The language we use shapes our perceptions and others perceptions of us. Though words can be paltry things that don't come close to doing justice to our experience, we still try to find just the right word or phrase to encapsulate it.
It's a two-way street, however. We can come up with any word we like but for there to be shared understanding the sender and the receiver must more or less agree on the meaning. Needless to say where there is disagreement, there is frustration. Worse, when a word that is loaded with meaning and judgement in one context is applied to denigrate people in another, the entire frame of a debate takes a sinister turn.
Take the word "tax evader,' for example. This word which is thrown around promiscuously in this time of fiscal crisis, implies so much - the evil rich expatriates evading their responsibilities while living the good life in Rio de Janeiro or Los Angeles as their countrymen sit at home and suffer the erosion of social services and high unemployment rates. No word exists however for the retired Canadian/American on a fixed income or the stay-at-home American mother in Germany or the former U.S. military man or woman running a small business in Asia or the au pair in France earning minimum wage or the IT worker in India or the immigrant in the U.S. with bank accounts in the home country who did not report their foreign bank accounts, file returns or pay their taxes in the U.S. because they didn't know they had to (and, frankly, when they do get clued in they find it pretty idiotic).
None of these people would agree to being called "tax evaders" and yet that is the language that is used by lawmakers, government officials and the media to describe them. This and other negative terms shape the public debate and lead to a "one size fits all" approach to initiatives and laws designed to combat tax evasion. In a world where catchy headlines, one-liners and sound bites rule, lengthy explanations of complex (and yet very common) circumstances gain little or no attention. Homelanders say "tax evader" and the bewildered expatriate replies, "Look, I pay taxes in the country where I've been living and working for the past ten years..." and that's usually enough for the former to turn deaf. We need better terminology - a word that sums up the situation in a way that is pithy, clear and would make a great sound bite.
Because that term "tax evader" in this context simply will not do. It implies nefarious motives where none exist. Applied to expatriates, it implies that the main reason that someone went abroad in the first place was to escape one's responsibilities to the homeland. But behind every headline that excoriates the latest artist, sports star, CEO and entrepreneur to leave the country are hundreds of thousands of regular people who leave to get married, to raise children, to retire, to take a good job or start a business. Human beings doing very human things. The only difference is that they are not doing these things in the country where they were born or raised. But that is not the perception of the people they left behind.
Emigrants, unless they are showering the home country with desperately needed remittances, are pretty universally objects of suspicion (and sometimes they are outright loathed) and that is true from the developed world to the developing one. If home is where the heart is then how could these people literally rip out their hearts, leave the land of their birth and their childhood friends and families, for economic gain? And if the rational for leaving is love, well, isn't there something slightly suspect about someone who runs off to a foreign country to sleep with some damned foreigner?
That is all too often the view of the home country population but the funny things about emigrants is that they become immigrants as soon as they hit that distant shore. If they are well-educated and are bringing money and talent into the country, they are generally welcome. In the raucous debate over immigration reform in the U.S. a clear distinction is made between those who are considered "undesirable" and those the U.S. desperately wants and needs - the entrepreneurs and those with STEM degrees (science, technology, engineering and mathematics).
In the discussion it seems not to have occurred to the American public or its lawmakers that the people they are trying to attract are the product of other countries' investments in producing a well-educated populace. Is there not an argument here that these countries deserve some compensation from the U.S. for providing it with skilled workers who will be producing for the American economy and thus eroding other countries' tax bases? Another issue is that these people are pulling money out of other countries to park it in low tax states like Delaware. If US politicians were really serious about their lofty goal to combat tax evasion, why not make it a requirement that USCIS officials check with these immigrants' home countries first to determine if these folks are trying to cash in on beneficial tax rates in the U.S. (the very thing they suspect those traitorous American emigrants of doing in other countries) and if they actually paid their local taxes before making that wire transfer.
