United States Run Amok (again)

[JB3]

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



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.

?

And cut themselves off from one of the biggest sources of profit on the planet? Forget arrogance on the US' part: those countries (and their banks) would be stupidly irresponsible to make such a move based on a handful of their customers.

 

[MoltenRock III]

And cut themselves off from one of the biggest sources of profit on the planet? Forget arrogance on the US' part: those countries (and their banks) would be stupidly irresponsible to make such a move based on a handful of their customers.

Interesting. You automatically make anyone with a foreign account "guilty". The same could be said for anyone who wants to own a gun. What do you have to hide? Why do you need a gun? What crimes have you been committing? You might as well have the US pass a law that states that all US citizens can carry guns anywhere in the world they so chose with a valid US license. If any nation disagrees or forces those American's to abide by their own national laws, those countries will be cut off from any US investment opportunity.

What a load of shit.

 

[JB3]

Interesting. You automatically make anyone with a foreign account "guilty". The same could be said for anyone who wants to own a gun. What do you have to hide? Why do you need a gun? What crimes have you been committing? You might as well have the US pass a law that states that all US citizens can carry guns anywhere in the world they so chose with a valid US license. If any nation disagrees or forces those American's to abide by their own national laws, those countries will be cut off from any US investment opportunity.

What a load of shit.

This doesn't apply for every citizen in another country. It only applies for those citizens that have not completed the necessary tax filings. It is for that reason that they would be subject to the government seeking their information. Not filing makes them a focus. Not necessarily guilty, but it certainly makes them a target. (the government would HAVE to have a reason to be seeking this information. If you've been filing and they have no reason to believe you're falsifying your paperwork, they'll ignore you)

 

[MoltenRock III]

This doesn't apply for every citizen in another country. It only applies for those citizens that have not completed the necessary tax filings. It is for that reason that they would be subject to the government seeking their information. Not filing makes them a focus. Not necessarily guilty, but it certainly makes them a target. (the government would HAVE to have a reason to be seeking this information. If you've been filing and they have no reason to believe you're falsifying your paperwork, they'll ignore you)

Please keep up. The US is demanding customer lists of everyone that bank does biz with, and account amounts, even though 98% of that info will be non-US citizens and yet an even smaller number of tax cheats.

 

[Tengilethos]

Please keep up. The US is demanding customer lists of everyone that bank does biz with, and account amounts, even though 98% of that info will be non-US citizens and yet an even smaller number of tax cheats.

From banksides first post:

Starting in 2013, the IRS will require financial institutions outside the United States to disclose all accounts held by current and former U.S. citizens and green-card holders. They will likely have to file years of U.S. tax returns and detailed annual account disclosure.

Where does it state that they have to hand over account information of non-US citizens? This applies only to the accounts of Americans.

I found this part of the Forbes article the most important:

implementing these measures is likely to be costly; in jurisdictions such as Singapore or Hong Kong, the IRS rules appear to contravene local privacy laws. …

It violates privacy laws here in Germany as well. Privacy laws are a hot issue right now, we had several cases before our constitutional court where the judges nullified several laws that allowed increased surveillance by the state. It is often a political issue as well, talked about in political talk-shows. The EU parliament often criticizes security initiatives by the member states as violating the rights of the citizens to privacy. Another example:

http://www.guardian.co.uk/world/2011/jun/20/air-passenger-data-plans-illegal?INTCMP=SRCH

The European commission's own lawyers have warned that a joint US-European agreement to store the personal data, including credit card details, of millions of transatlantic air passengers for 15 years is unlawful.

The confidential legal opinion, passed to the Guardian, says the agreement to allow the US department of homeland security to store airline check-in data is "not compatible with fundamental rights".

The note by the commission's legal service, dated 16 May, says it has "grave doubts" that the passenger name record (PNR) deal, now being finalised, complies with the fundamental right to data protection.

The official legal opinion could prove crucial as the agreement, which has been negotiated by the commission with the US, needs the approval of the European parliament as well as ministers.

It is not meant as an attack on the USA, but just a political issue right now in Europe. Consider the opposition to Google Street View in several European states.

Against this background the new IRS rules are too intrusive in my eyes, because they partly violate the privacy laws in other states, which the US has no authority to do.

 

[JayHawk]

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



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.



