The above tweet references one of the best articles I have seen on the interaction between international law, FATCA, citizenship-based taxation and intelligent public policy.
The article concludes with:
Rethinking US international tax laws.
I am not an international law expert, but I would strongly argue for a delay to FATCA and the opening of serious discussions at the OECD to figure out an acceptable way to ensure equity between countries. Why would the US be the only tax authorities to benefit from information provided foreign tax authorities?
I would not dare to even suggest how this could be achieved. In the meantime the movement to repeal FATCA is growing. Should all countries decide that their citizens will be taxed on a worldwide basis, as the United States does, working abroad will become increasingly onerous and create absolute confusion? The core of this debate is only emerging: Either the system is based on territoriality, or it is based on nationality. Having it both ways won’t work.
The United States has to ask itself the question of whether its actions are legitimate and question its objectives and the ways it goes about achieving them. This is especially pertinent at a time when the United States seems to reserve a right to eavesdrop upon foreign nationals.
Is US foreign policy using all its weaponry, including the FCPA and FATCA to impose a Lex Americana (i.e., American law regime) upon the rest of the world? Shouldn’t the US first look more closely at its own taxation system and corruption? International tax law is in urgent need of modernization with a focus on equity and fairness rather than threat and blackmail.
Could the IRS have been an apprentice sorcerer? Might it have opened the Pandora box? The next few months will certainly provide further interesting developments. But it is questionable, to say the least, to see Uncle Sam recruiting for free tax informants around the world. Is it the price for the Pax Americana?