Tuesday, January 3, 2012

The Accidental FATCA Jobs Program

Yesterday I wrote FATCA, the US Declares War and had almost three times my normal traffic, though I suppose the provocative headline helped.

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.


  1. To see what lies ahead for FATCA, look at the extreme ruthlessness that FBAR penalties were imposed on so-called "expatriate criminals" who were found guilty of not knowing about a form. I am now in that category in the eyes of the World Police/Anti-Christ. I found out about the FBAR after the fact. I am married to a non-us citizen. We have to worry that 25% to 50% of our meager lifesavings is taken away in a flash. Read Revelation in the bible people! These fines being imposed on poor couples in tough times like these are pure evil. Take advice from Jesus, World Police/Anti-Christ. Work to pay the bills. You shouldn't steal from good hearted people that are just trying to do good in this world. Bullying and strong-arming seem to be the only cards that U.S. Government throws on the worlds poor people's tables these days! Please start helping more of your people again. How you treat your own, to the world and heaven it is shown!

  2. I'm not the sort of person who will usually side with the banks where government oversight is concerned, but I really think this is a case of the US impinging on the sovereignty of other states with banks as the proxy. And of course I'm concerned about getting screwed by my US government.

  3. America's founders are probably rolling in their graves about the ignorant hypocrisy of the US Government. America would not exist if great men such as Thomas Jefferson, Benjamin Franklin, Patrick Henry, Thomas Paine, John Hancock, Paul Revere etc. bowed to British Tyranny and agreed to pay taxes to London with NO REPRESENTATION in British Parliament. The politicians in the city bearing George Washington's name are a disgrace taxing Americans abroad who have NO REPRESENTATION in US Congress. They need to go back to primary school and learn about the main cause of American Revolution -- taxing expats.

  4. It is so good to see this finally getting some attention. I'm in a very similar situation - longtime overseas American living in France, married to a French citizen with two dual-citizen children. I started writing about it in my blog, http://thefranco-americanflophouse.blogspot.com/. Through my posts I met up with the folks from the Isaac Brock Society http://isaacbrocksociety.com/ and I'm now contributing there.

    For months I have been trying to convey to my friends and family back in the U.S. all of the implications (and impacts) of FATCA on people like me. Up until recently I felt that I was small voice crying out to a completely unresponsive audience. It is so good to talk to other people about this and to read posts like yours. From the bottom of my heart, thank you. Every article, every story makes it all the more likely that people will sit up and start paying attention.