"[T]he legislation's penalties may end up killing more U.S. jobs than all the call centers in India combined"

That's a line from this commendable Wall Street Journal column by William McGurn about the oft-lamented-around-these-parts Foreign Account Tax Compliant Act of 2010, or FATCA (rimshot). While President Barack Obama keeps hitting presumptive Republican presidential nominee Mitt Romney over offshoring and jobs, one of Obama's most economically deleterious laws continues inflicting damage largely off the journalistic radar screen.

"Within the United States," McGurn writes, "almost no American has heard of it. Save for the occasional article, it's gone largely uncovered. And just like ObamaCare, the nastiest, job-killing aspects will not hit until after this November's election."

McGurn points out that FATCA was the revenue-generating side of the Hiring Incentives to Restore Employment Act of 2010 (HIRE! God, I hate these people....)—"a jobs bill dominated by tax breaks designed to get businesses to hire unemployed Americans." So once again, government is "paying" for the economically dubious and morally spurious act of granting targeted tax breaks to favored corporations by screwing over the middle class.

The theory was that we would pay for the tax breaks by making fat cats hiding money in their overseas accounts pay their "fair share." The reality is that the tax breaks did little to dent unemployment, and the legislation's penalties may end up killing more U.S. jobs than all the call centers in India combined. Delayed once already, Fatca is set to take effect in January 2013. [...]

At the individual level, Americans are now required to report foreign accounts at thresholds beginning at $50,000. Failure to file, or filing incorrectly, means a heavy fine. Among the most wicked aspects of this legislation is that a taxpayer can rack up tens of thousands of dollars in fines even if he or she doesn't owe the IRS a dime in actual taxes.

Emphasis mine. Like default paternity judgments for children born by mothers that men have never met, the requirements of this intrusive new authority are as vague and bewildering as they are onerous and potentially ruinous. (For instance, the reporting threshold is $10,000, not $50,000, though the penalties go through the roof after the $50,000 level–up to five years in prison and a $100,000 fine.) As I mentioned in a tax-day piece, my paid tax professional had no clue how to interpret the applicable rules in my case. And again, this is money on which we have either already paid taxes, or which was accumulated by my then-foreigner wife before she was ever obligated to file U.S. taxes.

And as discussed yesterday and last week, these new rules are screwing over the six million or so Americans who live overseas. More McGurn:

Already, honest citizens are taking the hit. A woman emailing this reporter from Sweden says she's been shut out of a promising Information Technology partnership since the chief investor learned that having an American on board would mean opening the partnership's books to the IRS.

On this side of the Atlantic, Joe Green, chairman of Canada's Democrats Abroad [....] cited another example of the price U.S. expats are paying: American executives with foreign companies who "are being refused a promotion because it puts the company in a vulnerable position." [...]

[In President Obama's 2010 State of the Union address] he talked about the importance of being competitive, and he announced an initiative to double exports as a way of creating two million American jobs. Alas, it's hard to see how you increase American exports to markets overseas when you make it more costly and difficult for Americans to be in those markets.

It really is amazing how the party of NAFTA has degenerated into the party of FATCA.

(WSJ link via Amy Alkon.)

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  • Pro Libertate||

    Will no one rid me of this troublesome government?

  • o3||

    somolia weeps

  • Joe R.||

    It's too early to start drinking. Oh, fuck it.

  • Mr Whipple||

    Without government, who would print the money?

  • Pro Libertate||

    Banks, but I'm not opposed to some government. I'm opposed to this one and any government with too much power.

  • Scarecrow Repair||

    That would be any government which defines its own limits.

  • Pro Libertate||

    That wasn't how it was supposed to work here. Guess we should've been a little more vigilant.

  • Mr Whipple||

    Any government which is granted "special rights", will always end up abusing them.

  • Mr Whipple||

    I know that. But someone actually asked me that question.

    Geese.

  • Romulus Augustus||

    Obvious next step is to prohibit Americans from traveling abroad as this is offshoring hotel and other service jobs that would be retained in the U.S. if only citizens would stick to vacationing and business in their own country.

  • Raston Bot||

    But we have yet to slog through the crippling tariff phase. Or did I miss it?

  • Enjoy Every Sandwich||

    They'll just establish a mandate that every citizen must spend a certain amount of money on hotels etc per year--or pay a penaltax. Teh Soopreem Court hath spoken!

  • John||

    We are already almost there. The government considers your passport to be its possession. They already want to take the passports of anyone who who owes taxes. Once they do that, it is a simple step to taking the passport of anyone found to have a foreign bank account or asset.

  • Joe R.||

    They already do this with Cuba. I'm sure they can come up with a reason to ban the other 175.

