So You Think You'll Just Up And Leave, Eh? in [Market-Ticker]

Posted 2012-11-24 13:02
by Karl Denninger
in Federal Government

So You Think You'll Just Up And Leave, Eh?

FATCA—the Foreign Account Tax Compliance Act—generally takes effect in 2013 and the IRS will start penalizing foreign banks in 2014 for failing to comply. The law was enacted in 2010 but remains in the ramp-up phase. Yet foreign banks and governments are on board and more of the law is being applied right now. See 5 nations joining U.S. in tax evasion crackdown.
Institutional Reporting. FATCA requires foreign banks to report U.S. account holders to the IRS. After identifying them, institutions must impose a 30% tax on payments or transfers to any who refuse to step up. Foreign financial institutions (FFIs) must file IRS reports by September 30, 2014.

Oh really?

Foreign financial institutions must do something?

And what if they don't?

This is an amusing law, really. The United States has no means of compulsion to enforce an order (other than by deciding to engage in armed invasion, obviously) across a national boundary. So exactly who has the right of complaint here?

Let's look at the facts shall we? Foreign nations are no more "freedom havens" than is the United States. These financial institutions in allegedly-sovereign lands are voluntarily complying with the IRS and its US-centric and US-limited laws, since the IRS cannot compel performance across a national boundary.

If you think otherwise then talk with me about the kid who is abducted by his or her parent that flees to another nation. Oh sure, there's an alleged treaty on that. But if you think the nations that stick up their middle finger are limited to those such as Saudi Arabia (which does, by the way), you'd be wrong. In point of fact Germany, one of our alleged "best friends", is one of the worst offenders in this regard!

Their argument? "The kid will have a better life here -- so screw you."

Yep.

So let's cut the crap, shall we? Freedom isn't free and there is no solace to be found in trying to run away from the jackboot of government. The fact of the matter is that it has long been the law that you had to report foreign investment and property holdings and it has been illegal to transport more than $10,000 in negotiable anything in or out of the US without declaring it for quite some time. The US Government holds that it has the right to tax income no matter where earned and held if you are a US Citizen, but it lacks the ability to enforce that law without the voluntary cooperation of other nations and their institutions.

It's all fine and well to argue against FATCA, but that misses the point. The real question is much simpler: What leads you to believe that you will find freedom -- whether financial or otherwise -- in a nation and/or institution that voluntarily disrespects your financial privacy?

Perhaps -- just perhaps -- this will wake you up to the fact that trying to run is a futile gesture, and that so-called "more-free" foreign lands really aren't.

And that, perhaps -- just perhaps -- might lead you to the conclusion that the only real options for change, assuming self-delusion isn't part of your agenda, are to put your effort toward making that change stick here instead of running away.