To put it another way, an "immigrant investor" might just be another country's "tax evader." One has to wonder if the U.S. or any other country would turn the money down if it turned out to be from somebody else's perceived "exil fiscal." Somehow I doubt this will ever happen. :-)
To be very clear I am not proposing that these things be done - just trying to give another take on it. What I would like to see is an acknowledgement on everyone's part that we live in a globalized world where people and capital circulate and that this is a Good Thing. Making draconian "one size fits all" rules to tackle the worst abuses of capital flight and tax competition while not evaluating the impact on human beings is cruel, unjust and ultimately counterproductive. 120,000 registered French citizens in the U.S. and 100,000 U.S. citizens in France. Is there really anything wrong with this picture? And the name-calling and distorted perceptions are just plain dumb and the efforts to shame people into coming "home" or implying that they all left to avoid paying their "fair share" are utterly ridiculous.
In my ideal world everyone would have the opportunity to take his or her talents and try his luck in whatever country will have him or her. Some will be sojourners (temporary residents) and some will be settlers (permanent residents). And in my perfect world the laws and tax regimes of all countries would be "labor export neutral" which would mean that no worker would ever be worse off from a tax standpoint if he or she chose to live and work outside his home country. I'm not just talking about double taxation, I am also referring to onerous filing and reporting requirements too.
Two battles to be fought here. The first is about perceptions and terminology. We need to change the language we use when we talk about emigration so that it is less judgmental. "Emigrant" or "Expatriate" should not be a synonym for "tax evader" and the act of leaving one's country should never ever subject a person to a world where he is guilty in the eyes of his compatriots until proven innocent. Some of this, I think, will happen naturally as more and more people (yes, even Americans) take advantage of all the opportunities unfolding in an increasingly globalized world. Emigration starts to look very different to homelanders when it is their uncle, aunt, cousin, son, daughter, grandson or granddaughter flying off to take that job halfway across the world.
The second battle is one for the rights of the mobile worker. All laws to combat tax evasion, all exit taxes, all diaspora tax proposals existing and proposed should be evaluated against one standard: Do they make it harder for working people to live and reside wherever they are welcome? If they do then we all have an interest in fighting them tooth and nail.
High time to reframe the debate over "mondialisation" because if globalization is to work for people, then people need to be at the top of the agenda and not just an afterthought.
Professor Allison Christians of the McGill University Faculty of Law very kindly linked to this post and added her comments on her blog, Tax, Society and Culture. Very interesting read and I very much like her suggestion that the impact of fiscal controls (existing and proposed) on global mobility in general and outbound labor in particular is a very rich area for further research.
Tuesday, April 2, 2013
Thursday, March 28, 2013
Opération jardin
"Our bodies are our gardens, to the which our wills are gardeners: so that if we will plant
nettles, or sow lettuce […] either to have it sterile with idleness, or manured with industry, why,
the power and corrigible authority of this lies in our wills. "
William Shakespeare, Othello
I love my little house. It's not much size-wise (55 square meters/592 square feet) but over the years I've come to prefer small living spaces. Less to clean and who in the heck needs more than one bathroom anyway unless you have a famille nombreuse (large family). We stopped at two Frenchlings so we don't count (and I've seriously rethought this over the years since the French tax breaks starting with three kids are phenomenal).
The house has so many nice features. It has two porches (front and back), tall windows that open wide, old fashioned cast iron radiators (perfect for getting bread dough to rise just right), the funkiest old chandelier (so ugly and odd that it's beautiful), porcelain door knobs, old pine floors in the living and dining rooms and tile everywhere else and I do mean everywhere (the previous owner was a tiler by trade and he did good work). Only thing missing right now is our Petit Godin and we're waiting on the Portuguese mason to come and raise the chimney.
As much as I love the house, I love the garden more. For a house in the city this garden is huge. The house is set back a bit from the street (thank God) and so there is a small garden area in the front as well as a larger one in the back. The previous owner put in two lovely raised beds and laid a stone patio so there's no grass to tend and mow in the front. When we moved I transferred much of what I had in the garden over at the old Flophouse to these beds. So far so good - the peonies, hydrangeas and roses seem to have survived the migration quite nicely.
As we turn the corner into spring, my attention is now on the back garden and here I'm being a more cautious. There has been a garden here since 1929 when the house was first built and the previous owner was a woman after my own heart - a gardener. The most obvious signs of her work which can be seen even in the dead of winter are the lovely lilac, the two forsythia and an abundance of old climbing roses. I did some investigating and came up with an old aerial photograph of the property and in it you can see that once upon a time there were other trees, bushes and hedges that are now long gone. There is an old well-established perennial bed at the farthest end and so far I've seen daffodils, peonies, ferns and other plants that are coming up slowly but surely as the weather gets better. I don't believe in radical do-overs when it comes to old gardens. My job as I see it is to work with what is already there so that past and present blend seamlessly together.
