Taxes

Welcome to Berlin, Yankee! Hope You Brought a Mattress for Your Money!

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There are an estimated 7.6 million Americans living in foreign countries, give or take. They come in all shapes and sizes, but there are some broad types—young people in their 20s flinging themselves into the world to teach English, work for nonprofits, start businesses and/or seek adventure; peak-age professionals working for international companies or institutions; U.S. military personnel and their families; dual passport-holders more tethered to their second nationality; graying bohemians who never figured out how to go back; and even the occasional retiree making their Social Security checks go farther.

Generally absent from the expat cohort are the Mitt Romney-style super-rich who were the target of the Foreign Account Tax Compliant Act of 2010 (FATCA), a terrible law that forces all Americans (and their spouses) with foreign-based financial holdings of more than $10,000 to engage in absurdly detailed IRS reporting or face punitively steep penalties, while also forcing foreign financial institutions to rat on their American clients and even perform collections on behalf of Uncle Sam. All for the prize of collecting a very small sum in extra tax receipts—an estimated $1 billion or so per year, or enough to fund the federal government for about two-and-a-half hours.

The super-rich have reacted like the super-rich do: either by complying (why not, they're rich!), or by parking their money into what few countries and institutions that still refuse to do the bidding of the Internal Revenue Service.

But what about our initial groups of expats? They're screwed, as a new Wall Street Journal report makes infuriatingly clear. Excerpt:

It isn't what William Hart expected when he moved to Berlin from North Carolina nearly four years ago. This spring, the 24-year-old e-commerce analyst said he was rejected for an online brokerage account by Deutsche Bank AG, although he has a checking account there and worked as an intern at the company. In addition, a smaller local bank turned him down for an online checking account, and he says Wells Fargo & Co., his U.S. bank, closed his brokerage account when it learned he lives in Germany. […]

"I seem to exist in a no-man's-land," said Mr. Hart. "Can it really be that expats are facing such massive obstacles in basic financial matters?" […]

Among those affected by the tightened policies are retirees of modest means in communities around Lake Chapala in Mexico, where an estimated 10,000 Americans live. "It hit people out of the blue," said Ann Lewis, 75, a former small-business owner from New Jersey, who was notified in late May that her account with Banamex USA, a unit of Citigroup Inc., would be closed this past June 30. […] Ms. Lewis said she found Mexican banks expensive and harder to work with: Checks can take weeks to clear while exchange rates fluctuate, she said, and wire transfers can each cost $45 or more.

Judith Furukawa, an American living in Dubai who has been an expat for nearly 15 years, is willing to pay fees to wire money from her U.S. account in Pennsylvania—but her U.S. bank no longer accepts wire requests from overseas.

Americans abroad are also encountering troubles with U.S.-based investment accounts. In recent months, firms including Fidelity Investments, Charles Schwab Corp., T. Rowe Price Group Inc. and others have told overseas investors and advisers they may no longer buy or trade mutual funds.

For Allen Cutler, a U.S. citizen who has lived in the Philippines for 30 years and said he had an account at T. Rowe Price for two decades, the restriction is "very unsettling, leaving me with the feeling that more is to follow."

Whole thing here.

All of this was 100 percent predictable at the time of the law's passage, and has been very well covered in the press (including the news that as of today, the application fee for revoking U.S. citizenship—which record numbers of Americans have been doing—has been jacked up by the federal government from $450 to $2,350).

The plain truth is that U.S. politicians just do not care that their invasive laws screw over many millions of Americans while gratuitously pissing off friendly countries and foreign investors in the United States, all for the joy of funding the federal government for half an afternoon. Repealing FATCA should be on the front-burner of any politician claiming to stand for limited government.   

NEXT: Women's Love for Barack Obama Wanes

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  1. Not one more dime that can be cut.

    http://www.cbsnews.com/news/fe…..e-reveals/

    The agency paid an average of $680,000 each for 21 single-family homes to house Border Patrol and CBP field operations agents in Ajo, Arizona, a community in which home prices average just over $86,000, according to the watchdog’s report.

    1. What do you want them to do, let the American heroes who protect our economy from the scourge of eager, inexpensive labor go homeless?

    2. I’m trying to figure out what these BP agents are doing in Southern Arizona.

      Because it sure doesn’t seem to involve enforcing the immigration laws.

      1. Maybe they’re trying to waste as much money as possible to stop anything from getting done?

    3. Wow. What obvious graft.

  2. The plain truth is that U.S. politicians just do not care that their invasive laws screw over many millions of Americans while gratuitously pissing off friendly countries and foreign investors in the United States

    And there you have it. They really just do not give a shit. Fuck you, that’s why.

    1. “Fuck em, they aren’t going to vote for me anyways.”

      /typical fuckwit congressthing.

    2. Actually, they do care, immensely. This was designed to do both of those things, and it does them quite well. It panders to the worst of the populist crowd.

      “a feature, not a bug”

  3. All of this was 100 percent predictable at the time of the law’s passage,

    Foreseeable consequences are not unintended.

