Then I saw my search stats.
FATCA was my number one search term for yesterday (and it already is for today). And just glancing at my search logs revealed that FATCA searches represented about 10% of yesterday's search engine traffic with many of those being unique visitors. It's almost double the number of searches for information about the French Foreign Legion, long the most popular search on this site. On top of that, with well over half of my traffic being from the US, I found very little of my FATCA search traffic was from the US, suggesting that there are a lot of people outside the US who want or need this information.
This is obviously very important for people and I'm surprised by the amount of traffic this one item is bringing, even if most Americans have never heard of this term, so I'll be updating with FATCA information from time to time.
FATCA, as pointed out, is not only an unworkable mess, but it's a huge burden to hand down to both the IRS and FFIs (Foreign Financial Services). However, while the Japanese and Australians have told the US to piss off and the Europeans have expressed grave reservations (because, amongst other things, it would be illegal for them to comply with US demands), the Canadians are cheerfully bending over and saying "thank you sir, may I have another?".
Well, that's the Canadian government. The banks are furious, but they're at the mercy of the government. And as one attorney testifying before the Senate Finance Committee pointed out:
FATCA, however, is imposing compliance costs of over a hundred million dollars for each of many institution, even where there is little likelihood that the affected institution has or will encourage tax evasion. And in a cruel irony, little of this money is going to be spent in the United States to create U.S. jobs. Rather, it will be spent abroad, creating jobs there.Isn't that lovely? Many Americans wanted a jobs program at home, but we created one overseas — to punish Americans. And yes, there are already FATCA job postings in Canada.
What other impacts might there be as a result? Well, in October of 2011, in Toronto, Canada, in what may be the first event of its kind, the US Consulate held a citizenship renunciation meeting where 22 Americans simultaneously renounced their citizenship. That's just in Toronto. We don't know how many across the world are planning this, but expat forums have many Americans openly discussing renunciation now. Many of these are Americans who became Canadian, but many are Canadians who were born in Canada, have never lived or worked in the US, but nonetheless have an American parent. They're outraged that the US is not exempting them from this policy. There is even discussion that the IRS may be sharing information with Homeland Security in hopes of catching people crossing the border. Many, probably most, of these people owe no taxes whatsoever, but have committed the "crime" of having failed to file a tax return with the US government. If you live in the US, standard penalties apply. If you live outside the US, failure to file a tax return is a potential $10,000 per year fine.
This is absolutely insane. It's a witch hunt against expats and there's really nothing we can do. We have no political influence and Americans at home don't really care. This has led to horrifying situations where my daughter, born here in Europe, faces a lifetime of US taxes but probably won't be allowed to vote. Our Social Security benefits are slashed (but we still have to pay for it), our Medicare is taken away (but we still have to pay for it) and now foreign banks are turning us away for the crime of being American.
The United States is the only country in the world which taxes their citizens abroad. Well, except for the brutal Eritrean dictatorship. Good company we keep there.