One feature of the back garden that deserves a mention is the huge stone wall that separates my property from that of the apartment complex next door. This wall is a little piece of Versailles history. Constructed in 1849, it originally ran from the octrois on the avenue de Paris and was built to separate Porchefontaine from the adjacent neighborhood called Petit Montreuil. Today the wall is still in great shape and my role here is to be a good caretaker of my portion of it so it will last for another 150 years.
So many potential projects here with what is not exactly a blank canvas. Starting with the principle that it is best to "make haste slowly" this is what I've been up to over the winter months:
General clean-up: It's always safe to start with what we can all agree is not desirable in any garden in any era: trash, weeds, dead wood, dying hedges. The last was quite the project. The previous owners had planted thuya hedges on both sides of the garden for privacy and I'm sure they looked fabulous for many years. However by 2013 they were overgrown and the one on the right side was sick sick sick - some disease that caused the branches to die and turn rust orange. It was too far gone to be treated (not to mention that it looked just terrible on the neighbor's side of the fence) and so, with the help of a small crew, they came out.
Ivy is pretty in pots but it's a nightmare in any other place in my opinion and when it comes to stone walls it's downright destructive. Armed with a pair of pruning shears, a sharp knife and a tall ladder, I took off all that nastiness that was happily growing in the crack and crevices of that beautiful old stone wall.
Pruning: Started in January and is still on-going. I started by removing all the dead wood on the climbing roses and more recently did a second pass to shape and encourage new growth. I also fertilized as soon as I saw the forsythia was blooming. Thus far I have been rewarded with lots of buds. These are old old roses and I'm going to do everything I can to save them. That said, they have a year to get cracking and I will replace them if they are beyond hope and don't produce to my satisfaction.
More recently I've been tackling some of the flowering shrubs and other hedges. Last Tuesday I put out three large bags for the weekly collect of déchets végétaux (clean green). I'm still waiting on the forsythia which has just started to bloom. I was at a bit of a loss as to how to prune those since I've never had them before in any garden I've actually owned or been responsible for. Thankfully my mother came through with a copy of Cass Turnball's Guide to Pruning. It's all there, everything you need to know to prune right, and a fun read too. Not only is the author a sensible sort, she's hilarious. The "Poppa Bear, Mama Bear, Baby Bear" theory of landscape design had me howling but she is basically right and it's a good analogy to help you properly place trees, shrubs and ground cover in the garden.
Beds: Digging up the existing perennial bed was out of the question until I knew exactly what's there and from what I'm seeing now that was a good move. Would have been a shame to accidentally take out those peonies or daffodils. What I could do was buy some better soil and lightly work it into the existing dirt and cover the roots that were exposed.
No such problem with the bed that was created after the removal of the thuya. I brought the bed out about half a meter and bought huge bags of soil amendments that I worked into the old tired soil. The first beneficiary of this new bed? The neighbor's cat who said, "Cool, a new litter box!" and proceeded to use it as such. Often. Good thing I like cats or I might have reacted badly. Plus the poor thing has a collar with a bell which means that I and every rodent and bird in the vicinity can hear it coming a mile away. Kind of defeats the purpose of a cat. I'd say he's suffering enough and I don't need to add to the misery.
Planting: Since I didn't go to all that work just to make the neighborhood cats happy, I started planting once I had carefully reflected on what I wanted and what would work based on the size of the space and the light. The old thuya bed is the sunniest part of the garden so it seemed to me the right place to put my potager (vegetable garden). I started with the trees: a peach, two apples and a fig. The last was given to me by my neighbor as a "welcome to the neighborhood" gift. I was so grateful that when I bought the other trees at Truffaut's I chose les arbres fruitiers en espalier (espalier fruit trees) that I will train along our common fence. Very pretty and this way I won't ruin the light in her garden. Then I planted lettuce and sweet peas. The lettuce is already up. As for the rest of the bed, the plan is to put in beans, tomatoes and pumpkins. The tomatoes are already up in a little portable plastic greenhouse sitting in the living room. My spouse came home, saw it, raised eyebrows, opened mouth, shut mouth and prudently let it go. After 23 years of marriage, he knows better than to get between a woman and her seedlings.
