Sunday, May 22, 2011

Quote of the week

From Rebecca Wilkins of Citizens for Tax Justice:
“They are using arguments like ‘competitiveness’ and ‘regulatory burden.’ What they are really afraid of is they are going to lose their tax-evading customers."
This is from a story in The Hill about the lobbying efforts surrounding the U.S. Foreign Account Tax Compliance Act (FATCA), which aims to crack down on U.S. tax cheats, and which will come into force in 2013.

There is something rather unsavoury about a process whereby the U.S. puts in place measures to crack down on widespread (criminal) tax evasion, then finding that the Australian Bankers' Association; Barclays Capital of the UK; Private Client Investment Managers & Stockbrokers of London; the Investment Funds Institute of Canada; and various other foreign bodies taking an "aggressive" stance in lobbying to influence the law.

We have blogged about FATCA often (and see our memorandum on it); it's a form of one-way automatic information exchange which appears to have some real teeth.

Wilkins' full testimony to Treasury and IRS officials is here, along with a little CTJ context, entitled "America Should Not Be a Tax Haven."


Anonymous Anonymous said...

The point you consistently miss is that all of the gains of FATCA flow to the US government, but all of the costs are borne by non-US banks.

With FATCA non-US banks are being forced into acting as de-facto US tax collectors, and non-US investors will be paying the extra costs for US tax collection activities. FATCA is simply extra-territorial imperialist US legislation.

Also worth noting is that the costs of complying with FATCA will exceed the amount raised. How can a tax law be considered good when its compliance cost exceeds its revenue?

1:29 am  

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