Based on recent posts from Avent Strangel and others I think it is useful to re-post a dialog that I had with Democrats abroad official last November. For background I have voted mostly Democratic and generally in favor of liberal positions. I was active in the Democrats Abroad since 2008. The previous posts follow. 1) first exchange below; the 2nd) and 3rd respnses in comments: X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X-X- RE: REPEAL FATCA! After carefully reading the excellent report prepared by Democrats Abroad (*) I was puzzled as to why DA still did not immediately change to a policy to Repeal the FATCA Law. I expressed my consternation in postings on the Democrats Abroad (DAB) Facebook Page. Shortly thereafter, David Ferrell, Co-Chair of DAB made an inquiry to the DA hierarchy. David wrote: “Could you enlighten us on why the Democratic Party doesnt repeal or signigantly(sic) modify FACTA?” ADRIENNE JONES (Regional Vice Chair – Americas Canada) responded to David with a copy to Me: The following is her response and [my comments]: =========================================== David: I believe Ive made the point about FATCA repeal a non-starter several times. But, Ill do it again, as James doesnt seem to get the point either and persists in posting on Face Book. [I understand but do not agree. You have repeatedly made the point that repeal of FATCA is a non-starter for the Democratic Party. I and many others favor REPEAL because it the right thing to do; not because it will be easy or politically expedient. I AM PERSISTANT] FATCA was made into a law, designed to catch the many billionaires whove stashed trillions of dollars into tax havens around the world, evading taxes on income. [Congress FATCA was passed via a stealth rider thrown together and hidden at the last minute in the HIRE bill by Democrats. There was no “design” or cost-benefit analysis whatsoever; much less any analysis or discussion of how it would work in practice. Nor was there any thought given to the disruption it would cause in the daily lives of the 7,000,000 Americans living overseas.] The law is not going to be repealed in the foreseeable(sic) future precisely because it is the only instrument now in place to catch the sharks. The Republicans who are the ones who have made Repeal FATCA their mantra, yet with a majority in the House, never once tried to bring forward an actual bill to repeal FATCA. Not once. [I am convinced that it will be repealed or ruled unconstitutional. But it will only happen if will all work for that goal. It is NOT the only instrument to collect taxes in foreign accounts of homelanders. The amounts collected in the UBS / Swiss bank scandal were collected long before FATCA was enacted. The devastating effects of FATCA only began to be perceived as implementation of FATCA began in July 2104. Repeal FATCA is becoming a “mantra” of overseas Americans because it is the right solution. The Republicans Overseas are simply responding to the ever-growing outcry from the expat community. BTW, my friends know that I use the name of another marine animal in many internet posts. I am not a “shark”] They have, however, exploited the fear of FATCA to the nth degree with overseas voters, i.e. having meetings in Paris and London, and Belgium, to trumpet their Repeal FATCA cause, and their proposed suit, get this, against the Canadian government for signing the compliance agreement (Inter-Governmental Agreement). Why go to Europe for these meetings and not Canada? Well, because thats where the US overseas money is. [They (RO, AARO, ACA…) are RESPONDING to the justified fears of US persons abroad. Since you live in Toronto, I expected that you would know that Canadians filed the Canadian Lawsuit, in August to protect all Canadians from US extra-territorial aggression. RO is not involved in the Canadian lawsuit (although expats in general do wish them success.) The idea for the US lawsuit did, in fact, have its origins with RO. But now it is separate from the RO. Any individual and all groups are free to support or not as they choose. As you have clarified in this letter, DA chose to make this a partisan issue and is pursuing the same country exception as a partial, political expedient just to be different from the Republicans. There may be money “stashed” in Europe to avoid taxes but it is mostly from homelanders.] The IRS have(sic) in fact caught many sharks, but the unintended consequences puts a huge burden for US citizens who live in countries that have not complied with FATCA requirements, and a financial burden even to those who do live in countries that have signed such agreements with the IRS, like Canada. [Yes, the increased enforcement of existing laws by the IRS has identified and taxed individuals (mostly homelanders and NOT expats) with overseas funds in recent years. However, most of that was one time occurrence before FATCA came into effect. A large portion of the amounts collected was penalties and not actual taxes. Your ignorance of the FATCA law has caused you to get things backwards. The greatest burden on expats has been in countries that were earlier signers of the IGA’s. Expats in countries that have only recently signed (or not yet signed) IGA’s have not been directly impacted by FATCA, yet.] Shutting down FATCA wont help get back the trillions stashed in tax havens. FATCA, however, definitely does need modification. No question about it. [Here and in the second paragraph, you are apparently using trillions to in reference to money belonging to individuals deposited in financial institutions outside the US. For the 7,000,000 expats, this the accumulated after tax savings on income earned over several years in the countries where earned. Talking about getting back trillions from money “stashed in tax havens” is pure hyperbole. Especially given that the total annual US Tax receipts is approximately $3 billion. It would require a collection of about $140,000 from each of the men, women and children expats to reach even $1 billion in tax receipts. It ain’t there.] Democrats Abroad has, as the report states clearly and comprehensively, lobbied with Congressional leaders since 2011 to make changes to FATCA. This past year, the solution we put forward and believe would work, is the Same Country Exemption (SCE). This is: a US citizen holding financial accounts in the country of residence, would be exempted from FATCA reporting. Its a long haul to get Congress to do anything at all, let alone for overseas voters. Dems Abroad has a long haul in convincing the IRS and the Treasury to change the wording, and application, of FATCA for overseas Americans. [Since DA has been working on this since 2011, and only last year proposed the SCE you have proven that it will be a long haul for the Democrat Party. Shall we give the DA an A for effort and an F for results? Unfortunately, SCE would have been acceptable if some thoughtful lawmaker had included it in the original law. Now at the end of 2014 SCE is excessively little and way too late. The criminal damage already done to innocent “US persons” by FATCA as documented in the DA report cannot be undone.] At this point, the DA FATCA Task Force will continue to lobby in Washington to get support for our SCE solution. You, James and many others, should continue to lobby your elected representatives. Since now far too many are Republicans, lets see if theyll actually help change FATCA so ordinary citizens live abroad dont have this burden. [I have written many times to my representatives. They are the two Democrat Senators and one unopposed Democrat Congressional representative from Massachusetts. Only one has seen fit to give a ‘boiler plate’ reply referring to a completely different subject] I hope this helps, Adrienne [Sincerely, James Wattengel, Member of the Disgusted Party.] =========================================== (*) 2014 FATCA RESEARCH PROJECT Stories of FATCA Affecting Everyday Americans Every Day October 2014
Posted on: Thu, 15 Jan 2015 23:16:41 +0000
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