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The lives of US Americans living outside their country’s borders will soon become a lot more difficult. On July 1, the Foreign Account Tax Compliance Act (FATCA) will take effect, obligating all international financial institutions globally, with US clients, to report directly to the US Internal Revenue Service.
Designed to put a squeeze on citizens living abroad who are evading taxes, FATCA fails before even starting with its minority elitist target. With common citizens being the most affected by the invasive Act, they are the ones fighting back.
As I noted in my column on the issue, 2013 saw a record number of US Americans renounce their citizenship — with the Wall Street Journal reporting that by the end of the third quarter, 2,369 citizens had expatriated, marking a 33 percent increase over the previous record in 2011.
An even bigger issue for US citizens abroad is that, as a result of FATCA, financial institutions are now taking a thanks-but-no-thanks approach to having clients from the United States. In addition to hefty fines, banks will also be subject to withholding of 30 percent on their clients’ US-sourced income streams if they fail to comply with the law.
Passed in March 2010 as part of the Hiring Incentives to Restore Employment Act (HIRE), FATCA has been delayed several times to give foreign financial institutions time to be able to comply with the law’s substantial administrative burdens. In turn, what is happening is many are simply not taking on US clients at all.
And opposition to FATCA is gaining steam. While unknown to many US Americans living within the country’s borders for a long time, many, now that the enactment of the law is fast approaching, are catching on to what those who live abroad have known for some time. Though certainly not a humorous topic, this video, in its use of humor, is able to clearly point out all that is wrong with FATCA — and how it is an overt imperialistic act on the part of the US government.
If one line from the video could paraphrase the US government’s reasoning for FATCA, it would be this one: “We don’t like the way that you have been handling taxes for [US] American citizens in all of your countries. So, we’re going to put the United States Internal Revenue Service in charge.”