Pot Rehabilitation: No, I'm not talking about cannabis, I'm talking about those old lovely terra cotta pots for flowers and small trees. The previous owner had tons of them scattered all over the garden (I'm still finding them under hedges) and on the patios. With such bounty there was no way I was going to throw them out even though they looked terrible (plus I'm really really cheap and I won't pay to replace something I had the good fortune to get for free). The inexpensive easy trick to making them look like new is vinager. Just pitch them into a bucket with vinager and water and let them soak overnight. In the morning throw them in the dishwasher. I'm about halfway done and there is something so satisfying in seeing the growing pile of pretty pots on the back porch.
Compost: Another source of marital discord over the years. I believe in compost much like I believe in the Virgin Mary. It's a mystery to me how it all works but I just know that it does. When all I've had is a few pots on a balcony I've thrown the kitchen waste in them and when I finally had a small garden in our ground floor apartment on the avenue de Paris I made small trenches in the beds with the worst soil and put the kitchen waste in them covered with a thin layer of dirt. Within a year the soil was better. Within two it started to be fantastic. My French spouse did not agree with my methods and he was convinced that I would be denounced to the garbage police and shamed and fined. Never happened because it didn't smell and I didn't put anything in there that would attract pests.
With the new garden I actually have room for a real tas de compost (compost pile). In fact the previous owners already had one in the back next to the lilac and behind the forsythia. It's pretty basic and made of concrete but it's a start. And to be absolutely certain that I do not continue with my evil ways, my spouse sent me off to compost class. Part of a local initiative called Opération compostage, it was one hour well spent last night at city hall. At the end I was given a brochure, a little plastic pot with a lid for the kitchen (complete with sticker explaining what I can and can't compost) and, once I signed the CONVENTION DE PARTENARIAT POUR LE COMPOSTAGE EN HABITAT INDIVIDUEL, a pretty little wood compost bin that we loaded into the car and took home. All free though I did agree in the convention I signed to submit to controls over my compost. Imagine my spouse's relief.
All this is just the beginning - the basics. I'm thinking more fruit trees (dwarfs) and a little pond next to the back patio for growing water lilies. The pots once I get them all cleaned up and planted will go in the front all along and around the stairs. I'm also contemplating a pair of small fountains on the front patio - get a little water action going there. And more roses everywhere - you just can't have too many roses, right?
All this is wonderful for my morale. I believe that gardens are magical places where wonderful things happen. Every morning I get up and walk my garden to see what new delightful thing is coming up or budding or blooming. Nothing is more soothing to me than digging in the dirt or just watching the sun as it illuminates the different areas of the garden during the day. It is miraculous. I do not know what the next year will bring but I plan to spend as much of it as I can watching living things grow and lending a light hand to help them along. Because I believe this with all my heart:
"Where you tend a rose, my lad, A thistle cannot grow.”
Frances Hodgson Burnett, The Secret Garden
nettles, or sow lettuce […] either to have it sterile with idleness, or manured with industry, why,
the power and corrigible authority of this lies in our wills. "
William Shakespeare, Othello
I love my little house. It's not much size-wise (55 square meters/592 square feet) but over the years I've come to prefer small living spaces. Less to clean and who in the heck needs more than one bathroom anyway unless you have a famille nombreuse (large family). We stopped at two Frenchlings so we don't count (and I've seriously rethought this over the years since the French tax breaks starting with three kids are phenomenal).
The house has so many nice features. It has two porches (front and back), tall windows that open wide, old fashioned cast iron radiators (perfect for getting bread dough to rise just right), the funkiest old chandelier (so ugly and odd that it's beautiful), porcelain door knobs, old pine floors in the living and dining rooms and tile everywhere else and I do mean everywhere (the previous owner was a tiler by trade and he did good work). Only thing missing right now is our Petit Godin and we're waiting on the Portuguese mason to come and raise the chimney.
