We all know how inefficient government is. After all, government paper shuffling is what people with no ambition or dreams go into.
Somehow, though, the government is amazingly efficient when it comes to what you owe them. Don’t pay up and the IRS will be all over you. If you’re still delusional enough to be doing business in California, the Franchise Tax Board might send the mob after you.
This weekend, I spoke with James Jatras again about the Foreign Account Tax Compliance Act – FATCA – and just how bad of a message it sends from the United States.
Signed by Barack Obama in 2010, FATCA is a bureaucrat’s wet dream.
Plenty of countries find the American government rather arrogant to begin with.
But in addition to being amazingly arrogant (more on that in a moment), FATCA is also a great example of how the government plays dumb when it suits them. Despite its efficiencies in extracting money from you, the government now claims it requires offshore bank account holders to fill out forms in triplicate to report their sins.
What sins, you ask? Why, having an offshore bank account. US citizens already have other obligations, including a form called FBAR, for their annual report to Uncle Sam. If you have $10,000 or more in a bank account overseas, you must file this form. It’s not like the Treasury doesn’t know what’s up.
But Big Government loves to make its serfs jump through hoops.
For those not familiar with FATCA, the milk cows aren’t the only ones targeted. The US government has decided in its infinite wisdom to force every sovereign government and every foreign bank to be unpaid tattletales to the IRS.
Just in case you risk fines that could easily swallow your entire offshore bank account, FATCA makes sure you seek atonement by demanding that said offshore bank phones home to Big Government. It outlaws bank secrecy – at least when dealing with US clients – in every country on earth.
FATCA forces banks and other financial institutions overseas to break their own country’s laws. While bank secrecy has been on the decline, some countries like Austria have been fighting for their right to keep it. Thanks to FATCA, as well as new laws in the EU, bank secrecy is dead.
And to think the average member of the “99%” is going around complaining about “the rich” and their numbered Swiss bank accounts. Those days are so long gone, it’s not even funny.
Leave it to the Land of the Free to tell other countries that their laws don’t matter.
Just when you thought the United States might be taking a break from bombing other countries and starting costly wars, they’re re-packaging their imperialism to take on a financial shade.
How do you think the US government would take to China or Russia demanding American banks spend billions of their own dollars to report on their respective citizens banking in the United States?
“How dare they?!”, I imagine.
But as well all know, the United States is the biggest and best-est country in the whole world and deserves special considerations. It allegedly did something super extra special a long time ago to make “America” better than everyone else.
Now, that financial imperialism and arrogance is shutting down bank secrecy around the globe. Americans have no right to privacy in banking anymore.
A quick read of FATCA will show you just how poorly written and ambiguous it is. I imagine that was done on purpose.
Just like Obamacare, FATCA will allow bureaucrats to interpret it however they wish and issue endless directives that eat away sovereignty and economic freedom bit by bit. Politicians won’t be happy until they kill off the entire offshore banking system and bring your money back where they can tax, seize, and confiscate it for any purpose they deem necessary.
Leave it to the United States government to create a bureaucratic nightmare so unfathomable that its wake effects every financial institution on earth.
Under FATCA, US banks will be required to withhold 30% of payments sent to banks that don’t participate. Foreign banks will be required to do the same, even amongst transactions outside of the United States. Banks must figure out which of their millions of transactions a day might involve a US citizen, a US bank, or a bank outside of the US that isn’t FATCA-compliant.
The main reason for FATCA is fear. The more the government can scare foreign banks, the less likely they’ll be to take American clients. It’s a capital control. Fortunately, my travels have shown that in many of the best places to bank, Americans are still welcome. But who knows for how long?
Once you get it through your head that government uses fear to control you in almost everything they do, you’ll be able to live your life working around their propaganda. Unfortunately, FATCA goes beyond typical government scare tactics and into the area that used to cause nations to call up the armies.
On our radio interview, James said that he is hopeful that Congress will be voting on the repeal of this monstrosity. I have my doubts, but we can only hope.
After all, economic freedom is going to zero with a bullet anyway.