Monthly Archives: January 2020

About #FATCA and @Citizenshiptax: Here is the @DemsAbroad Interview with @AmyKlobuchar on January 22, 2020

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This is an interesting interview with an interesting candidate. But, it is very clear that Senator Klocbuchar (1) believes in FATCA and (2) has no interest in abolishing citizenship-based taxation. You can pick this up at the 27 minute mark.

It’s interesting that the two candidates endorsed by the New York Times (Elizabeth Warren and Amy Klobuchar) are hostile (more so than most other Democrats) to the interests of Americans abroad.

Here is an interesting Facebook discussion about this interview, which includes the following comment:

DA Q and Sen K A on RBT: DA: Most Americans living abroad think that the time has come for residency based taxation, the principle guiding all other country’s tax systems and a fix for numerous unjust burdens on Americans living and working abroad. Now there are bipartisan, revenue neutral proposals to implement our Beatie that include robust provisions to protect the laws from abuse by tax evaders. All we need is a moment of leadership to get this done. Will you be that leader?

Sen K: Well, I have not taken a position to change that at this time. I’m always open to looking at things. And if I could just step back on our taxes in general. There just has not been the opportunity to step back and look at our tax code to see what works for regular people. Because when you think about it, when President Obama was in, we did some things, but we were in a deep recession and it was hard to make the changes that need to be made. Then President [00:03:30.0] Trump comes at it and they pass his tax bill, which really. Oh, wait. It was weighted toward people at the top and has added over a trillion dollars in debt. And when you look at his time period, while he gloats about what things, what’s happening in our country, we’ve had a 30 percent over the last decade, even before him slow down in startups. We call it the startup slump because of consolidations and other things. And we just don’t have a good tax enforcement, as I already mentioned. And then there’s just a bunch of things I think that we need to change. When it comes to our tax code, including closing some loopholes and doing something about the Buffett Rule and bringing in reversing some of the corporate tax cuts he made, I was in the group that wanted to bring the corporate tax rate down, but not to the level near the level that he brought it to. Every pointing went down was one hundred billion. And I would actually take a big chunk of that money and put it into infrastructure. Another chunk to start working on the deficit, which is brought to record levels. And I just think there’s much more we have to do to keep our economy strong for the long term.

The interview speaks for itself. It’s as though the Democrats think that the only purpose of life is to avoid taxes.

It’s pretty clear that a vote for the Democrats is a vote against Americans Abroad. (I am not, by this statement, taking any position on the Republicans.

About #FATCA and @Citizenshiptax: Here is the @DemsAbroad Interview with @TulsiGabbard on January 15, 2020

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With respect to U.S. FATCA and Citizenship-based taxation, her answers were:

1. FATCA: She would direct Treasury to take the necessary steps to alleviate the problems that Americans abroad experience with banking access.

2. Citizenship-based taxation: Bear in mind that the DA question always includes (1) a recognition that revenue neutrality is possible and (2) that any remedial legislation must be carefully constructed to “prevent abuse” (whatever that means). Ms. Gabbard said:

– in principle she believes in a move to residence-based taxation

– it must be constructed in such a way that the wealthy don’t leave the USA to avoid U.S. taxation

– it MUST be revenue neutral

From Jackson-Vanik To The HEART Act – The Evolution Of American Hypocrisy

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Introduction

The above tweet references a 2012 post from the Isaac Brock Society pointing out the hypocrisy of “Jackson-Vanik” and the United States. “Jackson-Vanik” – enacted in 1974 – was a U.S. law which imposed sanctions on countries who imposed unreasonable restrictions (exit taxes) on the rights of their citizens to emigrate to new countries.

By 1996, the United States (led by the Clinton administration) was imposing Exit Taxes on certain Americans who renounced U.S. citizenship. James Dale Davidson writing in “The Sovereign Individual” (1997) compared the justification (or lack thereof) for U.S. Exit Taxes to the rationale for Exit Taxes imposed by the East Germany, as follows:

If you accept the premise that people are or ought to be assets of the state, Honeker’s wall made sense. Berlin without a wall was a loophole to the Communists, just as escape from U.S. tax jurisdiction was a loophole to Clinton’s IRS. Clinton’s argument about escaping billionaires, aside from showing a politician’s usual disregard for the integrity of numbers, were similar in kind to Honeker’s, but somewhat less logical because the U.S. Government, in fact, does not have a large economic investment in wealthy citizens who might seek to flee. It is not a question of their having been educated at state expense and wanting to slip away and practice law somewhere else. The overwhelming majority of those to whom the exit tax would apply have created their wealth by their own efforts and in spite of, not because of, the U.S. Government.

James Dale Davidson – The Sovereign Individual page 117. (This book contains some of the most prescient observations about citizenship-based taxation I have ever seen.)

(Enacted as a revenue offset to the HEART Act in 2008, the United States of America now has the most brutal exit taxes imposed in the history of the world. In effect, it confiscates non-U.S. assets, acquired by people who did not live in the United States. Because of the confiscatory intent of the U.S. Exit Tax Regime, the Internal Revenue Code includes numerous reporting requirements whenever an individual renounces U.S. citizenship. To learn about the inner workings of the Section 877A Exit Tax – see the series of posts here.)

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