As much as I love the house, I love the garden more. For a house in the city this garden is huge. The house is set back a bit from the street (thank God) and so there is a small garden area in the front as well as a larger one in the back. The previous owner put in two lovely raised beds and laid a stone patio so there's no grass to tend and mow in the front. When we moved I transferred much of what I had in the garden over at the old Flophouse to these beds. So far so good - the peonies, hydrangeas and roses seem to have survived the migration quite nicely.
As we turn the corner into spring, my attention is now on the back garden and here I'm being a more cautious. There has been a garden here since 1929 when the house was first built and the previous owner was a woman after my own heart - a gardener. The most obvious signs of her work which can be seen even in the dead of winter are the lovely lilac, the two forsythia and an abundance of old climbing roses. I did some investigating and came up with an old aerial photograph of the property and in it you can see that once upon a time there were other trees, bushes and hedges that are now long gone. There is an old well-established perennial bed at the farthest end and so far I've seen daffodils, peonies, ferns and other plants that are coming up slowly but surely as the weather gets better. I don't believe in radical do-overs when it comes to old gardens. My job as I see it is to work with what is already there so that past and present blend seamlessly together.
One feature of the back garden that deserves a mention is the huge stone wall that separates my property from that of the apartment complex next door. This wall is a little piece of Versailles history. Constructed in 1849, it originally ran from the octrois on the avenue de Paris and was built to separate Porchefontaine from the adjacent neighborhood called Petit Montreuil. Today the wall is still in great shape and my role here is to be a good caretaker of my portion of it so it will last for another 150 years.
So many potential projects here with what is not exactly a blank canvas. Starting with the principle that it is best to "make haste slowly" this is what I've been up to over the winter months:
General clean-up: It's always safe to start with what we can all agree is not desirable in any garden in any era: trash, weeds, dead wood, dying hedges. The last was quite the project. The previous owners had planted thuya hedges on both sides of the garden for privacy and I'm sure they looked fabulous for many years. However by 2013 they were overgrown and the one on the right side was sick sick sick - some disease that caused the branches to die and turn rust orange. It was too far gone to be treated (not to mention that it looked just terrible on the neighbor's side of the fence) and so, with the help of a small crew, they came out.
Ivy is pretty in pots but it's a nightmare in any other place in my opinion and when it comes to stone walls it's downright destructive. Armed with a pair of pruning shears, a sharp knife and a tall ladder, I took off all that nastiness that was happily growing in the crack and crevices of that beautiful old stone wall.
Pruning: Started in January and is still on-going. I started by removing all the dead wood on the climbing roses and more recently did a second pass to shape and encourage new growth. I also fertilized as soon as I saw the forsythia was blooming. Thus far I have been rewarded with lots of buds. These are old old roses and I'm going to do everything I can to save them. That said, they have a year to get cracking and I will replace them if they are beyond hope and don't produce to my satisfaction.
More recently I've been tackling some of the flowering shrubs and other hedges. Last Tuesday I put out three large bags for the weekly collect of déchets végétaux (clean green). I'm still waiting on the forsythia which has just started to bloom. I was at a bit of a loss as to how to prune those since I've never had them before in any garden I've actually owned or been responsible for. Thankfully my mother came through with a copy of Cass Turnball's Guide to Pruning. It's all there, everything you need to know to prune right, and a fun read too. Not only is the author a sensible sort, she's hilarious. The "Poppa Bear, Mama Bear, Baby Bear" theory of landscape design had me howling but she is basically right and it's a good analogy to help you properly place trees, shrubs and ground cover in the garden.
Beds: Digging up the existing perennial bed was out of the question until I knew exactly what's there and from what I'm seeing now that was a good move. Would have been a shame to accidentally take out those peonies or daffodils. What I could do was buy some better soil and lightly work it into the existing dirt and cover the roots that were exposed.
No such problem with the bed that was created after the removal of the thuya. I brought the bed out about half a meter and bought huge bags of soil amendments that I worked into the old tired soil. The first beneficiary of this new bed? The neighbor's cat who said, "Cool, a new litter box!" and proceeded to use it as such. Often. Good thing I like cats or I might have reacted badly. Plus the poor thing has a collar with a bell which means that I and every rodent and bird in the vicinity can hear it coming a mile away. Kind of defeats the purpose of a cat. I'd say he's suffering enough and I don't need to add to the misery.