  • RPR2||

    I'm sure it's a coincidence that every new regulation in the last few years favors big U.S. banks.

  • Pro Libertate||

    If we'd eschewed bailouts and let the big banks fail (all but a couple would have), we'd have seen the rise of a much more competitive financial services market, with many new players who largely hadn't behaved foolishly in the housing markets.

    Instead, we rewarded the idiots. This is what statism brings us--a distortion of markets and of common sense. All in the name of political rewards and payola.

  • daveInAustin||

    And if we had allowed GM and Chrysler to go through bankruptcy, we would see the rise of a more competitive US car industry.

  • Pro Libertate||

    Failure is an option, and it's a feature, not a bug.

    Also, you can lead a horse to water, but you can't make him drink. Your turn.

  • The Unknown Pundit||

    As Johnny Carson once said:

    You can lead a horse to water, but if you can get him to float on his back you really got something there.

  • emilysoccer||

  • Fist of Etiquette||

    'ello, what's all this then?

  • BakedPenguin||

    See Emily Play. Soccer, apparently.

  • Mr Whipple||

    WTF? They marked MY comment as "spam".

    FUTBOL

  • Mr Whipple||

    These squirrels are viscous little bastards. Dumb, too.

    And while I'm at it, I'm getting sick and tired of this site freezing my browser.

    This is like the worst chat room, ever!

    SOMALIA, ROADZ, FOR A SITE CALLED REASON.....DRINK YOU FUCKERS, DRINK!

  • R C Dean||

    These squirrels are viscous little bastards.

    They are slippery little fuckers, aren't they.

  • Mr Whipple||

    Damned spell check. I must have clicked the wrong "suggestion". I just got the keyboard dock for my tablet, and I'm still trying to get used to it.

  • fried wylie||

    "viscous" and "slippery" are totally different properties.

  • R C Dean||

    Damn. You're right.

    I guess when I see references to "viscosity" of motor oils, I was thinking it was the slipperosity.

  • Raston Bot||

    Wait a tic, if that meh movie/unwatchable sitcom Outsourced taught me anything, it's that our call centers are now moving to China from India. There was also a lesson about the National Electrical Code but I forget what it was.

    Also, what's the ideal diameter and length copper tubing for a wort chiller?

  • Pound. Head. On. Desk.||

    Also, what's the ideal diameter and length copper tubing for a wort chiller?

    I get best results from 15' of 3/8" OD copper for the wort tube counterflowing inside the same length (it actually ends up shorter for reasons that become evident if you construct one) 3/4" hose. I wrapped it around a heavy plastic roll core I had handy that gave it a 7" width by about 12" tall.

  • sarcasmic||

    I'm still using the immersion chiller I made way back when I was doing extract brews on the stove.
    It's 25' of 1/4" copper tubing, and chills five gallons of all-grain wort to pitching temperature in about a half an hour.

  • db||

    I can crash chill my wort in 12 minutes with my "Chillus Convolutus" from Morebeer. My old one was 25'of 3/8" copper in a hose but it had too much pressure drop for my beer pump. The Chillus uses a convoluted tube (nonstandard diameter but close to 5/8") of about 12' length and the delta P is way less.

  • robc||

    I recommend 50 feet of 3/8 inch tubing.

    But I use 25 of 1/4 myself. I had a 25 of 3/8th in the distant past.

  • Raston Bot||

    Thanks to all for your input.

  • Enjoy Every Sandwich||

    Already, honest citizens are taking the hit.

    As far as the statists are concerned, to paraphrase Rambo, "there are no honest citizens".

  • Loki||

    And thanks to the clusterfuck that is the US tax code, they're actually not that far off. Pretty much anyone could be audited and found to have "cheated" on their taxes. Of course to them that's a feature not a bug, seeing how that gives them a ready made excuse to imprison anyone at anytime.

  • Fist of Etiquette||

    I propose that no legislation can be passed unless its full effects are known and felt before the next election. Or unless the President's string-pullers reeeeeeally want it.

  • Pro Libertate||

    You mean Oprah?

  • Fist of Etiquette||

    "Everyone gets a new caaaar-arrrrrr!" (Unfortunately, it's a GM, and the price is added in your next year's tax filing.)

  • Pro Libertate||

    It's a mandapenaltax.

  • Joe R.||

    Also, election day should be April 16.

  • Pro Libertate||

    How different things would be if we all (all taxpayers, I mean) had to write a big fucking check on April 15 each year instead of having our employers deduct sums from us all year long.

  • ||

    Most people would just spend that money and then whine to Uncle Sugar that they needed exemptions or some such. And then those of us that played by the rules would have to pay even more. Kinda like we do now.

