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Really, Congressman Posey? Really?
Congressmen Bill Posey (R-FL), Mario Diaz-Balart (R-FL), and Gregory Meeks (D-NY) have introduced a bill to bar the Treasury Department from adopting rules requiring US Banks to report interest paid on deposits by non-resident aliens to their native countries. This shocking bill reinforces the message of Nicholas Shaxson’s book, Treasure Islands, that the US is one of the biggest tax havens in the world.
Posey put out a press release explaining his rationale for this astonishing legislation:
“If you’re an investor from a country with massive human rights violations or a corrupt regime, chances are you want your personal bank account information held in confidence,” said Representative Bill Posey, a member of the House Financial Services Committee. “By imposing this new reporting requirement, those depositors will think twice about where they invest their money and cause many to invest elsewhere at a cost of billions of dollars to our economy. This is the wrong time to encourage individuals to withdraw billions from U.S. banks.”
In a possibly related move, the Independent Community Bankers Association wrote to Treasury Secretary Geithner violently opposing regulations that require notice to other nations under US tax treaties and other safeguards. The ICBA claims that there are $4 trillion on deposit from non-resident aliens, which may explain why other nations might be interested in knowing where their despots and drug lords and tax evaders keep their money.
The US has been working hard to get other nations to disclose the foreign holdings of US nationals. For example, it forced the giant Swiss bank, UBS, to pay a huge fine and disclose the names of thousands of US tax cheats.
The key to an effective program for catching tax cheats is reciprocity. If we refuse to work with other nations, why would they work with us? This is the kind of law that will harm those efforts. Apparently Posey, Diaz-Balart and Meeks don’t care whether the US is able to continue to enforce tax laws against cheats.
Is there any piece of legislation that could embarrass our elected representatives?
34 Comments
Would it be fair to summarize their position as, “dirty money is just as green”?
“The US has been working hard to get other nations to disclose the foreign holdings of US nationals. For example, it forced the giant Swiss bank, UBS, to pay a huge fine and disclose the names of thousands of US tax cheats.”
I have been reading here for a couple of years and don’t comment as I’m just usually too busy. It’s not just the banks that will get a huge fine.
I do want to say something about this. I am an ex pat and the entire ex pat community has been up in arms. The government isn’t just going after big fish with tons of money. They are demonizing and harassing the middle class and poor ex pat community too. I have paid taxes to a country I no longer live in for years. Most of us ex pats do. The U.S. is the only country that taxes people who do not live there and get no benefit from paying those taxes. We’ve grumbled about that but, gone along for years.
There is more to this legislation than meets the eye. Despite filing our taxes what they want to do now is have you file a paper every year on your foreign accounts but, not just YOUR accounts, any account you have signing rights on. In a lot of cases you have ex pats who married someone over seas and who have checking rights on accounts such as spouses who take care of children at home but, the money in the account is made by their FOREIGN spouses. They are forcing our banks to disclose or else suffer a 30 percent penalty on any U.S. holdings which discourages foreign banks from investing in those U.S. holdings. That will NOT help the economy in the U.S. Some banks in the U.K. have started to try and deny U.S. citizens from opening accounts to avoid this issue.
A married couple where the foreign spouse makes ALL the money is not uncommon but, the U.S. takes their cut because the foreign spouse is unfortunate enough to have married an American. Now the foreign banks who obviously have no right to protect their own citizens are being bullied into disclosing these joint accounts.
Some people are withdrawing their money and putting it in local credit unions only. Not because they have a fortune to hide but, because they don’t! Families over seas are being hit hard too in this economy. We pay taxes to both countries. If you get caught doing that you are threatened to be charged with intentional fraud. Even in cases where NONE of the money was made by an American citizen.
What the U.S. is now doing is having you to get your foreign spouse to do the taxes this way “American for tax purposes.” If you do not disclose any account you have checking rights on that had more than 10,000 pass through it on any day of the year the fine is 10,000 dollars. This is placing an undo amount of hardship on families without a lot of money just because one member is American. In our situation one day last year our account did have the overage because my husbands mother, a CANADIAN died and left him some money that was only left to him. I will now be expected to pay the U.S. taxes on money that was never mine and belongs to a foreigner.
I am tired of being hounded like a dog and called a “over seas tax cheat” Some people are starting to feel they are being forced to renounce their citizenship to escape this constant hounding. There are almost five million Americans who live out of the country for extended periods of time. I have not lived there for 30 years and I’ve not had ANY benefit from the money I have had to give he U.S. None of us have. I had at one time thought we’d retire there. Not anymore.