Planting: Since I didn't go to all that work just to make the neighborhood cats happy, I started planting once I had carefully reflected on what I wanted and what would work based on the size of the space and the light. The old thuya bed is the sunniest part of the garden so it seemed to me the right place to put my potager (vegetable garden). I started with the trees: a peach, two apples and a fig. The last was given to me by my neighbor as a "welcome to the neighborhood" gift. I was so grateful that when I bought the other trees at Truffaut's I chose les arbres fruitiers en espalier (espalier fruit trees) that I will train along our common fence. Very pretty and this way I won't ruin the light in her garden. Then I planted lettuce and sweet peas. The lettuce is already up. As for the rest of the bed, the plan is to put in beans, tomatoes and pumpkins. The tomatoes are already up in a little portable plastic greenhouse sitting in the living room. My spouse came home, saw it, raised eyebrows, opened mouth, shut mouth and prudently let it go. After 23 years of marriage, he knows better than to get between a woman and her seedlings.
Pot Rehabilitation: No, I'm not talking about cannabis, I'm talking about those old lovely terra cotta pots for flowers and small trees. The previous owner had tons of them scattered all over the garden (I'm still finding them under hedges) and on the patios. With such bounty there was no way I was going to throw them out even though they looked terrible (plus I'm really really cheap and I won't pay to replace something I had the good fortune to get for free). The inexpensive easy trick to making them look like new is vinager. Just pitch them into a bucket with vinager and water and let them soak overnight. In the morning throw them in the dishwasher. I'm about halfway done and there is something so satisfying in seeing the growing pile of pretty pots on the back porch.
Compost: Another source of marital discord over the years. I believe in compost much like I believe in the Virgin Mary. It's a mystery to me how it all works but I just know that it does. When all I've had is a few pots on a balcony I've thrown the kitchen waste in them and when I finally had a small garden in our ground floor apartment on the avenue de Paris I made small trenches in the beds with the worst soil and put the kitchen waste in them covered with a thin layer of dirt. Within a year the soil was better. Within two it started to be fantastic. My French spouse did not agree with my methods and he was convinced that I would be denounced to the garbage police and shamed and fined. Never happened because it didn't smell and I didn't put anything in there that would attract pests.
With the new garden I actually have room for a real tas de compost (compost pile). In fact the previous owners already had one in the back next to the lilac and behind the forsythia. It's pretty basic and made of concrete but it's a start. And to be absolutely certain that I do not continue with my evil ways, my spouse sent me off to compost class. Part of a local initiative called Opération compostage, it was one hour well spent last night at city hall. At the end I was given a brochure, a little plastic pot with a lid for the kitchen (complete with sticker explaining what I can and can't compost) and, once I signed the CONVENTION DE PARTENARIAT POUR LE COMPOSTAGE EN HABITAT INDIVIDUEL, a pretty little wood compost bin that we loaded into the car and took home. All free though I did agree in the convention I signed to submit to controls over my compost. Imagine my spouse's relief.
All this is just the beginning - the basics. I'm thinking more fruit trees (dwarfs) and a little pond next to the back patio for growing water lilies. The pots once I get them all cleaned up and planted will go in the front all along and around the stairs. I'm also contemplating a pair of small fountains on the front patio - get a little water action going there. And more roses everywhere - you just can't have too many roses, right?
All this is wonderful for my morale. I believe that gardens are magical places where wonderful things happen. Every morning I get up and walk my garden to see what new delightful thing is coming up or budding or blooming. Nothing is more soothing to me than digging in the dirt or just watching the sun as it illuminates the different areas of the garden during the day. It is miraculous. I do not know what the next year will bring but I plan to spend as much of it as I can watching living things grow and lending a light hand to help them along. Because I believe this with all my heart:
"Where you tend a rose, my lad, A thistle cannot grow.”
Frances Hodgson Burnett, The Secret Garden
Friday, March 22, 2013
FAWCO
I received a very nice email in response to my post The American Diaspora: Lobbying versus Protest pointing out a huge oversight on my part. Today's post is dedicated to rectifying that.
