of the people and the cantons to approve any international treaty that:

1. Results in a multilateral unification of laws in important domains.

2. Obliges Switzerland to accept future legal rules in important domains.

3. Delegates legal jurisdiction to foreign or international institutions in important domains.

4. Results in costs of more than 1 billion francs or recurring costs of more than 100 million [I suppose they mean per year].

 

http://www.infrarouge.ch/ir/1915-speciale-votation-accords-avec-rsquo-etranger-parole-peuple

Once again, you should be able to view the program tomorrow via the Infrarouge site. 

Originally posted on IRS vs expats:

FREEDOM OF INFORMATION ACT

The Taxpayer Advocate Service which, in vain, tried to help me in my recent and still ongoing interaction with the IRS, has issued their 2011 Annual Report to Congress entitled, “Introduction to International Issues: Compliance Challenges Increase International Taxpayers’ Need for IRS Services and May Undermine the Effectiveness of IRS Enforcement Initiatives in the International Arena.” It is available online on the IRS web site as a 144 page pdf file and, as most bureaucratic reports, is lengthy, convoluted, and confusing. Nonetheless, it highlights the problems that the IRS is causing for Expats and is highly critical of them. If you can’t find it, click on the link above and then click on “International” and you’ll download the file.

It starts with the statement, “In recent years, globalization has pushed an increasing number of taxpayers (including small- and medium-sized businesses and individuals) to seek economic opportunities…

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Jefferson D. Tomas:

FATCA’s “Vulnerabilities Evident,” Washington Expert Claims, Calls for Repeal

Originally posted on The Isaac Brock Society:

Wondering posted this on the How to Join thread where it doesn’t seem to be getting the attention it deserves:

James George Jatras is a Principal of Squire Sanders Public Advocacy, a Washington-based government relations firm. He previously served as a policy analyst at U.S. Senate and as an American diplomat. He can be reached at james.jatras@squiresanders.com.” His article: FATCA’s “Vulnerabilities Evident,” Washington Expert Claims, Calls for Repeal WASHINGTON,

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Originally posted on The Isaac Brock Society:

Here is a Washington Post article that just broke that seems to contain a lot of text that we have already seen at sources like Bloomberg and WSJ.  Nothing really that new.

Foreign banks freezing out U.S. millionaires

The comments page is interesting: there is one remark mentioning the fact that FATCA-level reporting is not required of American banks.  Perhaps IBS members could put some comments there.

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Originally posted on The Isaac Brock Society:

I came across the following remark from Don at hodgen.com :

Don says:   May 9, 2012 at 8:32 pm

… Other interesting news, Michelle Backmann has become a Swiss Citizen, strange but true.

I wonder what her stance on FATCA is?

Oddly enough, Wikipedia has been updated to show that she is “American-Swiss” (born April 6, 1956) “is an American-SwissRepublican member of the United States House of Representatives … “
Very interesting.

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Originally posted on The Isaac Brock Society:

Tax Rule Provokes Foreign Banks’ Ire

Takeways:

Whatever lobbying Democrats Abroad and ACA is basically completely ineffective and disregarded if you believe what is said in this article. I might send an email to Joe Green himself to get his reaction. An unnamed Treasury Department official appears to view the Democrats Abroad FBAR/FATCA survey as a “joke” because its anonymous. It appears Treasury has very much made up its mind on this issue prior to next weeks hearing.

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