They impose penalties on our foreign born non U.S. children when we die too if we leave them anything. I’ve talked to four people about this issue this week. One has already renounced their U.S. citizenship. I’m about to after all these years. Not just because of this but because the U.S. is never going to get Universal health care in my life time now as well as many other issues. The ex pat community has been trying to get some of these penalties and ridiculous witch hunt taxes looked at more closely. We are not “tax cheats” We are hard working people who do not live in the country of our birth. The U.S. government has become so punitive at this point it’s hardly worth bothering to keep citizenship.
Every time the government comes out with something like this they rarely go after the real criminals. They are attacking working people, the middle class with these new tax and banking requirements and intend to milk us bone dry. Frankly, if I have checking rights on my child’s Canadian account it’s none of the United States business. He isn’t American but, make no mistake they are going after these types of accounts too.
You know they never bring up all the years we have had to pay taxes to a country we do not live in but, constantly bitch about overseas tax cheats. The vast majority of ex pats are not in that category but, are sick and tired of all the extra paper work, IRS privacy invasions, and treasury department fear mongering. These new laws won’t make an impact on those rich enough to work around it. There are unintended consequences that reach far beyond uber rich “over seas tax cheats” here.
There are two new businesses in Toronto guiding people through the renouncing process. I have already contacted them. Three other people I know have too.
I just wanted you to understand that the U.S. has been making a lot of money off us for years when we have no real representation for paying it. And that this has consequences for working people that many Americans do not understand. I enjoyed your diary. Thank god I have dual citizenship and I’m looking forward to being ONLY Canadian. At least the taxes I pay to Canada go towards things I actually use.
Wow, did I rant or what. Sorry, it’s hard out here in butt hurt land for Americans abroad.
You’re a serf. Don’t start preaching, Obama might send a drone after you.
It’s too bad, I don’t think masaccio was intending to aim at expat
citizensserfs, but companies that offshore their profits and live here. You should make your whole comment into a diary, but contrast with the actual bad guys.How is anybody going to know if you don’t speak up about it?
Thanks, I know he wasn’t intending to direct it towards ex pats like me. It’s just that people living in the U.S.A. seem to think that these laws and new directives are going to catch the big fish when the government is aiming at people like me. They are aiming at our meager income and forcing us to give them money from our foreign relatives or else. We contribute to the U.S.A. a LOT but, don’t get the benefit of anything we give in. Just bring this perspective up. The actual bad guys will never get any sanctions but, we will.
Please take your jordans FORKING spam some place else, mobileas.
Wow– this really is a post.
So sorry, but people in the U.S.A. need to know these intrusive and punitive measures are being used to go after the middle class abroad and not the “tax cheats” Goddamn them for giving that impression when most of us pay taxes we get no benefit from.
“Thank god I have dual citizenship and I’m looking forward to being ONLY Canadian.”
Think again friend. It is now almost impossible to undo your American citizenship, because of laws designed to prevent billionaires from avoiding the inheritance tax by renouncing their US citizenship. American citizenship is now like herpes. Once you’ve got it, you can’t get rid of it, and as we all know, the American government considers itself free to reach (and assassinate) you if it wants to. There is no place to hide. Better we were all born somewhere else.
Thanks for mentioning the firms in TO that help you renounce. I didn’t think it was possible. Will google for them. I want out, too.
You didn’t rant, You made a coherent statement about US theft that few people who haven’t gone thru it know anyhting about.
Thanks.
The more I know about my gov, the less I like it. America didn’t used to be this rapacious. I wish I’d moved when Ronnie got the presidency; the thought flitted thru my mind, but I just moved across country and paid for the whole thing for me and my partner. So, I was trapped.
Of course, now I see that it’s impossible to avoid American citizenship, I suppose it wouldn’t have helped anyway.
Nowhere to run, baby, nowhere to hide.
He should try HP…see what they do
I’m still not sure I understand. I am under the impression that your total tax is the US tax, ie to the extent you paid foreign tax you are given a tax credit in the US so that you pay no more than you would in the US. Foreign accounts or investment income is subject to US tax but again no more than you ordinarily would pay. The idea of reporting foreign accounts is to prevent not reporting that income. Is this wrong?
Why is it that whenever pictures of these politicians accompany the articles writing about their wrongdoings, they always look like ghouls fresh out of a grave? It’s time to put a stake through their collective hearts and banish them to the hell they want to create for the rest of us.
Freeb, I certainly don’t have anything against ex-pats. It was my fondest dream to leave myself and I may do it yet; and my sister has lived overseas for decades.
Thank you for your explanation. It is indeed helpful.
That is the guy’s official photo, according to Wikipedia. He looks smarmy, like the guy who volunteers to usher at church, but only at funerals.