When I wrote last week: "There are American diaspora groups that are working on this. One is ACA (American Citizens Abroad). There is also the AARO (Association of American Residents Abroad). These are the two that are most widely known and both work within the U.S. system to try to effect change" I completely neglected to mention a third organization that is also very well-known and is working hard on behalf of Americans abroad on FATCA/citizenship-based taxation and many other issues:
"To serve as a resource and channel of information among its members;
To provide a voice for American women abroad and to support the rights of all Americans worldwide;
To contribute actively to the global community with a specific focus on education, the natural and human environment, multicultural understanding and international goodwill."
When I wrote last week: "There are American diaspora groups that are working on this. One is ACA (American Citizens Abroad). There is also the AARO (Association of American Residents Abroad). These are the two that are most widely known and both work within the U.S. system to try to effect change" I completely neglected to mention a third organization that is also very well-known and is working hard on behalf of Americans abroad on FATCA/citizenship-based taxation and many other issues:
FAWCO, the Federation of American Women's Clubs Overseas.
Of the three FAWCO is the oldest (founded in 1931). It's a worldwide network of over 75 member clubs in 40 countries with around 15,000 members. Some examples of FAWCO member organizations:
Kenya - American Women's Association of Kenya founded in 1958
Denmark - American Women's Club Denmark founded in 1934
China - American Women's Club of Shanghai founded in 1997
Europe - Association of American Wives of Europeans founded in 1961
(I used to be a member of the last organization which is based in Paris.)
FAWCO's mission statement:
To provide a voice for American women abroad and to support the rights of all Americans worldwide;
To contribute actively to the global community with a specific focus on education, the natural and human environment, multicultural understanding and international goodwill."
In 1995 FAWCO was recognized as an NGO (non-governmental organization) and has special consultative status with the Economic and Social Council of the United Nations.
FAWCO representatives were there in Washington, D.C. for Overseas American Week this year and in past years. They were instrumental in the creation of the Americans Abroad Caucus and, working with AARO, they launched the brilliant (and successful) Tea Bag Campaign in 1975 to make absentee voting possible for the American diaspora.
Before that mail hit my in-box I had no idea of the scope and history of FAWCO's activities. My heartfelt thanks to Lucy Laederich (Former FAWCO president and current president of AARO and FAWCO's U.S. Liaison) for very gently and kindly setting me straight.
A last word. All three of the American diaspora organizations have rich histories, some notable successes and are doing all they can right now on behalf of Americans living abroad. We can help them by supporting their activities and initiatives. They can help us, not only through their lobbying efforts, but by tooting their own horns a bit more. Enough of being shy and discreet, folks.
The time has come for you and the American diaspora to ROAR.
Tuesday, March 19, 2013
My Cancer Journey
Ever mindful of my mother's gentle criticism that sometimes it's hard to find stuff on this blog pertaining to a particular topic (yes, I am 47 years old but that doesn't mean I don't listen to my Mom), after writing today's post I went back and gathered everything I've written so far about my cancer diagnosis and treatment here in France and set up a page for them and then I put a link up on the right-hand sidebar.
Here they are: Cancer Journey.
Not sure how enjoyable they are but you might find them interesting. :-)
Here they are: Cancer Journey.
Not sure how enjoyable they are but you might find them interesting. :-)
Vanity, thy name is....
"Personne n’est jeune après quarante ans mais on peut être irrésistible à tout âge. "
“Nobody remains young past 40, but one can be irresistible at any age.”
Gabrielle “Coco” Chanel (1883-1971)
“Nobody remains young past 40, but one can be irresistible at any age.”
Gabrielle “Coco” Chanel (1883-1971)
(From Jean-Jacques Auffet's Citation du Jour)
I read that this morning and my first thought was Coco never had chemo. Or maybe she did at some point in her life. I'd love to know.
Because, boy, the last thing I felt after coming out of the last fun filled year was "attractive." Hard to put my finger on what bothered me the most: losing my hair and I mean ALL of it everywhere including my eyelashes, seeing my muscles waste away the time I had to spend in bed or on the couch, the scars on my torso or that damn "chambre implantable" model Celsite ST215 by B. Braun which I still have and is so obvious when I wear a débardeur because I'm skinny (on a good day I'm 170-something centimeters and 57 kilos - that's about 5'7 and 126 pounds.)
