Open letter to Mitt Romney

Dear Presidential Candidate Romney:

I am writing this open letter to you because I believe that you will be the next President of the United States of America. I respect you for your commitment to public service. I respect your patriotism. I am aligned with you when you say that “you will never apologize for America”.

I want to alert you to an issue that may force you (for all practical purposes) to have to “apologize for America”. Of course, you can change this. Although I am certain that your commitment to public service will continue irrespective of whether you become our next president, I do believe that you are America’s best option to guide the country for the next eight years. I support you. You have repeatedly said that you would “never apologize for America”.

The world in general and the United States is suffering an economic crisis – of a magnitude not seen since the 1930s. Although there are many problems, the bottom line is that unemployment is  high. There just aren’t jobs. I agree that our current president, (probably since he has neither had nor created a job) has no ability to guide our economy toward employment. I agree with you when you say:

“Obamanomics is not working.”

The bottom line is that “Obama means not working”.

President Obama doesn’t understand that businesses and people create jobs. Governments do not create jobs. Nevertheless, in 2010 Obama signed into law the “HIRE Act” – (he would create some jobs by passing a law). This stands for “Hiring Incentives To Restore Employment”. Like most bills in Congress, the HIRE Act was subjected to very little debate. It does however, contain a Trojan Horse provision (of which I believe few Congressmen were even aware), called FATCA “Foreign Account Tax Compliance ACT”. Governor Romney FATCA will put you in a position where you WILL have to apologize for America. I urge you to read about FATCA. It is an act of breathtaking imperialism It does two things:

First, in relation to U.S. taxpayers – it imposes breath-taking, far-reaching information reporting requirements on U.S. expat citizens. While these people are U.S. citizens, they do vote. (However, many of these expats are considering renouncing their U.S. citizenship.) If you want to learn why, I invite you to listen to a FATCA radio interview given by American Citizens Abroad. That said, for all Americans, FATCA results in control of capital outflows outside the United States. It is in effect the new “Berlin Wall“.

Second, in relation to foreign countries – it turns non-U.S. banks and financial institutions into reporting agents for the IRS. Leaving aside the moral and legal issues. The compliance costs will be enormous. For more information about the effects of FATCA on foreign financial institutions see:

http://danieljmitchell.wordpress.com/2011/06/20/fatca-law-is-an-international-version-of-obamacares-1099-provision-a-nightmare-for-cross-border-economic-activity-that-is-undermining-investment-in-america/

http://www.abbl.lu/news-publications/news-archive/abbl-news/fatca-anti-american

In order to understand this, one must look at the world through the eyes of a country outside the United States. Let’s imagine that we are in the U.K.

I love London (apologies to London, Ontario), England. It’s  the greatest city in the world. When I disembark at Heathrow Airport, I feel like I am in the center of the world. At one time (before debt crippled England – is there a lesson for America?) it was the center of the world. You can reach anywhere from London in approximately ten hours. Trouble is that I can’t go there as often as I like. As a result, I watch the BBC.

Last night I watched the BBC business news. The commentary included issues dealing with China, Australia and Japan. Interestingly these are three countries that have said that they will NOT comply with FATCA. The news continued on to a discussion about the European debt crisis – noting that Europe is China’s biggest trading partner. If there was any BBC business commentary about the U.S. it came at the end and was basically irrelevant. The point is that the United States is not the center of the world. Yet, an “ignorant and arrogant Congress” has passed FATCA – the U.S. attempting to impose its will on the world. I predict that FATCA will be the end of the U.S. as a world power. At a bare minimum it will accelerate the trend of U.S. citizenship renunciations. It will give foreign financial institutions every reason to avoid the U.S. (Taiwan has already made it clear that it will buy fewer U.S treasury bills). FATCA will begin a chain of events that will almost certainly result in the U.S. dollar ceasing to be the reserve currency of the world. I am not saying that all of this will happen immediately. But, it will happen gradually and irrevocably. As it currently stands, the U.S. has few friends and it is developing (courtesy of FATCA and other intrusions into the sovereignty of other countries) many enemies. Once, the U.S. is sidelined, (and sidelined it will be) it will not return to its global dominance.

FATCA should never become law, but it will become law. As Winston Churchill said (to paraphrase): “You can always count on the Americans to do the right thing once they tried everything else”. Once FATCA becomes law, there will be no way to reverse the effects in the international community. I imagine a scenario where on January 1, 2015 (one year after the implementation of FATCA) a smug U.S. Treasury Department will proclaim FATCA a success. Remember that in March 2003 President Bush proclaimed the invasion of Iraq to be a success. There are still U.S. troops in Iraq. The decision to bring the troops home is not because of victory in Iraq. It is because:

–        It will help Obama’s chances of being re-elected;

–        The U.S. can no longer bear the financial burden.

