Friday, June 07, 2013

Defenders of financial secrecy line up to stop U.S. Fatca project

The U.S. Foreign Account Tax Compliance Act (FATCA) is potentially the most powerful tool ever devised to stem cross-border tax evasion and to crack down on tax haven secrecy. Initially a U.S. initiative, it is now in the process of being adapted and multilateralised.

Now, of course, the Center for Freedom and Prosperity (CF&P) and a group of other ethically-challenged bodies in the United States, have decided that financial secrecy (subtext: for rich people only) and tax havens are very good things, and that Fatca needs to be repealed. They have put together a coalition called Repeal Fatca, which urges support for legislation introduced by libertarian Senator Rand Paul to repeal the majority of FATCA, leaving it an empty shell, and leaving the world once again wide open to abuse.

The CF&P has some odd bedfellows in this group. One is an organisation called the Center for Financial Privacy and Human Rights (an oxymoron, as this document explains) and the group also includes the highly influential Washington lobbyist Grover Norquist, who once declared that his goal was to shrink government "down to the size where we can drown it in a bathtub."

For some very brief high entertainment on Norquist, spend two or three minutes watching this; for an explosion of the nonsense arguments put forwards by the Center for Freedom and Prosperity, read Treasure Islands, or this blog.

The arguments of these people are simple to demolish: like shooting fish in a barrel. But that doesn't make them any less influential or dangerous.  When the OECD made a timid effort in the late 1990s to tackle some of the worst abuses being perpetrated out of tax havens, it was a coalition just like this one, led by the CF&P, which killed it. Read more about that here.

Hat tip: Clark Gascoigne


Anonymous Sally said...

You know who else doesn't like FATCA? Americans living abroad who can't have a bank account because the banks where they live don't want to bother with the ridiculous red tape involved in having American customers under FATCA.

FATCA won't catch millionaires intentionally evading taxes. They will find a way.

But its hell for the rest of us. It is a very stupid law.

It leaves us no choice but to renounce our US citizenship.

1:02 am  

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