  • Pro Libertate||

    I think it would make a substantial difference in the government's ability to collect massive taxes. If we actually had the money and were asked to turn it over, well, taxpayer revolt is too tepid a phrase.

  • ||

    True.

  • Joe R.||

    Even quarterly would be an improvement.

  • The Heresiarch||

    For those of us who are self-employed, that's what you have to do. Nothing like writing $40,000 in tax checks for a quarter to drive up the anti-government (and specifically, anti-California) rage.

  • Ken Shultz||

    The theory was that we would pay for the tax breaks by making fat cats hiding money in their overseas accounts pay their "fair share."

    The assumption that other people owe you money--because they earned it and they have it--is the root of all evil.

    Craving things that don't belong to you--that's the true definition of greed. There's a commandment against that.

    We've done a pretty good job replacing the other commandments with logic--we need to do a better job with the tenth one.

  • John||

    the President and Lizzie Warren say they all got lucky to have that money and need to pay up.

  • Libertymike||

    While Scott Brown votes to extend another 9 billion in loan guarantees along with outright military aid of several hundred million more to Israel.

    As I predicted in January of 2010, Scott Brown would prove to be just another big government liberty killing statist stooge.

    The Senate, on a voice vote, approved the measure, 100-0. The House?

    Guess who was one of the two to vote no? Mr. Dingell of Michigan!

    Here we are 16 trillion in the hole and Sen. Brown votes to give billions more away.

    His ads in Massachusetts constantly tout his bi-partisanship and willingness to work with Maobama.

  • John||

    Yeah Mike we are broke because of $9 billion in loan guarantees to the Jews. It is all the Jews fault.

    Seriously Mike, how am I not supposed to think you are not a raving anti-Semite when you come up with something so out of left field?

  • ||

    Do you really think Fauxohontas wouldn't be a big government liberty killing statist stooge?

    If so, I've got some beach front property in Arizona for sale.

  • Ken Shultz||

    Scott Brown would prove to be just another big government liberty killing statist stooge.

    Scott Brown may be just another big government stooge, but just another big government stooge is vastly superior to Elizabeth Warren.

    Liz Warren fought hard for TARP so that she could be the one to administer it--which she did. Liz Warren fought hard for the creation of the "Consumer Financial Protection Bureau" so that she could be the one in charge of it.

    Liz Warren is not your run of the mill big government liberal. Liz Warren is a vile contagion. Liz Warren wants to win in Massachusetts, so she can get more credibility on the national stage--and make a run for president.

    Liz Warren already raises tons of money from Hollywood--and they aren't giving her money becasue they care so much about a Senate seat in Massachusetts. She's already setting up her campaign finance machine with a national reach...

    Liz Warren bragged, on the record, "I provided the intellectual foundation for Occupy Wall Street".

    If we make it out of this Massachusetts race with Scott Brown (even if he really is just another big government stooge), we should consider ourselves really lucky.

    If Liz Warren gets into the Senate by way of Massachusetts, she'll be there about as long as Ted Kennedy was.

    ...and she isn't about to stop with Massachusetts.

  • mad libertarian guy||

    Liz Warren bragged, on the record, "I provided the intellectual foundation for Occupy Wall Street".

    I'm not sure that I'd be bragging about "providing the intellectual foundation" of a movement that is best known for shitting in the streets and on police cars, co-opting private resources "just because", and setting up tent cities that were soon hampered with disease and vermin.

  • R C Dean||

    I know. I'm hoping an independent group has an ad in the can, for release in October, with that quote under the pic of the Occupado shitting on the police car.

  • fried wylie||

    Craving things that don't belong to you--that's the true definition of greed.

    More like the definition of "envy", but we can split the difference and buy a coffee.

  • Ken Shultz||

    Maybe we should start using the word "covet" again?

    That's what Obama is all about. That's what he sells in all of his speeches.

    He covets. He wants you to covet your neighbor's possessions, too.

    Obama is all about coveting. He's so greedy!

  • Drake||

    I read somewhere that we shouldn't "covet" other people's stuff.

  • CE||

    Since when does having 10K in a foreign account make someone a "fat cat"? 10K can't even buy a decent car anymore.

  • sarcasmic||

    "When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."
    --Frederic Bastiat

  • sarcasmic||

    That was supposed to be a reply to Ken.

  • John||

    Read a history of the French Revolution for an example of this. More than anything what happened was the monarchy ran out of money and the mid level astistocracy was looking at poverty. So their solution was to unleash the mob. First, on dissenters and tax farmers, then on the church. And when that money ran out, they found they were still broke and now couldn't control the mob. Once you start stealing it is impossible to stop.

  • some guy||

    Once you start stealing it is impossible to stop.

    Especially if you are convinced that you are stealing for someone else's benefit.

