United States Run Amok (again)

[thongboi]

I paid taxes in Korea and just filed the right form while living outside of the USA (same thing while in China). Honestly, if you make less than the 90K figure, you don't pay US income taxes and I don't see that changing and like somebody said above, if you pay taxes abroad, you CAN claim that difference (and rent, etc) against your income tax in the USA.

 

[MoltenRock III]

Only a fool would use a Swiss bank. It's been this way for nearly 15 years that experts were warning Americans not to use them as there are much better countries to use that sneer at US IRS hegemony.

The US used to still claim you owed it taxes even if you renounced your citizenship, for a period of 10 additional years. If you didn't file you would be arrested if you ever returned to the US or simply caught a connecting flight thru the US.

And no Jayhawk it is not illegal to carry dual or even triple citizenship. There's quite a few of us even here at JUB with more than one citizenship and passports.

 

[Kulindahr]

And no Jayhawk it is not illegal to carry dual or even triple citizenship. There's quite a few of us even here at JUB with more than one citizenship and passports.

I think it was established in another thread that the only time you can only have US citizenship is if you have to take an oath to protect and defend the Constitution.

Though given how 'well' our Congresscritters honor that oath, I wonder why we bother.

 

[Tengilethos]

It could have been handled better and certainly Sec Clinton has revealed herself to be the most effective member of the Obama cabinet. Obama is a wiley politician, though and I don't think his reasons for the demands are quite as obvious as we are considering. I guess I need to call up a few colleagues and talk this over with them.

The tax havens need to end. America cannot continue on the path its on. IT Has GOT to increase revenue somehow.

As for the USA writing laws for other nations? it hasn't happened. They are merely regulating how the international banking industry does business in america.

It has to pass through the house, senate, and get the presidential signature to be law.

This is regulatory fiat. It is within the purview of the IRS to operate this way. It can create levys without any legislative or judicial permission.



by the tax code of the USA the sec of the treasury under the direction of the IRS has complete authority to take whatever he wants whenever he wants from whomever he wants, provided its on american soil,

here is a list of the exemptions....

http://codes.lp.findlaw.com/uscode/26/F/64/D/II/6334

Several things here:

1. The USA is not merely regulating how banks do business in America. If somebody lived in Canada for 10 years and never went back to the US, how can you say that their bank is doing business in your country when it just has this person as a customer? Of course the bank most likely is doing business in the USA, but not related to this person. So you are in effect regulating the way this foreign bank does business in a foreign country.

2. Of course you can bully most countries into giving up the information, but that doesn't make it right. And there are states where this just won't work. What if the new tax-havens are Russia or China? Good luck trying to convince them to give up sensitive data.

3. And ultimately this misses the point. I am pretty sure that it is not the US citizens living abroad that evade the most taxes. The vast majority of people evading taxes still live in the USA! They shuffle their money through several tax-havens to escape the IRS in your country while still having access to 1. their money and 2. the high standard of living and 3. their lucrative business in the United States. These are the ones that have to be caught, and you have every right to access account information of your citizens living in your country but hiding their money abroad.

 

[RobinGoodfellow]

The USA was built to move slowly, and it is having a hard time with the speed of the world as a result. People want action now and forget what they wanted yesterday.

This isn't necessarily a bad thing. It prevents mob mentality for the most part, as well as ensuring that there is at least some thought put into the laws being enacted....Now, if we could just get away from from non-tech types making tech laws.

RG

 

[bankside]

This is proving difficult for some people so let's consider the reverse situation.

An American carries a concealed weapon on holiday within a Canadian city. We arrest him. He says "But in Texas it is allowed! You can't arrest me, for I am an American and as such then American law is the relevant law in this situation!" We laugh. He gets convicted of a crime. The US Embassy protests: Wait! He's an American! We laugh. The appeal is denied. The IRS decides to seize the assets of Canadian companies because this American has won damages against Canada in a Texas court because we applied our own laws instead of the US laws he packed in his suitcase when he came here on holiday.