FATCA will erode U.S. power and influence. The erosion will be slow at the beginning. But, the erosion will pick up speed like a locomotive. Why? Foreign nations will actively seek out reasons to not deal with U.S. dollars and to not deal with U.S. citizens. (This is a very dangerous situation given the levels of U.S. debt and the need to sell its Treasury bills.) Does the U.S. government really believe that the rest of the world must do business with the U.S.? After all, what does the U.S. even produce? Is the U.S. a particularly resource rich country? This is the simple logic of the situation.

Now let’s add some context. China, India, Brazil (to name just a few) are populous countries with high rates of economic growth. The U.S. has a low rate of economic growth. India is a country with a young demographic. In other words, there are enough young people in the system to pay the taxes to support the old. The U.S. is an older demographic. Social Security is bankrupt. As goes demographics, so goes the wealth of nations. China is a country with little or no debt. The U.S., like many of the democracies in the west, has massive unsustainable debt.

I am not suggesting that the U.S. is likely to become an “economic backwater” in the next decade. But, after that all bets are off. I once heard it said that:

“People overestimate what they can accomplish in one year and underestimate what they can accomplish in ten years.”

FATCA will give foreign countries strong incentives to avoid dealing with the U.S. These disincentives to dealing with the U.S. will provide strong incentives to develop business and political arrangements that will not include the U.S. Every school kid knows, that he can’t force somebody to socialize with him. The U.S. government and U.S. citizens will become pariahs around the world.

Governor Romney, I am writing to you for two reasons:

First, I believe that you are the most likely candidate to be the Republican nominee for President, and that you will likely be the next President of the United States of America.

Second, I strongly urge you to make FATCA an election issue. President Obama has been bad for America. I agree that “Obama means not working”. But, if FATCA is the legacy of the Obama Presidency, FATCA is the seed that will destroy the United States.

Governor Romney: I don’t want you to ever be in a position where you must “apologize for America!”

I am an expat American Patriot. But, America is no longer the country that you and I grew up in. I am not leaving the United States of America – The United States of America has left me!

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11 thoughts on “Open letter to Mitt Romney

  1. meusliforbreakfast

    Writing open letters to the presidential candidates is a good idea, but the tone and angle here are completely wrong!

    Why not try this suggestion with Rick Santorum

    Dear Mr Santorum,

    Your grandparents left Italy as young adults and moved to the USA in the hopes to create a better life. They have worked and raised a family in the USA, becoming productive and law abiding citizens just as you are.

    Americans around the world are in a dire situation right now due to a combination of new legislation spurred by FATCA, FBAR reporting, and IRS rules.

    It is a complex situation but let’s take an example to illustrate what it would be like if it happened to you.

    Imagine your grandparents suddenly realized that, for the past 50 years, they should have been filing reports and paying Italian taxes to the Italian government, because, since they were born there, they are still considered Italian nationals until they go through a formal renunciation process?

    What if the Italian tax authorities suddenly came after your parents AND your grand parents (if Italy considers that people born of Italian parents are also Italian until they renounce formally), accusing them of tax fraud for not reporting their American bank accounts to the Italian government? Imagine this – they suddenly learn that since they have not hired an Italian accountant and lawyer to report minute details of their US business to Italy, you are in danger of having your entire family’s life savings confiscated and they are even threatened by criminal charges and a possible jail sentence.

    Imagine further that they had no intention of committing a fraud and you want to make things right. But Italy has provided no way to come into compliance short of exorbitant fines and confiscation of a large chunk if not all of their retirement savings.

    Imagine the anxiety and confusion; they never planned to do anything wrong, nobody ever told them about these obscure Italian reporting requirements, and all of a sudden they are being enforced with bloodthirsty vengeance by Italian tax authorities all over the world. Your parents had been back to Italy for frequent trips and nobody ever mentioned any of these obligations! Then you learn it was indeed written in minuscule letters in transparent blue ink on one of the forms you have to sign at the airport.

    Lets go even further and imagine that US banks, fed up with Italy’s reporting requests, call and say they must close their accounts; they will no longer accept customers who were born in Italy or who’s parents were born in Italy. The tax reporting is just too cumbersome and costly.

    You are on the street with a check in your hand and no way to live in the modern world without a bank account.

    You turn to Italy to find a solution, perhaps, since you are still apparently an Italian taxpaying citizen, they will let you open an account in an Italian bank, in Euros. Of course you earn all your money in dollars and your expenses and retirement planning is in dollars so you will be taking a huge exchange risk if you do this. And you will have to pay 4% to the Italian bank on every single transaction you perform in the USA (let me remind you, USA the country of your residence, work, and citizenship). Oh wait, you can’t open a bank account in Italy either because you don’t have a legal address there.

    Imagine Mr Santorum, what if the Italian population had absolutely no regard for Italians who emigrated to countries like the USA and decided to treat them all as tax frauds and criminals regardless of how long they have been living outside of Italy.