  • ||

    So this piece of shit is the reason it's been so hard for my boss to get our overseas operations up and running?

    Thanks a lot President Obama.

    (Oh and fuck you Tony, Shrike, Derider, and all of the other cocksuckers that voted for Obama in '08 and are planning on voting for him in November. I hope whatever vermin you fucktards produce throw your asses into the shittiest nursing home they can find.)

  • Loki||

    I hope whatever vermin you fucktards produce throw your asses into the shittiest nursing home they can find.

    On the bright side, that's practically a guarentee since they'll all be pretty much broke and incapable of taking of care of their fuckstick parents.

  • ant1sthenes||

    FATCA? Sounds like Congress is getting lazy. Can't even work a fucking T in there, assholes?

  • some guy||

    Foreign Account Total Compliance Act for Taxation.

  • ||

    Should've called it the Federal Under-Counted Kingly Yields Overseas Unbinding act.

  • Restoras||

    It was nice living in a free country for most of my 47 years. The next 40 or so (if I'm lucky) won't be so free, but at least I had it for a'hwile.

  • Lord Humungus||

    ^this^

  • John||

    Things go in cycles. Elizabethan England was a police state. This too shall pass. But it is going to get a lot worse before it gets better.

  • ||

    Well, they had to murder a king, have a theocratic despotism, and then bring in a couple foreign kings before they got rid of the police state. So what are we going to do?

  • ||

    Nuke it from orbit?

  • John||

    They were a police state because they were terrified of having a religious civil war like France and Germany did. And despite all their efforts, that is exactly what they got.

  • fried wylie||

    despite?

  • Pro Libertate||

    Strangely, I'm not content to let history sort out the mess, because I'd like to be free and to have my children be free during our lifetimes.

    I think a very long period of open tyranny and oppression could occur before things got better. Why allow that to happen?

  • John||

    I am not saying allow it to happen. I am just saying, no matter how bad things get, don't give up. All things can and do pass.

  • tarran||

    ^^^^^ This.

  • Pro Libertate||

    I agree with that, of course. Did we give up when the Germans bombed Pearl Harbor?

  • John||

    I think this situation absolutely requires...a really futile and stupid gesture...

    be done on somebody's part.

    We're just the guys to do it.

  • fried wylie||

    Did we give up when the Germans bombed Pearl Harbor?

    No, we bombed Australia like god-fearing, red-blooded Americans should have.

  • Drake||

    Things don't just "pass". Tyranny rarely passes into freedom peacefully.

  • ant1sthenes||

    We should work on resurrecting or cloning Cromwell.

  • Drake||

    We could use a good Lord Protector.

  • db||

    Elect a Mexican and Canadian to the presidency/VP?

  • Invisible Finger||

    Freedom is wasted on the old.

  • Finchster||

    Great post from Mark Steyn. Money quote:

    Most countries tax you if you live within their borders, some tax you if you live elsewhere but earn money within their jurisdiction, but only America claims the right to tax you simply for being American — even if you, say, live in Belgium but drive over the border to work in Luxembourg every day. This is unique to the United States: Spain taxes you if you’re a resident of Spain; Slovenia taxes you if you’re a resident of Slovenia; but America taxes you if you’re an American who’s working as a teacher in Gabon. You’re at permanent risk of double taxation, and the fines for minor and accidental infraction are arbitrary and confiscatory.

    As I say, no other developed country does this — although Eritrea does.

    He's got more on how under FATCA it's not worth it for a foreign bank to allow an American abroad to open up a checking account to pay utility bills.

    Maybe you don’t care about these people: Why can’t the business guy expand his business in Michigan or Idaho like true-blue Americans would do, etc? But at a time when America is ever more mortgaged to foreigners, making it more difficult for Americans to go out and earn money from the rest of the planet doesn’t seem a smart move.
  • ||

    Not a huge fan of NRO, but Steyn writes good stuff.

  • fried wylie||

    as vague and bewildering as they are onerous and potentially ruinous

    This sums up America 2012 pretty nicely.

  • DurkDing||

    Sometimes you just gotta throw your hands in the iar and shout, Whos your Daddy!

    www.Privacy-Been.tk

  • CE||

    One of the worst parts is that it's not entirely clear what they mean by a "foreign account". In some cases they make it clear on the forms that it is an account located outside the US, but in others it's murky -- what about Canadian ETFs in a US brokerage? How about closed-ended funds? There are some crossover issues with foreign PFICs where the rules may or may not be different.

    Since there's a 10,000 dollar fine if you mess up, lots of people are filling out and sending in forms that might not even be legally required. Why take the chance? Just inundate the IRS and the Treasury Dept with paperwork.

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