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User Info	So You Think You'll Just Up And Leave, Eh? in forum [Market-Ticker]
Azusgm Posts: 2623 Incept: 2010-12-02 East Texas	Quote: And that, perhaps -- just perhaps -- might lead you to the conclusion that the only real options for change, assuming self-delusion isn't part of your agenda, are to put your effort toward making that change stick here instead of running away. BINGO!!! 2012-11-24 13:12:51 Permalink
Workerbee Posts: 1409 Incept: 2009-03-18 * Winter is Coming *	Point well made, Sir! ---------- Prepare for Our Valley Forge ~ Appeal to Heaven ~ ...that those "who having no appeal on earth to right them, they are left to the only remedy in such cases, an appeal to heaven." ~John Locke 2012-11-24 13:13:21 From PDA Permalink
Degaston Posts: 2264 Incept: 2007-07-27	Its best IMO to stay here and fight for our rights. However I'm really scared that the GOP-controlled House is going to cave and allow the federal debt ceiling to climb up big steps. One of the most important things they need to do NOW is put some limit (such as 99 billion dollars) on how much the debt ceiling can be raised at a time. That way the politicians will be forced to regularly be reminded of the need to balance the books. ---------- 3/17/2013: Bullish on nothing - 100 percent in cash. 2012-11-24 13:15:10 Permalink
Frat Posts: 1939 Incept: 2009-07-15 NKY	To your point Gen, what's the "I" in IRS stand for again? ---------- We're ***ed. Where's Henry Bowman when you need him? 2012-11-24 13:17:28 Permalink*
Cvdoc Posts: 174 Incept: 2009-06-11 Washington, DC	We are in a gulag of our own making. Running away solves nothing. Time to stand and make a stand in small ways in our lives. ---------- Few men desire liberty; most men wish only for a just master. Sallust 2012-11-24 13:27:59 Permalink
Wis/min Posts: 5393 Incept: 2009-08-14 On the border	I am not convinced there is anything that will "force" a politician to deal with the mess we are in short of enough people willing to throw the bum out. Based on the last election cycle, support for fixing anything seems remote. 2012-11-24 13:30:36 Permalink
Drb Posts: 195 Incept: 2011-01-02 TX	Degaston - the GOP-controlled House WILL cave, just as they did every time in the past, and just as they did when GOP had Presidency, House, and Senate. 2012-11-24 13:55:37 Permalink
Jstanley01 Posts: 8282 Incept: 2008-07-30 San Antonio, Texas	The statute isn't so much about the money that the U.S. Treasury will be able to exact from expatriates as it is about setting up the financial infrastructure necessary for a World Government. The Psalmist sang, "If I ascend up into heaven, thou art there: if I make my bed in hell, behold, thou art there." So it should be no surprise to anyone with any kind of half-assed biblical education that Minions of the Government, having taken upon themselves the role of God, cannot tolerate any soul finding any kind of existence or livelihood beyond their Divine Reach. And where better to begin than with the citizens of the United States? Which is exactly what the Robert's decision on Obamacare was all about also. Duh. No meaningful change is gonna stick in America until the Holy Priesthood of Governmental Megalomaniacs at Babylon on the Potomac are, one way or another, permanently pried away from the grip that they have on the levers of power. But that can only happen if and when the American people quit believing in their idols. ---------- You can't cheat an honest man. ~P.T. Barnum 2012-11-24 13:59:13 Permalink
Standby Posts: 1052 Incept: 2009-08-06	Front and center, they gotta be in your face all the time. 2012-11-24 14:49:18 Permalink
Marcustullius Posts: 224 Incept: 2010-06-12	Frat, perhaps some of the minions think it stands for "International"? Tully ---------- "It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." (Samuel Adams) 2012-11-24 14:55:06 Permalink
Fraudster Posts: 4181 Incept: 2011-05-10	The alternative is to pay the exit tax and tear up your passport and renounce at a US embassy. Increasing numbers of people are doing this and moving on to subsequent personal freedom. ---------- *"Let China sleep, for when she wakes, she will shake the world."* - Napoleon Bonaparte *"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]."* - Foundation & Empire by Isaac Asimov 2012-11-24 14:55:16 Permalink
Genesis Posts: 131489 Incept: 2007-06-26	Really, you think this achieves personal freedom? First, you need to find another nation where you can obtain citizenship first. Second, once you do it you had better be right that you obtain "more freedom", because you can't change your mind. May I politely ask how you can possibly judge that the "new place" will provide "more freedom" when in fact the very institutions in that new place have already demonstrated their disrespect for same? ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-11-24 14:59:38 Permalink
Movedtonz Posts: 959 Incept: 2008-03-09 Hawkes Bay Online	Some good points made. Still, we are comfortable with our decision (and the rationale for our decision) to move on to greener pastures. To no small degree, the laws of a democratic country are a reflection on the ethos of the populace. ---------- Americans need to stop claiming stupidity to get out of responsibility. -Tsk 2012-11-24 15:08:26 Permalink
Clintb350 Posts: 1521 Incept: 2008-01-19 Southern AZ	Moved - Do you remain eligible to collect Social Security? Just curious, I assume if you renounce citizenship you aren't... 2012-11-24 15:11:09 Permalink
Otiswild Posts: 5677 Incept: 2009-03-09 Inside you, the force is!	So here's a question.. Are there any locally owned and operated non-US banks that are happy to have American depositors, and that will just thumb their noses at the IRS? It seems to me that the banks that will comply with the IRS and US law are those that are multinational in character. Where are the European credit union equivalents? 2012-11-24 15:11:21 Permalink
