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Republicans urge FATCA repeal as expat Americans dump citizenship
| Published: | 11 Dec at 6 PM |
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President Obama’s flagship FATCA law is under fire from Republican party leaders as well as from the thousands of USA expats living overseas who have renounced their citizenship.
The controversial and much-hated anti-tax evasion measure was designed to stop American citizens hiding assets and cash in overseas tax havens, but has resulted in twice as many expats renouncing their citizenship than in previous years. Due to come into force next year, it’s been seen as an unacceptable added burden on top of the tax all American expats have to pay on their world-wide income.
From July 2014, taxpayers with holdings offshore will be forced to report any bank accounts with more than a $50,000 balance along with their regular annual tax filing, Thousands of overseas banks and financial institutions have been bullied by US government threats of huge fines into reporting their American clients’ financial details.
As a result, expat Americans are rejecting their country of birth in droves, with the number expected to soar as soon as the law is enacted. Republicans state that the result will be that lost tax gained by its introduction will be less than the amount the scheme costs to run.
A resolution calling for the repeal of the ill-thought out law is being drafted by the Republican National Committee and will be put to Congress. A spokesman told reporters that FATCA treats all expat Americans as criminals as well as violating their privacy rights.
The law came into being after an investigation by the US Treasury into tax evasion by wealthy nationals with secret Swiss bank accounts. After the closure of one Swiss bank, heavy fines levied on several others and unsuccessful court battles, Switzerland has now complied with FATCA requirements and opened its banks to scrutiny.
Overseas, foreign banks are now rejecting American customers, causing problems for expats as regards access to their pensions. The number of overseas financial institutions which are refusing to deal with US expats is expected to increase as the deadline for FATCA approaches.
The controversial and much-hated anti-tax evasion measure was designed to stop American citizens hiding assets and cash in overseas tax havens, but has resulted in twice as many expats renouncing their citizenship than in previous years. Due to come into force next year, it’s been seen as an unacceptable added burden on top of the tax all American expats have to pay on their world-wide income.
From July 2014, taxpayers with holdings offshore will be forced to report any bank accounts with more than a $50,000 balance along with their regular annual tax filing, Thousands of overseas banks and financial institutions have been bullied by US government threats of huge fines into reporting their American clients’ financial details.
As a result, expat Americans are rejecting their country of birth in droves, with the number expected to soar as soon as the law is enacted. Republicans state that the result will be that lost tax gained by its introduction will be less than the amount the scheme costs to run.
A resolution calling for the repeal of the ill-thought out law is being drafted by the Republican National Committee and will be put to Congress. A spokesman told reporters that FATCA treats all expat Americans as criminals as well as violating their privacy rights.
The law came into being after an investigation by the US Treasury into tax evasion by wealthy nationals with secret Swiss bank accounts. After the closure of one Swiss bank, heavy fines levied on several others and unsuccessful court battles, Switzerland has now complied with FATCA requirements and opened its banks to scrutiny.
Overseas, foreign banks are now rejecting American customers, causing problems for expats as regards access to their pensions. The number of overseas financial institutions which are refusing to deal with US expats is expected to increase as the deadline for FATCA approaches.
Comments » There are 5 comments
Daniel - US Citizen wrote 10
years ago:
It is a gross injustice that Americans are taxed on overseas income, income that is totally independent of any benefit of being A US citizen, that the United States has not materially enabled through infrastructure or law enforcement. There is no other country in the world the thinks that it owns their citizens and tries to tax income their citizens earn in other countries. The rapacious US government is pushing its productive citizens too far and one day they'll find their "slaves" slip out of their fingers like sand.
Ben wrote 10
years ago:
How can you renounce your citizenship? I think you are wrong YOU CANNOT RENOUNCE YOUR CITIZENSHIP. You may think you have but the USA government will not accept it.
Suzanne wrote 10
years ago:
You most certainly CAN renounce your citizenship, but it costs money, requires you to sign an oath, renounce it while outside the USA and it must be done in person before a consular or other official. Also, there is one other country which taxes its citizens regardless of where they live - Eritrea. All that said, it's a dumb policy but while FATCA may get repealed or modified, I don't think the tax policy will change in my lifetime.
Emmogene wrote 10
years ago:
We have become afraid of our government; afraid to speak out. The U.S.politicians for the last 7 decades have eroded the US constitution, Bill of Rights and basic freedoms of it's citizens. Americans were once proud of their country and now are so beaten down by NSA, the IRS, Washington, the Banking and Mortgage company crooks and FATCA. ALL our politicians need to be kicked out of office from the House, Senate up to the Presidency. Get rid of both corrupt parties. 9They NO longer represent us, work FOR us or have any LOYALTY to the citizens. They line their pockets, sleep with the lobbyists, do the bidding of the rich, the Wall Street and big business conglomerates who buy them outright. We have come full circle being overtaxed, overworked,overcharged and spied upon which was the state of the 13 colonies that initiated the writing of the Declaration of Independence. It is the decline of an empire, history repeats itself. I love my country but maybe it's time to leave. Another Nazi Germany in the making.
Peter A; Cohen,D. C. wrote 10
years ago:
I agree with Emmogene. I moved here to Papeete 2 weeks ago. After practicing in the states for 32 years, I had had it with the BS. Craziest thing that I have ever done. Major culture shock especially since I don t speak French or Tahitian yet. But it will be fantastic dealing directly with the people w/o insurance.