Care to explain?

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

The only way the Dems or the Repubs will face the debt issue is to be cut off similarly to what happened to millions of over extended credit card users. A singular investment group may prove it is possible and then more and more might follow. Everyone wont just jump ship immediately. That would be excellent. Then the one third held outside the US would dry up slowly and we could manage a realistic budget without the possible high debt associated.

I am also a proponent of the yuan becoming the global currency. The world would get just what it deserves. That and Beijing couldn't play games with currency to continue the appearance of constant miracle growth.

Finally the debt held by China is tiny by comparison. This chart below shows 2008 while at 12 trillion so there are 2 more trillion out there broken up in a similar manner. It is not easy but definitely capable of overcoming a investment pull out by foreigners who want to harbor tax evaders.

 

[Kulindahr]

The debt held by China is big enough that if we keep on with a spineless Obama and a accomplish-nothing batch of Republicans, by 2020 the interest we pay China will be enough to fund their entire military. I don't call that "small".

The tax rates should go back to what they were under Reagan, except the top rate should be at what it was under Eisenhower -- but the difference would go to pay the debt, straight to the debt, do not pause in the general fund, do not.... It wouldn't be there for the politicians to play with, it would be there for the very patriotic reason of paying off our debt.

The place to give tax relief is on the bottom end: the individual exemption. Bounce it to the poverty line, next year. Add $2500 to that the next year, and again the next. At that point, connect it to Congressional salaries: if they vote themselves an increase, the individual exemption gets the same percentage increase. Tie to to COLAs as well; in fact make it the basis for COLAs -- no more percentage-of-what-you're-getting increases; every COLA would be a percentage of the individual exemption.

And when the debt's over half down, the top rate drops to Kennedy's 75%. When it drops to $2.5 tn, drop it to 2/3.

 

[JayHawk]

Certainly in terms of what you and I spend and what is spent on the military it is not small. However if they keep giving the credit we will keep taking it. I have no doubt 90% of our elected leaders are as bad at balancing the checkbook as the average overextended american.

Enough is enough.

 

[MoltenRock III]

Where does it state that they have to hand over account information of non-US citizens? This applies only to the accounts of Americans.

First off the law also applies to green-card holders, who are therefore not Americans. But a much larger issue is that every joint held account, trust, investment fund, accounts where an American is named as a beneficiary upon death, an account owned by a non-American but has an American as a signatory (IE.... a student studying abroad who's father has authority to transfer funds), life insurance policy or annuity with a cash value, corporation, pension plan, or any other investment vehicle whereby you may have one current / former American resident or citizen, must disclose the information of said vehicle including account numbers, other account holders, etc... The disclosures must be made once all the accounts in their totality a person holds hits or exceeds $10,000 even for just 1 day of the year. Remember, in the USA a corporation is treated as an individual as well.

In the UK alone, they fear their cost of compliance with this in billions of $$$. Additionally, it will require them to audit, send, track, receive, and confirm that every one of their investors has signed an affidavit that they are not an American, never have been, nor have ever held a green-card, or be required otherwise to conform to the US's IRS taxation scheme.

Jayhawk, you seem to think this law would only affect foreigners buying government debt, but it would also negatively affect US stocks, US listed companies issuing bonds (Ie.... Ford Motor, IBM, etc...), as well as any company considering opening a North American branch of their business. Why open a NA branch in the USA when Canada is far more welcoming with their immigration policy already, and now this oppressive law for the company founders / directors / foreign managers to have to comply with.

Consider:

"Fewer than a third of global investment managers are likely to meet an upcoming US tax legislation deadline, according to a report by KPMG, to be published on Tuesday."

Six per cent of respondents said they would disinvest from both the US equity and fixed income markets as a result of Fatca..."
http://www.ft.com/cms/s/0/ac61f4e4-9dc0-11e0-b30c-00144feabdc0.html#axzz1QPccmUUg

What happens to the nascent recovery of the US economy if 5% or 10% of foreigners decide the US simply isn't worth the hassle to invest in? Remember, from the article I first linked, this new FATCA requirement is only forecast to bring in an additional $870 million per year. This will ensnare average US people, most certainly not multi-millionaires and billionaires seeking to avoid taxation thru their litany of accountants and tax lawyers.