Adam Smith advocated taxing the rich,
checking excessive corporate power,
and providing safety nets, the latter expressly
because corporations are efficient in ways
other than that.
http://www.opednews.com/articles/2/opedne_james_py_060422_warped_interpretatio.htm
http://goo.gl/3UuQb
http://goo.gl/NRsjs
The world’s first Social Security System (Kaiser Wilhelm’s)
was a direct result.
EverNewEcoN
Actually I am not criticizing the longer length of your comment but instead am saying that your comment is a great one and would get more notice converted into a stand alone article or post. Please consider it. :-)
What the heck do you think those State Department folks in your country are there for if not to fight your battles as needed – same as the police in a local US town.
Your passport got you and gets you a great deal – if you do not want to pay for those services change citizenship.
I agree your two bit cheating on your taxes should not be a focus – but then the earned income benefit credit for the poor with its $500 benefit should not be allocated $10,000 of IRS audit time per audit. Of course your taxed overseas comment ignores the fact that you get a massive individual per return deduction just for being overseas, and then you get a foreign tax credit to mitigate the potential for double taxation – and indeed a foreign tax credit is standard under our treaties with most of the world – so citizenship in a foreign country and working in the US gets such a credit on their home tax return.
But you are correct, the rest of the world is indeed not on a world-wide income system – and that is so the rich can never get taxed. And Obama’s “grand bargain” ends our world wide income approach so as to go to the territorial approach. So the Obama sell out to the rich of a few 100 billion a year may well get you a few 100 of tax savings – and you will no longer be a citizen of the only country that taxes world wide income.
Oh you did not rant -
Money is personal – and you feel the tax is not as low as it could be.
It is a thought every voter has – and I was too hard on you – sorry.
Food for thought that this is just another dimension of an international system that every centralG is playing on:
“No One Is Illegal” (video)
We have all fallen for the scam and the arbitrary rules of theft that goes with our arbitrarily-assigned chattel status by the rich who have their bought and paid for politicians and police forces mete out their rules for the rest of us.
We have to figure out how to kettle the rich, their attack on civil society through fear tactics, their corrupt political pets and the police they use but first we have to unbrainwash ourselves. What goes on in the US is how that most countries on this planet run now through the efforts of the Economic Hit Men. The modern nation state is meant to be a prison nation run by the proxies of the 1%ers– multinational corporations– and articulated with other prison nations.
Food-for-thought:
“The Love Police kettling the London police” (video, March 26, 2011)
When you come before us and tell us that we are about to disturb your business, we say to you that you have made the definition of a businessman too limited in its application. The man who is employed for wages is as much a businessman as his employer; the attorney in a country town is as much a businessman as the corporation counsel in a great metropolis; the merchant at the crossroads store is as much a businessman as the merchant of New York; the farmer who goes forth in the morning and toils all day … is as much a businessman as the man who goes upon the board of trade and bets upon the price of grain … We come to speak for this broader class of businessmen. We do not come as aggressors. Our war is not a war of conquest; we are fighting in the defense of our homes, our families, and posterity. We have petitioned, and our petitions have been scorned; we have entreated, and our entreaties have been disregarded; we have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we petition no more. We defy them.- William Jennings Bryan
It is when those accounts in some cases don’t even belong to me. And really I don’t think we should have to pay taxes where we do not live. No other country taxes it’s ex pats. why should we? We get zero benefit from it. Roads, schools, police, etc. We don’t use those things but, we pay for them. It’s just that now the laws are so punitive with threats of taking 50 percent of your account should you make a mistake on one of these ever changes forms or break some new “rule” you didn’t even know about. The rules and requirements are always changing. Now they are more draconian than ever.
Thank you. I will.
Yes, part of the new law is that the day you renounce you are considered to have liquidated all your worldly goods including your home. If the amount is determined to be high enough then you pay an “exit tax” just for leaving. I don’t think we will have to pay that one. Yet.
I squished it. That clown needs to get a life.
I am changing citizenship. I’ve used my U.S. passport once in the thirty years. That’s a pretty expensive bargain. My Canadian passport gets me the same or more rights and protections.
Thank you so much.
Kassandra, The Americans like me who are thinking of or who are renouncing wouldn’t have thought of it before. It’s a sad and hard process but, there’s just no benefit to us to keep it anymore. When you renounce of course the U.S. can put your name on a “bad person” list. I can still visit though on my Canadian passport. Just might have to deal with being questioned by the gestapo more than usual. I can’t believe average people are having to think this way or feel this way. The one friend I have who just renounced is a Catholic priest. I don’t want to hide, I just want the U.S. to leave me and mine to live in peace for once.
What are your choices for destinations? I too have been thinking (luckily I have more than one nationality, do to my place of birth).
Given this Expat Tax – U.S. Taxation of American’s Living Abroad I perceive something to be missing from your frustrations about paying taxes. Please elaborate.
May your dreams come true.