Audio recording: http://tinyurl.com/6gb5rkq

FATCA is the acronym for a new law passed by the United States Congress, which in effect, extends American tax law beyond the borders of the United States, and requires foreign banking and financial institutions to comply with it. This legislation has set off alarm bells and anger around the world. Those opposed to it include governments, and banking and financial institutions, which see the law as American economic imperialism.

FATCA also has a very serious impact on the millions of American citizens living abroad, who could be forced into paying double taxes, and could even be criminalized by the law.

The Geneva-based organization "American Citizens Abroad" is spearheading a war against FATCA, and is calling for its repeal.

Bob Zanotti spoke with four of ACA's key people for a special roundtable
discussion on this issue.

Photos of the Participants:

http://www.aca.ch/joomla/index.php?o...93&Itemid=10\4

also see: http://www.americansabroad.org

Also see: http://www.aca.ch

The land of the free

While I'm strongly against FATCA, I don't see how it could cause double taxation. American tax law already does that - FATCA just makes it easier for them to catch you.

The queue at the US embassy of good citizens handing in their blue booklets will only get longer!

Not till getting the red one gets easier.

Not as long as the line of people here bitching about America but never giving up their citizenship.

Another war to lose. You know, Americans would win more if they used the word "war" only when it really was one.

Only in Berne.

Go to one of the neighbors, much shorter!

Tom

How exactly is one double taxed?

maybe they'll scrap the foreign earnings exclusion. it's not double taxation, but if you're taxed in the US, it might be about double the swiss tax rates.

still, it would be good for non-US people in switzerland, since we would have a major post-tax cost advantage over you guys - so there is a silver lining. now, who do i lobby...

A personal hero of mine, Herr Konrad Hummler managing partner of the Switzerlands oldest Private Bank Wegelin & Co. stated it clearly in 2009: The United States overestimates its attractiveness as a financial center.

Hummler speaks from a position of authority, not just because he runs Switzerlands oldest private bank, but because he stands for what Banking is meant to be. Back before Wall St became listed on the NYSE, Partners in Wall St. firms were liable if the firms they ran blew up. Hummler as managing partner of Wegelin & Co appears to be a one man crusade appearing to tell it like it really is and if he gets it wrong, or if he makes a big mistake, it's not just Wegelin & Co that gets hit, so does he.

So, when Wegelin told its clients: Don't invest in US securities, don't buy US dollars and don't get involved in the US, he says this because he knows that this empire is desperate for cash and will do anything and stamp on anyone to get funding.

So why am I so against FATCA and investing in the USA?

It's not the people, on the whole, Americans are friendly if somewhat fun to be around, but it's the institutions that create the outcomes that I worry about the most. And although I am not a big Hayek fan, he was right when he said: the outcomes of the system are dependent on the nature of the institutions (paraphrased) and that there is a difference between organic law and synthetic one size fits all legislation.

The United States is a place NOT to invest at the moment and unfortunately, with pieces of legislation, it uses Foreign Financial Institutions in order to try and catch American citizens out on taxes. Making an Australian, Swiss, Singaporean bank into potential tax collectors for the US government, regardless of how small or how unimportant US business is to the bank

Why are American citizens and FFI's being targeted by the US government?

There are a number of reasons why this is the case. The most glaring ones are already publicly known:

The state of American politics, which is divisive and naturally conflicting
The broken budget which requires probably 20 years of debt reduction to get under control (which personally I think is impossible)
The fact that the Federal Reserve feels it is quite ok to continue to print money even though the way to fix a debt crisis is not to create new debt
The real need for the US to continue to receive investment from offshore in order to continue funding their spending binge
The fact that the American Government and the institutions appear quite happy for the American taxpayers and investors to be targetted to colect tax revenue and utilize their position to coerce Foreign Financial Institutions into performing the dirty task that the IRS should be doing

Why does FATCA deserve attention? Deloitte says itself:

"The Legislative intent of FATCA is to ensure there is no gap in the ability of the US government to determine the ownership of US assets in foreign accounts. As such, this revenue raising provision, which was originally enacted as a part of the Hiring Incentives to Restore Employment (HIRE) Act is expected to significantly impact the systems control framework and procedures to comply with the introduction of the act in January 2013."

Effectively, Deloitte puts it nicely that: The Americans, who are starving of Tax Revenue require all Foreign Financial Institutions (and therefore any subsidiary of any large institution) to report to the Internal Revenue Service the value and type of American assets held on their books, ostensibly so they can tax American citizens.

In the case of Swiss Bank UBS, which has promised to operate US accounts only from special locations - effectively the impact should be minimal.

For other banks that didn't go through the whole process of identifying their US clients, this means that any institution where Americans are trying to hide their savings from the IRS will eventually have to report the assets to the IRS. The worry here is with other banks that have American clients on their books who haven't yet declared their foreign assets to the IRS.

What does this mean for Americans? Well, it means Americans will now be reported to their Government for any assets that they hold outside of the US and will be taxed upon them. As if 0% interest rates and a Fed Reserve doing Quantitative Easing isn't enough to stop people from saving in the US now there's little incentive to do it abroad.

What does it mean for Foreign Financial Institutions: well, the experts cannot really tell you. What this BankSters assessment is follows:

FFI's will have to trawl through their client base to find Americans
FFI's will have to confirm that the Americans on their books hold Assets with them
The Americans will get a letter from the firm stating: "Dear Sir/Madam, we notice you have $50,000 in an account, as you may be aware, amounts over $20,000 need to be declared to the IRS. We hope you have declared these assets, because if you have not, we are obliged to report them to the IRS
FFI's will make it even harder for Americans to open accounts in the location they are operating meaning people who are working overseas, studying overseas or generally just want to check out of the workers paradise known as the USA for a few years now find it extremely difficult to do simple things like get paid
FFI's will tell the US government what you have and where you have it.

Sounds like a great idea for a country that is the largest debtor and is a safe haven. Not only do you have the pressure of the FED and the Bernank deflating the value of your US dollars, but any asset that you have in a foreign bank is also going to be reported to your Government - and the compliance regime is so difficult that most banks will say "Sorry American, it's just too hard, we won't take your money".

Expatriates from other countries only pay taxes to the foreign government they live in, but not their home country which doesn't see income earned by non-resident citizens abroad as taxable. But the United States considers income earned by expatriates abroad taxable, so American expats pay two taxes on the same income.

Ed, unfortunately I think the only way that we, as individual expats, can fight this is to turn in the blue passport.

True to an extent, Americans don't pay two taxes, they pay taxes twice....

There is an exclusion threshold of ~$91,300 where if you make less than that you won't pay taxes though.

http://www.irs.gov/pub/irs-pdf/f2555.pdf

Around 80k CHF, which isn't terribly far above median income in Switzerland. Gee, thanks uncle Sam.

Go to Frankfurt. They will not accept renunciations at the Milan embassy. The US Embassy in Bern will give you a list of the embassies that preform the service.

Exactly! They are applying US wage standards to Swiss salaries but we have a totally different cost of living. That coupled with a dollar that is worth half of what is was in 2001 and you begin to see the problem. In 2001 $90,000 was 160,000 CHF. Today it is 81,000 CHF. The IRS makes no allowance for this change.

And we are in record numbers!

"Bitching" about "taxation without representation" is something America was founded on.

Yes it was and recently a jury of US citizens upheld it as just at a mock debate, go figure..........

http://www.bbc.co.uk/news/magazine-15345511