 

[MoltenRock III]

The tax rates should go back to what they were under Reagan, except the top rate should be at what it was under Eisenhower -- but the difference would go to pay the debt, straight to the debt, do not pause in the general fund, do not.... It wouldn't be there for the politicians to play with, it would be there for the very patriotic reason of paying off our debt.

If you make tax rates too high compliance plummets. Yes tax rates should go back to Clinton levels, however, it would be best to institute a flat-like tax. In Singapore for instance, it takes the average citizen less than 10 minutes to complete their annual tax forms. The tax rates are (in Singaporean $ which 1 S$ = US$ .81 :

First $20,000 0%
Next $10,000 3.50%
Next $10,000 5.50%
Next $40,000 8.50%
Next $80,000 14%
Next $160,000 17%
Above $320,000 20%

This would translate into these tax bills:
$30,000 - 350
$40,000 - 900
$80,000 - 4,300
$160,000 - 15,500
$320,000 - 42,700

There are no capital gains taxes, and no taxation on investment / interest income. Additionally, there are virtually no deductions except for charitable donations (which give $2.50 in deductions for every $1 given) and family hardships (ie... caregiver status, disabled parent, etc..) Additionally, a one time payment is made for people with children (1st child = $5,000, 2nd child = $10,000, 3rd & more = $20,000).

For corporations it is a flat 17% tax on income over S$300,000. (For corporations with under S$300,000 it pays 8.36%)

Having low taxes, yet very little deductions and tax shelters, means higher compliance, as simply paying a max rate of 20% on income is better than risking jail time, and added attorney costs in avoiding said taxation. The US tax code is such a disaster that it means tens of millions of Americans need accountants and lawyers to guide them in just filling out the forms, and maximizing deductions of all kinds.

 

[bankside]

The debt held by China is big enough that if we keep on with a spineless Obama and a accomplish-nothing batch of Republicans, by 2020 the interest we pay China will be enough to fund their entire military. I don't call that "small".

The tax rates should go back to what they were under Reagan, except the top rate should be at what it was under Eisenhower -- but the difference would go to pay the debt, straight to the debt, do not pause in the general fund, do not.... It wouldn't be there for the politicians to play with, it would be there for the very patriotic reason of paying off our debt.

The place to give tax relief is on the bottom end: the individual exemption. Bounce it to the poverty line, next year. Add $2500 to that the next year, and again the next. At that point, connect it to Congressional salaries: if they vote themselves an increase, the individual exemption gets the same percentage increase. Tie to to COLAs as well; in fact make it the basis for COLAs -- no more percentage-of-what-you're-getting increases; every COLA would be a percentage of the individual exemption.

And when the debt's over half down, the top rate drops to Kennedy's 75%. When it drops to $2.5 tn, drop it to 2/3.

What do you do about off-shoreing of billionaires?

For instance, most countries in the world can now accommodate billionaires in the style to which they imagine themselves to be entitled.

If you tax them too much, they could leave too. Take a business like Apple; it's intellectual capital is in the US, but that could move overnight, literally on the next jet out. Given the right tax rate, they could afford to move every last one of them, and no one would notice a reduction in their quality of life at all. They have to build a new headquarters compound anyway. The production is already in China. Why not the headquarters too? <cough>lenovo</cough>

What do you do about off-shoreing of intellectual capital that feels under too much pressure?

(not that I'm broadly opposed to your plan, and I'm certainly not saying roll over.... just pointing out times have changed and it might not be that simple....)

 

[JayHawk]

If you make tax rates too high compliance plummets. Yes tax rates should go back to Clinton levels, however, it would be best to institute a flat-like tax. In Singapore for instance, it takes the average citizen less than 10 minutes to complete their annual tax forms. The tax rates are (in Singaporean $ which 1 S$ = US$ .81 :

First $20,000 0%
Next $10,000 3.50%
Next $10,000 5.50%
Next $40,000 8.50%
Next $80,000 14%
Next $160,000 17%
Above $320,000 20%

This would translate into these tax bills:
$30,000 - 350
$40,000 - 900
$80,000 - 4,300
$160,000 - 15,500
$320,000 - 42,700

There are no capital gains taxes, and no taxation on investment / interest income. Additionally, there are virtually no deductions except for charitable donations (which give $2.50 in deductions for every $1 given) and family hardships (ie... caregiver status, disabled parent, etc..) Additionally, a one time payment is made for people with children (1st child = $5,000, 2nd child = $10,000, 3rd & more = $20,000).