We don't laugh. We build a pipeline to the West Coast instead of south. China and Canada sign a free trade agreement to replace the NAFTA agreement that the US thinks they can ignore. We shut off oil pipelines to the US and enjoy a mutually profitable trading relationship with a communist dictatorship that is somehow more principled and above-board than with our erstwhile ally and neighbour. Once again we laugh.

Yes, I've missed several steps in that sequence, but the scenario points out the distaste that results from American imperialism, as well as the bottom-line responsibility for countries like Canada (which is most countries with whom the US trades) to consider making other arrangements. The US just can't enforce US law outside the US.

Or here's another example where Canada's got it wrong instead of the US. Many Canadians seem to feel that since the death penalty is unjust that no Canadian should face it in the United States:

http://www.cbc.ca/news/world/story/2010/10/14/death-row-ronald-smith.html

My theory is that Canadians are aware of the death penalty, they're aware that it is an American law, and if they don't want to face it as a result of a crime or as a result of mistaken identity or miscarriage of justice, they should simply avoid going to the United States. It's their law. It's immoral. But it's the law of the land. You can't wave a Canadian passport to get out of a death sentence for a crime committed in the US. The Charter of Rights and Freedoms does not apply to Canadians travelling through the States unless you're talking about their dealings with a Canadian consulate.

 

[JayHawk]

Bankside that is an amusing story but you will find a dry hole when you choose to build that pipe to the west.

The idea that china is somehow insulated from the world and can just chug along happily is a myth. We are finding this out now. It took a bit for the effects to tighten China's belt but it is here.

It was tempting to believe that China was different.

With its command and control economy with some of the trappings of free market capitalism, trillions in reserves, and abundant natural resources, many thought that China would "decouple" from the Western world's problems and sail into a prosperous future.

However, despite its long history, exotic names and seemingly strong position, China cannot avoid the rules of economics which have applied to all countries throughout history.

This a site that is another blog but the links in the blog link to sources. AN interesting read. Completely off topic of course but as direct response.

I cede my remaining minutes to the [STRIKE]gentleman[/STRIKE] Pirate from Boston

 

[oakpope]

You are not legally allowed to hold both US citizenship and any other countries citizenship.

That is not correct. For example the former california governor Schwartzeneger has dual citizenship us and austria.

You fail to realize the point of contemption here : that US citizens are required to pay taxes to the USA is not the problem, USA can have the laws it wants. But to decrete that all others countries must apply to a US law and divulge bank accounts is ludicrous, preposterous, very rude and have no chance of success. In France if a politician were known to support this, it would be an uproar and his/her resignation very soon after.

 

[MoltenRock III]

Bankside that is an amusing story but you will find a dry hole when you choose to build that pipe to the west.

The idea that china is somehow insulated from the world and can just chug along happily is a myth. We are finding this out now. It took a bit for the effects to tighten China's belt but it is here.

This a site that is another blog but the links in the blog link to sources. AN interesting read. Completely off topic of course but as direct response.

I cede my remaining minutes to the [STRIKE]gentleman[/STRIKE] Pirate from Boston

What are you going on about? China's GDP growth was 9.7% last quarter. From 1989 unti today that growth has averaged 9.31%. Asia is booming. So much so that Asian countries are raising interest rates to tamp down growth and the threat of inflation.

 

[oakpope]

I read this in http://blogs.wsj.com/hong-kong/2011/05/11/what-to-know-about-the-irs-in-asia/

"WSJ: Overseas Americans are also expected to have a harder time opening or maintaining bank accounts. What’s behind that?

Mr. Michel: There’s the foreign account tax compliance act, or Fatca. Fatca applies to any bank anywhere in the world and basically says if a bank wants to invest in any U.S. asset, it has to promise to provide the IRS with every American account holder. If a bank doesn’t comply, the IRS could withhold 30% on all income and gross proceeds from a U.S. portfolio. So, if a small private bank in Hong Kong has two American clients and 100 non-American clients and then doesn’t comply, it may be subject to a fine of 30% of all U.S. holdings, even if those holdings are coming from portfolios of non-Americans. So 100 non-American clients could be down 30% in their U.S. portfolio if the bank doesn’t agree to comply. It’s an enormous extraterritorial reach by Congress.