Imustbenutz Posts: 283 Incept: 2010-11-04 Absurdistan, USSA	If you consider that foreign banks not in compliance may be shut off from the FED's discount window then "voluntary" compliance is not so "voluntary" is it? The rest of this may be strictly tin foil hat, but here it is for what it is worth (from Greg Prescott, M.S.): 1. The IRS is not a U.S. Government Agency. It is an Agency of the IMF. (Diversified Metal Products v. IRS et al. CV-93-405E-EJE U.S.D.C.D.I., Public Law 94-564, Senate Report 94-1148 pg. 5967, Reorganization Plan No. 26, Public Law 102-391.) 2. The IMF is an Agency of the UN. (Blacks Law Dictionary 6th Ed. Pg. 816) 3. The U.S. Has not had a Treasury since 1921. (41 Stat. Ch.214 pg. 654) 4. The U.S. Treasury is now the IMF. (Presidential Documents Volume 29-No.4 pg. 113, 22 U.S.C. 285-288) 2012-11-24 15:21:37 Permalink
Fraudster Posts: 4181 Incept: 2011-05-10	Quote: First, you need to find another nation where you can obtain citizenship first. Dual citizenship would make this an easy prospect. Quote: Second, once you do it you had better be right that you obtain "more freedom", because you can't change your mind. If one is a dual citizen, then one should have some familiarity with said country. If one is comfortable with the relative merits of the country in question, renunciation may achieve the desired end. Quote: May I politely ask how you can possibly judge that the "new place" will provide "more freedom" when in fact the very institutions in that new place have already demonstrated their disrespect for same? The United States is still the 1000lb gorilla in the room. I don't think that is going to last forever (I.e. long term, and maybe medium term), but that is the current setup. So yes, the United States gets others to play by its rules, but it is a coercive power and it won't be lasting for too much longer. ---------- *"Let China sleep, for when she wakes, she will shake the world."* - Napoleon Bonaparte *"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]."* - Foundation & Empire by Isaac Asimov 2012-11-24 15:21:40 Permalink
Fraudster Posts: 4181 Incept: 2011-05-10	BTW, you are right though Karl, the United States does tax foreign income of citizens. It and Japan are the only countries that do this. You want to talk about personal freedom? Being a citizen of anywhere else permits you to live abroad and not be taxed. So being a citizen of any EU country would be advantageous IMO. You avoid being taxed by your home country if you live abroad, and you may have less restrictive financial rules. Sure the rules can change, but we have to deal with the current paradigm as it exists. ---------- *"Let China sleep, for when she wakes, she will shake the world."* - Napoleon Bonaparte *"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]."* - Foundation & Empire by Isaac Asimov 2012-11-24 15:25:36 Permalink
Mannfm11 Posts: 3620 Incept: 2009-02-28 DFW, Tx	Imustbenutz, I have seen the same type laws, that the IMF is really nothing more than a collection agency for the IMF. The Secretary of Treasury is its chief governor (serve 2 masters?). Another thing I have been told is the hazard of calling yourself a US citizen. Is that really necessary to be a typical American? ---------- The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith 2012-11-24 15:46:55 Permalink
Bertdilbert Posts: 2695 Incept: 2008-12-22 CA	We really did not try very hard. ---------- Dear Euroland: Relax, Germany has a plan for your money! Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro. 2012-11-24 15:48:47 Permalink
Duc888 Posts: 7368 Incept: 2008-11-06 CT, the UNconstitution State	Quote: So here's a question.. Are there any locally owned and operated non-US banks that are happy to have American depositors, and that will just thumb their noses at the IRS? It seems to me that the banks that will comply with the IRS and US law are those that are multinational in character. Where are the European credit union equivalents? The IRS is the enforcement arm in the US of the INTERNATIONAL banksters. Just follow the food chain up the line. ---------- ...burp 2012-11-24 16:32:24 Permalink
Movedtonz Posts: 959 Incept: 2008-03-09 Hawkes Bay Online	Quote: Moved - Do you remain eligible to collect Social Security? Just curious, I assume if you renounce citizenship you aren't... Not planning to renounce citizenship, so hadn't looked at this. The results of a quick web search shows that one does not have to be a citizen to receive SS, one just had to have paid into SS (there are a bit more rules, but it appears that paying into the system is paramount, citizenship isn't). We did our budgeting assuming that we will get zero pension, and zero SS. The addition of either one will be nice. I suspect that we are more likely to see $ from pensions than from SS. ---------- Americans need to stop claiming stupidity to get out of responsibility. -Tsk 2012-11-24 16:53:57 Permalink
Sandor Posts: 1944 Incept: 2007-08-08 Deltaville,Virginia	Quote: And that, perhaps -- just perhaps -- might lead you to the conclusion that the only real options for change, assuming self-delusion isn't part of your agenda, are to put your effort toward making that change stick here instead of running away Change? Over half the population is FSA, SS recipients or government workers. The Rubicon has been crossed. If you want to stay, and I am, you need to figure out a way to hang on until it all implodes. "Fixing" this **** is impossible at this point. You will never get the votes. If your "Middle class" in private industry, your balls will be flattened. 2012-11-24 17:18:26 Permalink
Flyanddive Posts: 606 Incept: 2008-10-10 Detroit	If there is no incentive to go to work in private industry, is the government's plan simply to take over everything? ---------- "I've seen people go into real poverty trying to pretend to be rich." 2012-11-24 17:22:41 Permalink

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