For corporations it is a flat 17% tax on income over S$300,000. (For corporations with under S$300,000 it pays 8.36%)

Having low taxes, yet very little deductions and tax shelters, means higher compliance, as simply paying a max rate of 20% on income is better than risking jail time, and added attorney costs in avoiding said taxation. The US tax code is such a disaster that it means tens of millions of Americans need accountants and lawyers to guide them in just filling out the forms, and maximizing deductions of all kinds.

Sounds quite efficient. I have been saying for a long time that we simply need a easy to compute tax code that removes the hidden shelters that only the rich can afford. Everyone pays their shares and everyone receives similar benefits in governmental provided infrastructure. Should be a simple concept but somehow we make it so difficult that people are forced to play games with legality.

This FACTA based demand is simply a knee jerk reaction to a bigger problem.

 

[bankside]

If you make tax rates too high compliance plummets. Yes tax rates should go back to Clinton levels, however, it would be best to institute a flat-like tax. In Singapore for instance, it takes the average citizen less than 10 minutes to complete their annual tax forms. The tax rates are (in Singaporean $ which 1 S$ = US$ .81 :

What does that include? Are there other payroll deductions (either mandated, private, etc.) such as pension, employment insurance, health care...?

 

[BostonPirate]

First off the law also applies to green-card holders, who are therefore not Americans.

then let them stay home and get a job there so the law does NOT apply to them.

Molten? you have turned into an anti american knee jerk poster. Any chance you can get to point out how HORRIBLE america is, you take, even if its to point out lies and irellevant information.

Its tiring to have to sift through your posts for hints of truth.

Green cards are work permits, and if green card holders don't want to pay taxes, then the republicans are right. THey are here to leach off of our society.

which way wil the wind blow to change your argument next, I wonder, just to make america look bad?

Did YOU lose your green card?

 

[MoltenRock III]

then let them stay home and get a job there so the law does NOT apply to them.

Molten? you have turned into an anti american knee jerk poster. Any chance you can get to point out how HORRIBLE america is, you take, even if its to point out lies and irellevant information.

Its tiring to have to sift through your posts for hints of truth.

Green cards are work permits, and if green card holders don't want to pay taxes, then the republicans are right. THey are here to leach off of our society.

which way wil the wind blow to change your argument next, I wonder, just to make america look bad?

Did YOU lose your green card?

Get over yourself. I was born and raised in America, by American citizens, so I'm a citizen moron.

Funny how you claim I "lie" and yet you only can post snotty, personal attacks vs. any facts or disprove any of the things I post. Did you bother to read all the sources I posted backing up my concerns about this law? They must be lying too eh?

And if you bothered to even read this thread, I've always stated people need to pay their taxes. I certainly do. However, this law is stupid in the fact that it requires massive disclosures and places hardships on everyday expats, families of 1st, 2nd, and even 3rd generation immigrants who are in the US legally and even as citizens. It will affect everyday Americans who have kids that study abroad. It will affect investments in the USA by foreign banks and investment firms thus slowing growth, raise interest rates, and slow stock market gains of everyone with a 401K. That means YOU too BostonP.

For me? It just means my tax compliance cost will go up from it's current $3,500+/- to $4,000+/-, nearly 85% is the US compliance cost, of which my only income from US sources these days are my investments.

BP, you're as bad as the Republicans under Bush who told everyone who was against or concerned about the Iraq war to "shut up", "stop lying", or say "if you don't like it, leave".

 

[BostonPirate]

Greece is an example of how negatively the choices of Euro banks can adversely affect the stock market. Minimizing that effect to a small degree is good.

Regulating the way the international banks affect us is one way the nation can get a more stable economy. The USA is bleeding because our tax code is Riddled with holes, it is basically swiss cheeese, and we would prefer the swiss have less of our cash and the USA have more.

I dont care how much you whine about it, you have a grudge and you grind your ax weekly here. You can do that, but I am sure there are quite a few here who feel as I do, and filter these threads through that lense.

I on the other hand have been straight forward... I tow no party line. If you think that because I agree with American Exceptionalism and Capitalism, that you can tar me with the words "as bad as the republicans" you can go for it.

