The CEO of one of the world’s largest independent financial services organizations has today launched an “urgent call to arms” for the Trump administration scrap the Foreign Account Tax Compliance Act (FATCA).
Due to new development, Nigel Green, founder and chief executive of deVere Group, and Jim Jatras, his co-leader of the Campaign to Repeal FATCA, are asking U.S. citizens to immediately to contact their senators to demand that they back a new, high-profile move to have this controversial personal data reporting law abandoned.
Mr Green comments: “This week the Senate version of the tax reform bill will come to the Senate floor. The Campaign to Repeal FATCA has learned that Senator Rand Paul (R-Kentucky) plans to offer as a floor amendment his bill S. 869 to repeal the so-called “Foreign Account Tax Compliance Act (FATCA).
“The Campaign to Repeal FATCA is asking everyone immediately to contact your Senators with this simple message: ‘Support the Paul Amendment to Repeal FATCA!’
“Given the partisan divide in the Senate, it is especially important to contact Republican Senators. If your state has one from each party, contact the Republican first!”
The Campaign has issued a suggested draft message you can use via the email contact.
Dear Senator [Name]:
As your constituent, I strongly urge you to support the floor amendment to be offered by Senator Rand Paul to repeal the so-called Foreign Account Tax Compliance Act, or FATCA. Despite the claims of its sponsors when it was passed in 2010, FATCA is a failure in its supposed aim to recover offshore tax assets hidden by “fat cats.” Instead, it has imposed massive costs on middle class Americans, violated Americans’ privacy without probable cause, and led to a huge increase in U.S. citizenship renunciations. Please support the Paul Amendment to repeal FATCA!
Jim Jatras adds: “Time is of the essence. This is an urgent call to arms to have this useless and dangerous law scrapped. Thank you for your help at this critical moment.”
The GOP called for repeal in its 2016 Platform. “The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause. Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, FATCA not only allows ‘unreasonable search and seizures’ but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas.”
FATCA fails in its stated purpose of recovering tax revenues. On enactment in 2010, FATCA was scored as raising about $800M per year. According to Texas A&M law professor William Byrnes, actual recoveries are closer to $100-200M per year and falling. FATCA will soon cost more than it brings in.
FATCA is an indiscriminate violation of privacy. FATCA data reporting requires no probable cause or even suspicion. Unlike domestic 1099s and W2s, no taxable event is required. Compliance burdens fall disproportionately upon people of moderate means, few of whom are engaged in evasion or owe any tax. Foreign banks’ denying services to Americans leads to increased U.S citizenship renunciations.
FATCA is costly. Estimates of global compliance spending rely on aggregation of per-institution costs: millions for each small bank, hundreds of millions for a big one. One projection puts cumulative cost at $58 to $170 billion. This is an order of magnitude greater than any recoveries from FATCA.
FATCA relies on Obama-era Executive overreach. Because of other countries’ privacy laws, FATCA is unenforceable without so-called “intergovernmental agreements” (IGAs) invented by Tim Geithner’s Treasury Department. The IGAs are not authorized by statute or submitted to the U.S. Senate as treaties.
FATCA threatens our domestic financial industry. Reciprocal “Model 1” IGAs promise “reciprocity” from U.S. domestic banks. This threatens massive FATCA-like costs on U.S. banks and consumers.
Keeping FATCA on the books risks future harm. The OECD, which for years has sought to extinguish personal financial privacy and create a worldwide financial data fishbowl, has praised the IGAs as a “catalyst” to that end. If FATCA remains on the books, the next Democrat Administration and Congress may press reciprocity on domestic American financial firms to create a global FATCA – or “GATCA.” This is the opposite of what the GOP Platform promised.
Jim Jatras concludes: “Transparency is when citizens monitor government. When government monitors citizens, that’s tyranny.”