    In all likelihood, most people in this situation would spend the sums of money required to renounce their Italian citizenship without delay. Imagine now that Italy takes offense at this and threatens everyone that, if they renounce, they may no longer set foot back in Italy to visit friends and family there.

    Dear Mr Santorum, this scenario is not a fictional make-believe horror story.

    This is exactly the situation that the United States of America has put its expatriate citizens in. This is the scenario that is facing every single US born person who has emigrated to another country over his lifetime. The combination of FATCA, FBAR reporting, and IRS legislation has resulted in a breath-taking witch hunt that is irreversibly damaging the lives of US citizens abroad, but also the image of the US in the world.

    Thank you for the time you have taken to read these lines and understand our dilemma.

    Reply
  2. jenna

    Dear Mr Romney, please act and help us.
    FATCA, FBAR reporting and the rest of the IRS penalty system aimed at rich tax frauds is wreaking havoc among honest americans abroad.
    Hardworking middle class families abroad are terrified and offered no means of coming into compliance… threatened with confiscation of a large chunk of their net worth, for the crime of simply not filling in some papers required by laws back home. Families are being separated, and people are tragically and heartbroken, flooding into the embassies to renounce the US citizenship they once cherished. Being a US citizen abroad means they are subjected to threats, insults, compliance fees and complications far beyond what any US citizen at home must deal with. They are also being refused banking and insurance services. They have two choices, either return to the states, or if they have built their life elsewhere, renounce their US citizenship (if they are in compliance that is). Others, who just learned of their reporting responsibilities, must either fork over 30% of their net wealth to a country where they don’t even live or work; or else take to hiding as a fugitive.
    Their children are learning that the US is a country to fear and hide from, rather than “the land of the free”.
    Please Mr Romney have an in-depth look at this situation and please help to fix it.

    Reply
    1. renounceuscitizenship

      Jenna:

      Thanks very much for your comment. I absolutely feel and understand your pain – we are all living it. Hope you don’t mind, I posted your comment at the Isaac Brock Society.

      http://isaacbrocksociety.ca/2012/06/12/pain-and-desperation-of-u-s-citizen-living-outside-the-united-states/

      You will find some friends there.

      Thanks again and hang in! At some point this nightmare will end. Obviously you need to get out and vote against Obama who is the clear architect of all of this.

      Reply
  3. swisspinoy

    I’m looking forward to learning if Romney is willing to distinguish himself from Obama on the issue, to provide Americans abroad with representation. So far, as far as I can tell, I don’t seem much of a difference between democrats and republicans on the issue, making a third-party vote much more appealing.

    Reply
    1. renounceuscitizenship

      I have always felt that Romney (of all the candidates) is the one who would be most sympathetic to this. My reasons are:

      1. Both he and his wife’s fathers were born outside the U.S.

      2. I have speculation that Romney may also be a citizen of Mexico.

      3. Romney has a family summer home in Grand Bend Ontario giving him a life long connection to Canada.

      4. Romney clearly has to file FBARs.

      5. Romney is (in truth) an “Independent” who is a pragmatist. Therefore, if given the proper education would see how much citizenship-based taxation hurts the U.S.

      I have always felt that we should attempt to engage Romney. If we give him an education on this it will give him an issue to really attack Obama. I have yet to meet a person who does not see things our way, once it is explained. Furthermore, it will portray Obama as the thug that he is.

      Also, we should reach out to Ron Paul – who very clearly is opposed to the Ex-Patriot Act. I noticed that he used the words “Trojan Horse” to describe some aspects of citizenship-based taxation.

      At the very least, Romney should receive the very strong support of U.S. citizens abroad.

      Reply
  4. Christophe

    So the question is how do we get to him, and not just his campaign staff that is going to send back a letter saying “Thanks, tax reform is one of our priorities and we’ll make sure to work on it”.

    Reply
      1. swisspinoy

        Republicans, like democrats, haven’t done much to show that they think about Americans abroad. Here’s a good article on that: http://www.americablog.com/2012/05/why-both-parties-are-wrong-about-expats.html As it stands right now, I’d rather vote for Ron Paul. Ron Paul is the only politician that I know of who enables Americans abroad to enter their foreign address on his contact page (one can manually type in the foreign state): https://forms.house.gov/paul/webforms/issue_subscribe.html What do you think the chances are that Romney or Obama would do something so small and simple for the benefit of Americans abroad who don’t have an address in the US? Small gestures can make a big difference and both Obama and Romney failed that test.

      2. Shadow Raider

        This might actually work. Mentioning that there are about 4 million US voters abroad might call his staff’s attention, and ACA and other organizations could mobilize Americans abroad to vote for Romney if he promises to fix the situation. He is already proposing territorial taxation for US corporations.

      3. swisspinoy

        If Romney makes it very clear that it is one of his top priorities for Americans abroad to have their own representation in the House and Senate, or for the system to be changed to residency-based taxation, then this would be the way to go.

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