Lets see how that one flies.

 

[bankside]

boston.

95% of the world does not agree with american exceptionalism.

yours is the path to ruin, for your own country. americans are going to get steamrollered if your attitudes prevail, because the rest of us won't put up with it. the united states is a tiny country, and in the short term (30-40 years) it cannot remain the tail that wags the dog. you're not asking the other 95% of us to acknowledge the US as a good place and a friendly neighbour. you're asking us to believe it is the best place, and that the rest of us should pay fealty to america as though we were under the thumb of ancient rome. it's not going to happen.

good luck to you.

 

[BostonPirate]

boston.

95% of the world does not agree with american exceptionalism.

yours is the path to ruin, for your own country. americans are going to get steamrollered if your attitudes prevail, because the rest of us won't put up with it. the united states is a tiny country, and in the short term (30-40 years) it cannot remain the tail that wags the dog.

good luck to you.

Thanks

I just wanted to remind everyone that I have been clear and consistent.

American exceptionalism refers to the theory that the United States is qualitatively different from other nations. In this view, America's exceptionalism stems from its emergence from a revolution, becoming "the first new nation",[1] and developing a uniquely American ideology, based on liberty, egalitarianism, individualism, populism and laissez-faire. This observation can be traced to Alexis de Tocqueville, the first writer to describe the United States as "exceptional".[2] The term "American exceptionalism" itself was first used by members of the American Communist Party in the 1920s, in reference to their belief that "thanks to its natural resources, industrial capacity, and absence of rigid class distinctions, America might for a long while avoid the crisis that must eventually befall every capitalist society".[3]
Although the term does not imply superiority, some writers have used it in that sense.[1] To them, the United States is a "shining city on a hill", and exempt from historical forces that have affected other countries.[4] In the 1960s "postnationalist" scholars rejected American exceptionalism, arguing that the United States had not broken from European history, and had retained class inequities, imperialism and war. Furthermore, they saw every nation as subscribing to some form of exceptionalism.[5]

http://en.wikipedia.org/wiki/American_exceptionalism

The reason it is rejected by the rest of the world is because everyone else tends to think the nation they are in is the most exceptional.

I have always believed that if you think america is a bad place, but you aren't really willing to stick it out and stick around to fix it, then rescind your citizenship and live in that NEW "shiny city on a hill" you have found.

IF you are not american and you don't feel that your nation is exceptional and above the others? I suggest you find one that is.

IF you, like the vast majority in the world, believe that your home nation is the the best, then bravo. Loving your home is a good thing.

People automatically think that because I have progressive social ideas, that I ought to not believe that america is still the best place to be on the planet. It reinforces the idea that liberals hate america.

It is foolish.

 

[MoltenRock III]

Regulating the way the international banks affect us is one way the nation can get a more stable economy. The USA is bleeding because our tax code is Riddled with holes, it is basically swiss cheeese, and we would prefer the swiss have less of our cash and the USA have more.

So because the US tax laws are so broken, other countries have to pay to help fix it for the US.

I on the other hand have been straight forward... I tow no party line. If you think that because I agree with American Exceptionalism and Capitalism, that you can tar me with the words "as bad as the republicans" you can go for it.

You "tow (sic) no party line"? Then I'm sure you studied the issue, reviewed the pros and cons of how it might help and / or hurt the US before reaching your answer which was: "so be realistic and think about ALL the sides of this thing". You then went on to state that this new law would "save WIC". How is this law which is estimated to bring in $870 million per year going to "save WIC", that costs $6.4 billion per year?

Additionally you go on to say, "You are underestimating just how much freedoms americans have surrendered to the politics of fear," while in the same breath voice agreement with a law that forces many Americans to surrender even more freedoms. You don't think this honestly is an invasion or at least an encroachment on unreasonable search and seizures?

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.

This is simply untrue. FATCA was passed under the Obama stimulus bill, thus it is a law that was created, passed, and signed by the President. This bill does in fact dictate how foreign countries must comply with US law or face fines and levies.

Perhaps you need to reexamine "all sides" before staking a position.

 

[BostonPirate]

So you are saying you don't like Obama's stimulus plan?

that was two years ago

Funny you haven't mentioned it until now.