"[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.)