Where it came from – 2009 – Obama describes his justification for what is to become FATCA
Obama Goes After Overseas Tax Cheats AKA U.S. Citizens Abroad – See the following video which was uploaded in May 2009. Obama says taxes are an obligation of “citizenship“. Obama lauds the work of Levin and Rangel (at this point they are the future architects of FATCA). The whole video (where “First Tax Cheat Geithner” introduces Obama) is interesting. Note in particular the video starting at 7:30 where Obama provides his justification for what is to become FATCA.
How it came about – 2010 – The Hire Act (which included FATCA) was enacted.
It is important to note that FATCA was legislation which was unrelated to the principal purpose of the Hire Act. It was “slipped in” at the last minute. It is likely that few legislators knew what they were signing when FATCA was signed into law. FATCA was “Trojan Horse” legislation at its finest. But, FATCA is many other things including:
FATCA is a creator of jobs
FATCA has created new and lucrative work for accountants and lawyers. (An NYU tax professor recently referred to FATCA as “The gift that keeps on giving“.) It has been a boon to the education industry – it will be soon be possible to receive a certification in FATCA compliance.
FATCA is a form of Capital Control
President Kennedy said that the U.S. government has never had to erect a wall to keep our people in. That was then. This is now.
FATCA is an attack on the sovereignty of other nations
FATCA – through Form 8938 – is an attack on U.S. citizens living abroad
This is the primary purpose of this post.
FATCA needs to be understood as legislation which is aimed at foreign financial institutions and U.S. persons with foreign assets. Almost all of the FATCA discussion has been about the effect of FATCA on foreign financial institutions. Form 8938 is the part of FATCA aimed at U.S. persons. It has received very little analysis until now. FATCA mandates form 8938 which allows the U.S. government to impose massive penalties and force people to disclose their assets to the government. Continue reading