There are small private banks saying that they are not going to invest in the U.S. From a personal perspective, it seems to me that the U.S. is overreaching here a bit. I would think the last thing the U.S. wants to do now is create any disincentive for capital inflow into the U.S. It also stigmatizes Americans living overseas if banks are viewing them as poison and don’t want them as customers. It’s in the interest of the U.S. to have Americans working around the world."

IRS is blackmailing foreign banks. It will lead to more difficulties for US citizen if foreign banks don't bother to have US customers who will complicate their trades with the USA.

 

[bankside]

May I be the first to point out to private banks in Hong Kong that Canada has no equivalent of FACTA and we welcome capital investment from around the world.

 

[oakpope]

I dig a little deeper for France

http://www.irs.gov/pub/irs-trty/france.pdf

is the convention between USA and France. More or less the taxes paid in one of the country can be deduced from the taxes due in the other. It means that a US teacher in France who has a fixed revenue will pay the french taxes, and will probably pay no taxes to USA, but will have to make the US mandatory tax papers (poor US citizens ).

For the convention to change it would need a new treaty between the 2 countries and good luck with that if the left wins next year general election

 

[MoltenRock III]

May I be the first to point out to private banks in Hong Kong that Canada has no equivalent of FACTA and we welcome capital investment from around the world.

I wonder which boneheads decided "FACTA" was a "good policy" for a US government that requires trillions of $$$ to be bought by foreign banks?

This summer, the senior management of one of Asia’s largest financial groups is quietly mulling a potentially explosive question: could it organise some of its subsidiaries so that they could stop handling all US Treasury bonds?

“Right now my board is probably as concerned about political risk in America as Indonesia, from a business perspective – perhaps more so,” says the head of one large global bank.
http://www.ft.com/cms/s/0/4e6e31a6-95e4-11e0-ba20-00144feab49a.html#axzz1QK8QO46r

And then people wonder why someone might hold or keep multiple citizenships :

o From an American with a spouse working in Germany – “…when he went to create an account, he discovered that the bond fund could not be sold to US citizens.”

o From a non-profit group operating in Europe – “…we received notification from [bank redacted] that they were terminating our account.”

o From an American working in Switzerland – “I’m in the process of having my…accounts with [bank redacted] forced closed, except for the mortgage. I’ve been unable to open an account with any other Swiss bank.”

o From an American living in Belgium – “…my portfolio of investments held at their bank was blocked. …He advised me that as of that date, I could no longer trade, but could only hold, sell or transfer my portfolio. I was banned from trading in either US stocks or all others.”

o From a retired teacher in Germany – “I was denied the policy because I am an American citizen. My agent very clearly said that he could sell the policy that I wanted to any other nationality, except me-because I was American!”

o From an American working in Saudi Arabia – “As a resident of Saudi Arabia, I have twice been rejected as a customer, purely on the basis of my US citizenship. In both instances, I was told that increased administrative and compliance burdens imposed by US authorities have led the banks in question to refuse to open securities accounts for American citizens.”

o From an American in Japan – “All of these banks and institutions are cutting me off from participation in any but the most simple of basic bank account. Why? Because they do not want to take the time and instill the systems and carry the cost of reporting the income of each of their US citizen clients to the US government.”

o From an American married to a European – “I have been unable to gain legal advice in Switzerland regarding US Wills and Guardianships because [bank redacted] lawyers are ‘not permitted to speak to Americans about legal, tax or banking matters in specific terms.’”

o From an American married to a European – “The company who has been holding my modest UK share portfolio wrote to me in September 2010 saying they were closing my account. They were removing all US persons from their client base due to the increased reporting and audit costs placed on them by the Fatca legislation.”

o From an American in Europe with a foreign spouse – “They sent me a letter saying: Our records show that you are an American citizen. Because of various strict new American rules regarding securities accounts held by American shareholders, we are closing such accounts including yours.”

o From an American assigned overseas by his company – “I was extremely surprised and outraged by the fact that not one bank (including foreign branches of US banks!) would allow me to open a simple savings account to pay my rent and bills. All of the banks cited my US citizenship and the difficulties they experience with the US government.”

