“What do the recent G20 discussions and the IRS’ enforcement of foreign asset reporting have in common and why should “dual nationals” be concerned?”
From: Fear Factors: Dual Nationals and the IRS
A recent G20 summit was held in Toronto, Canada. The internet is a great thing – gives you instant access to the newspapers in any part of the world. As a result I was able to read both the local commentary and international commentary. The local (Toronto) newspapers were marveling at the extent and cost of the security offered to these “great leaders”. A friend commented to me that:
“If they were such great leaders, then they wouldn’t need that kind of security.”
That was an astute comment – I felt sorry for the Canadian taxpayers who were bearing the cost of a “photo op” for their government. Furthermore, the violation of the civil liberties (if there are any) of Canadians was enormous.
It occurs to me that there is a lesson in this for the U.S. government. On September 11, 2001 Osama Bin Laden destroyed the United States of America. It is true that he killed 5,000 people (and I not trivializing this). Bin Laden set into motion a chain of events, which resulted in the U.S., taking the initiative to destroy itself. The U.S. destroyed itself financially and the U.S. destroyed itself morally. The country is no longer recognizable.
Financial Destruction of the U.S.
Irresponsible Spending and Debt
The events of September 11, 2011 began a chain of events that involved the U.S. in two wars. All forms of warfare are financially devastating. Obviously the wars have continued during the financial crisis of 2008 and beyond. As it stand now:
The United States is a country that is collapsing under the weight of its debt.
The United States needs investment from any source. It needs other countries to buy its debt. It does NOT need policies that will discourage people from entering the U.S. financial markets. It does not need policies which will isolate and anger the six million American Citizens, who are in effect American Ambassadors, who live outside the United States.
Three Examples of Policies and Laws That The U.S. Would Be Advised To Change
1. Ridiculous and Mindless Corporate Tax Policies
U.S. corporations have the highest corporate tax rates in the world. The United States needs to lower corporate tax rates so that companies do not have incentives to earn their money outside the United States. To put it simply: The United States must compete on the level of tax rates. Why would any person or company stay in a place where the taxes are not competitive. It’s time to lower them.
2. Stop Taxing On The Basis of Citizenship
The United States is one of two terrorist nations that tax people on the basis of citizenship. The answer is to stop taxing U.S. citizens living abroad. Because of differences between U.S. tax laws and the laws of countries where U.S. citizens reside, financial planning and living for U.S. citizens is almost impossible.
3. Stop The Legion of Reporting Requirements – They Serve No Purpose
Stop burdening U.S. citizens with ridiculous reporting requirements. Does anybody really imagine that an FBAR prevents terrorism? There is no demonstrated connection between the foreign bank accounts used by U.S. citizens living abroad and crime. There is no reason for an FBAR – other than as a mechanism for the IRS to raise revenue. Stop behaving toward U.S. expats in a manner that forces them to renounce their citizenship.
Moral – Inward Destruction
The two words “Patriot Act” and all the things associated with them, have moved the U.S. away from a respect for individual liberties. President Bush began a process, which has been accelerated under President Obama of, repudiating the values of freedom and democracy, for which the United States once stood.
Moral – Isolationism
The U.S. has begun to treat anything “foreign” as dangerous and suspect. There has been discussion of building a wall along the U.S. Mexico border. (As Ron Paul as noted, walls can also be used to keep people in.) People coming into the country are presumed to be terrorists. The IRS has waged war on legal immigrants if they retain bank accounts in their country of origin. The U.S. is now in the process of trying to create a “border agreement” with Canada which assumes that Vancouver and Halifax are potential ports of terrorism. In a recent article analyzing the proposed border agreement, titled: “On The Border With A Frightened Giant“, Ronald Crelinsten, a senior research associate at the Centre for Global Studies, University of Victoria, comments that:
“One of the pilot programs in the action plan is to integrate some border law-enforcement teams and improve cross-border communication between agencies. U.S. agents operating on Canadian territory would presumably have to follow Canadian law, including the Charter of Rights and Freedoms.
Canadian agents operating on U.S. territory would have to follow U.S. law, including the Patriot Act. Harmonizing such different approaches to law enforcement will inevitably create tensions. Sharing information between Canadian and U.S. law enforcement agencies was what led to Maher Arar’s unscheduled trip to Syria.
Sweden experienced firsthand the dangers of allowing American agents to operate on its soil. In December 2001, the Swedish government decided to deport two Egyptian refugee claimants whose applications for asylum had been refused. The Swedish Security Police accepted a U.S. offer to supply the plane to execute the deportation. When the Swedish officials handed over the deportees, after having searched them according to Swedish procedure, the Americans proceeded to cut off the two men’s clothes, dress them in jump suits and hoods, medicate them and bundle them on board. They were transported to Egypt, where they were allegedly subjected to torture.”
Speaking of an arrogant and damaging attitude toward other countries:
Moral – Attitude Toward Other Countries
The U.S. media, people and government seem to believe that the rest of the world is like the United States and an extension of it. The United States, one of the least democratic of the so called democracies, presumes that the rest of the world wants democracy (whatever that is). In actual fact, they want freedom, not necessarily democracy. There is no necessary connection between freedom and democracy. (The U.S. in 2011 has neither.)
Moral – The U.S. Foreign Policy Is Completely Defensive
One is either growing or one is dying.
No person can grow with an attitude toward life that is completely defensive.
No company can survive with a corporate policy that focuses ONLY on protecting its market share.
No country can survive with a foreign policy that focuses only on protection of its borders.
From a U.S. perspective, the number one goal is that the border must be sealed. It must keep people out. Everybody is a terrorist. Anybody with a foreign bank account is a criminal. Everybody wishes to do harm to the U.S. Although, this attitude is based on facts that are false and ridiculous, the truth is that the U.S. is now in a position where it has virtually no friends. Although other people and countries may not wish the U.S. harm, they do not wish it well either. Why is? Well, largely because the U.S. is not a country that wants to participate in the world. It is a country that wishes to impose its will on the world.
The United States has the gall and temerity to attempt to impose FATCA on the rest of the world. I guarantee, that the implementation of FATCA will turn out badly for the U.S. It will:
– Encourage people to avoid the U.S. and its capital markets
– Ensure that the U.S. dollar ceases to be the world’s reserve currency
If the U.S. really wants to defend itself and impose “Americanism” on the rest of the world, then it must (and I said must) go out and make some friends. What might this mean? What advice would you give an individual who had no friends? You might suggest:
– Respecting other people
– Listening to other people
– Working with (not against) other people
– Helping other people without an expectation of a payback
– Recognizing that people have the right to their own views
– Recognizing that people have the right to organize their families as they see fit
Well, the United States needs to embark on a foreign policy that does all of these things. If the United States reaches out to the world, it might make some friends. This will help on the issue of defense:
First, there will be fewer people who don’t like you;
Second, there will be governments that might be willing to help you.
If the United States starts behaving itself, it will not have to pay as much for “Homeland Security”. This is clear to all of the world (except of course the United States).
It should start by repealing FATCA and apologizing for it!
If the leader of the G20 countries were such great leaders, they wouldn’t need the kind of security they had.
If the United States were a better friend and vehicle for good in the world, it wouldn’t have to pay as much for defense either.
Hilary Clinton take note.