    1. “MegaloMonocle’s Iron Laws” doesn’t have quite the same ring to it.

    2. I still waver a bit on that iron law. Sometimes people are just stupid and lack foresight.

      1. And they are still responsible for the foreseeable results of their stupidity and shortsightedness.

        The law points out the way Mere Proles are responsible for the foreseeable results of their actions, regardless of whether those results were “intended”, but Our Masters can avoid such responsibility by saying the Bad Things they caused were “unintended”.

  4. …the application fee for revoking U.S. citizenship?which record numbers of Americans have been doing?has been jacked up by the federal government from $450 to $2,350.

    Welcome to the Hotel AmeriKKKa-fornicatedness, where you can check out, but you can NOT leave, unless you are bled dry first…

    1. In Germany, they have a word, “Geldscheisser”, meaning “gold shitter”, see http://www.panoramio.com/photo/88205146 for example. In the mid-1700s and so on, there were 40 tiny-German mini-nations you’d have to cross (from Switzerland or southern Germany), to sell your family home and take the money and run to America (which used to be a freer land than it is now). But to get there with any money left, after they’d “shake you down” on every border you would cross, before you got to your America-bound ship in Holland? My personal ancestors went through this? You would have to repeatedly eat your gold (where it could not be found and stolen, in those days before intrusive X-ray searches, thank you Government Almighty, may I have another?), poop it out, clean and re-swallow it, and move on to the next chess square. This is where we are headed for soon; watch OUT for those X-rays! Maybe we could say we are religiously opposed to X-rays, maybe that will get us by? I have “Googled” this extensively, to find this (what I know to be true), and all I can find is immature teenager-like giggling at the whole concept, and NO honest history of it? If anyone “out there” can help me out, please do, I am stumped? Anyway, Power Pigs in guv-mint? Money pigs? Nothing new here?

      1. Interesting.

        Today’s America: If you are a productive citizen who works overseas, we make your life miserable. But if you are an uneducated peasant in a Third World country, come to the USA and we will pay you!

      2. Its happening today again already… In India. See http://on.aol.com/video/seven-…..-517948893 … Sorry, I still cannot find this in German history.

  5. What kind of commie ingrate would want to renounce American citizenship?

    1. The kind of commie ingrate who thought he was governed by a Constitutional Republic of limited, enumerated powers, and has since discovered otherwise?

  6. The Shocking Real Reason for FATCA, and What Comes Next

    http://www.internationalman.co…..comes-next

    1. Very possible.

  7. Why not have SS checks electronically deposited into a US bank account with a debit card associated with it, and use the card at ATMs to withdraw cash? Any feedback on that idea?

  8. Well, this morning I indulged in attending the Republican Unity Breakfast, a whoopie function where the ones who lose the primary stand up and say they support the ones who won. Marilinda Garcia, nominee for U.S. House, and Scott Brown, nominee for U.S. Senate and the ex-Senator from Mass, were there, Rand Paul was up from Kentucky and U.S. Senator Kelly Ayotte was there. I addressed these persons individually. I showed them a copy of Obama’s long form birth certificate and said, “This is from the White House website and, sure enough, he was born in Hawaii, but look, his father was born in Kenya. Doesn’t that mean the Kenyan government has a right to claim him as a citizen born overseas, and impose Kenyan income taxes and reporting requirements (This is where Senator Paul’s face lit up in a smirk.) on him, just like the U.S. government does to U.S. citizens in Kenya, people who are no more American than Senator Ted Cruz is Canadian? He found out last year that he was a Canadian citizen. People are finding out that they are U.S. citizens facing serious criminal charges and devastating penalties because they didn’t file reports to the U.S. Treasury when they don’t even live in the United States.”

  9. People will be locked out of the banking system and have to use cash and bitcoin. Speak to “your” representatives about this as if it is a bad thing. The stuff will hit the fan when a few banks refuse to comply, and expats flock to those banks, which can work with each other and the central banks. Those banks, saving reporting costs, offer better interest rates, and more people flock to them. Complying banks go bust and noncomplying banks prosper. The end of New York City as an international banking center and the end of the U.S. dollar as the world’s reserve currency.

  10. Part of the problem is when some persons gave up their U.S.A. citizenship by becoming naturalized abroad. By U.S. statute, they lost citizenship, but SCOTUS reviewed that in light of the 14th Amendment and said, MAYBE, leaving it a question of the person’s INTENT to lose U.S. citizenship. Maybe they had a point. However, the problem is extraterritorial application of U.S. law. The 18th Amendment did not impose Prohibition in other countries.

    Did Queen Noor of Jordan (Born in DC) properly give up her U.S. citizenship at a U.S. consulate, or is there some question whether she might still be a U.S. citizen? Albert II, the reigning crown prince of Monaco, was born there, but his mom, Princess Grace Kelly, was born in Philadelphia. Did she properly give up U.S. citizenship BEFORE he was born, or is he subject to U.S. tax and reporting requirements?

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