o From an American in Spain – “I have been forced to close a U.S. bank account due to being an overseas citizen and cannot open new bank or brokerage accounts in the U.S. I am also being denied the opening of new brokerage accounts in Spain.”
http://blogs.forbes.com/beltway/2011/06/20/why-obamas-fatca-law-is-a-threat-to-business-growth/

 

[bankside]

Rather than shutting Americans out of the rest of the world due to the hubris of their own government, I think all of us should just ban compliance with this FACTA nonsense and enact measures permitting reciprocal seizure of assets if the US is so bold as to try it. Americans who go abroad should not be denied the same access that we extend to all foreigners or dual citizens.

 

[MoltenRock III]

Rather than shutting Americans out of the rest of the world due to the hubris of their own government, I think all of us should just ban compliance with this FACTA nonsense and enact measures permitting reciprocal seizure of assets if the US is so bold as to try it. Americans who go abroad should not be denied the same access that we extend to all foreigners or dual citizens.

That's the thing Bankside, in both Singapore and Hong Kong (as well as others), it's actually against their own privacy laws. Not to mention exposing non-Americans to the prying eyes of Uncle Sam. This reminds me of the USA demanding all airline flights anywhere in the world, even if they weren't coming to the USA or even overflying it to turn their passenger lists over to run thru the US no-fly list. Obviously, that went over like a turd in a punchbowl and the US had to relent.

Much like the Patriot Act this is just another Big Brother info grab and privacy shredder, not to mention creating disincentives for the world to invest in the USA.

 

[RobinGoodfellow]

An American carries a concealed weapon on holiday within a Canadian city. We arrest him. He says "But in Texas it is allowed! You can't arrest me, for I am an American and as such then American law is the relevant law in this situation!" We laugh. He gets convicted of a crime. The US Embassy protests: Wait! He's an American! We laugh. The appeal is denied.

Bad example. Unless the American had some form of diplomatic immunity, he would rot in jail. In this case, the law of the land would apply. Even if he tried to run, and was able to run back to the US, odds are good extradition could get him back to face the piper. Of course, he had the immunity, he would have pay taxes anyway, as he was working on American soil.

That just means your example is just all sorts of suck...

RG

 

[JB3]

That is not correct. For example the former california governor Schwartzeneger has dual citizenship us and austria.

You fail to realize the point of contemption here : that US citizens are required to pay taxes to the USA is not the problem, USA can have the laws it wants. But to decrete that all others countries must apply to a US law and divulge bank accounts is ludicrous, preposterous, very rude and have no chance of success. In France if a politician were known to support this, it would be an uproar and his/her resignation very soon after.

They won't have a choice. They'll either cooperate, or they won't have the ability to do any business in the US.

 

[JayHawk]

Originally Posted by Fair Use Excerpt
This summer, the senior management of one of Asia’s largest financial groups is quietly mulling a potentially explosive question: could it organise some of its subsidiaries so that they could stop handling all US Treasury bonds?

“Right now my board is probably as concerned about political risk in America as Indonesia, from a business perspective – perhaps more so,” says the head of one large global bank.
http://www.ft.com/cms/s/0/4e6e31a6-9...#axzz1QK8QO46r

That is the best news I have ever read.

 

[Kulindahr]

Rather than shutting Americans out of the rest of the world due to the hubris of their own government, I think all of us should just ban compliance with this FACTA nonsense and enact measures permitting reciprocal seizure of assets if the US is so bold as to try it. Americans who go abroad should not be denied the same access that we extend to all foreigners or dual citizens.

I like it -- a general strike by all foreign financial institutions against nosy U.S. laws.

They won't have a choice. They'll either cooperate, or they won't have the ability to do any business in the US.

Don't be so sure there: a number of countries could respond, "Then we're calling your debt". Others could say, "Then no more exports from our country."

Arrogance is a sad thing; in this case it could lead to economic collapse for the U.S.

That is the best news I have ever read.

Care to explain?

 

[MoltenRock III]

That is the best news I have ever read.

So you think it's great that some countries might shy away or ban investing in America???