Now before all this went down I was someone who spent a lot of time, energy and money on maintaining her appearance. Part of it was an integration issue. When I first arrived in France wearing my Seattle-style duds, people made comments and I didn't like that. It wasn't about not being proud of my roots but rather because people in Paris in that era could be rather mean when I showed up somewhere in jeans and tennis shoes. I decided to dress better because that way I could blend in better (camouflage for the stealth migrant I was) and it did put a stop to the ego-destroying comments. Another reasons was my job once I actually had a real one where I had to look like a grown-up. When I had to go into a big meeting or speak in front of hundreds of people, it was not only expected that I look good, it also helped my confidence to know that I was chic from my Jimmy Choo's and Gucci purse right down to my lingerie (and boy did I drop a bundle at Orcanta for that). I used to jokingly refer to it as my "armor."
During my treatment though that all seemed so incredibly stupid and small. Not a priority, I said. And so I kissed my shoes bye-bye, firmly closed the door to my wardrobe, and threw the makeup in a drawer. I didn't even avail myself of the services at the Maison des patients at the clinic that offer makeup help and advice choosing a wig or a scarf or a prosthesis. The last I didn't even bother to get even though it's 100% covered by the national healthcare system here. And I went with the head scarves and didn't bother getting fitted for a wig (also 100% covered).
(Funny story here. I was walking down the Avenue de Paris here in Versailles with my scarf on and as I walked by an older gentlemen, he looked at me and I heard him mutter to himself, "Nous sommes en France quand même." (This is France for heaven's sake). He took me for a conservative North African Moslem woman wearing a headscarf. The only thing he got right was that I am indeed an immigrant. I laughed all the way home. )
I was wrong to put my appearance aside during and after my treatment. I am not going to beat myself up over it but, as I come out the other side, it's useful to think about what I could have done differently. Might be helpful for someone else and if by chance I have to go through another round of treatment, makes sense to apply those lessons learned.
How did I figure this out? I went to the doctor a few weeks ago for another problem and as she (a very well turned-out Frenchwoman) did her thing she asked me when my chemo ended and when I replied "a few months ago," she decided to give me her opinion. And may I say that this is one thing I love, just love, about Frenchwomen? They will tell you what they truly think. Not in an unkind way but just the unvarnished opinion with very little mitigating language and zero BS. To the question, "Does this dress look good on me?" they are very likely to answer, "No, it looks terrible and it's not your color at all. Try something green instead." Never EVER ask their advice if you have thin skin and can't take a truthful direct answer.
Her take on it was that months after my treatment was over I still looked like I was going through chemo. Get down to the hair salon, she said. Just because it's short doesn't mean it can't look stylish. Then try some makeup - a little color on the eyebrows, some mascara and some red lipstick. And finally, dump the scarves and get some cute little hats that go well with jeans and a jean jacket.
I listened carefully to what she had to say and then I marched myself home and hauled out my makeup, my nice shoes and my fancy clothes. A few days later I went down to the center of Versailles and had my hair cut by Lydie and I even bought some new clothes in bright colors and new shoes (no, it's not possible to have too many shoes). Still looking for the hats but with my new cut, I find that I don't really need to hide my head anymore.
Do I feel better? You bet your sweet patootie I do. Having done all that I became aware of some of the nice things the chemo did for my looks. The silver lining post-chemo is that your skin is so soft, just like an infant's, and all those little lines I was getting around my eyes and mouth have mostly disappeared. It's like a facelift. And the hair? Wow, it's so soft, lush and thick.
I wouldn't go so far as to say I look "irresistible" but I don't look half bad either. My first outing with my new look was Sunday mass and it did my ego a world of good to have people tell me how nice I looked. THAT led to what is probably the most important element of attractiveness in a man or a woman: a big smile that radiates happiness and confidence.
Monday, March 18, 2013
Global Labor Mobility and Taxation
"Globalization has forgotten the worker. Scholarship on the tax consequences of globalization emphasizes the movement of capital and corporations, neglecting labor."
Ruth Mason
Tax Expenditures and Global Labor Mobility
Alas, this is all too true. In the debate about catching rich tax cheats and going after tax-evading corporations, the worker is hardly ever mentioned and the impact on him or her isn't even considered in the fights against tax evasion and the implementation of different and creative taxation regimes.
People migrate for many reasons but one of the most common is moving to another country because there are good employment opportunities there as opposed to where they are. It's not just a question of different unemployment rates, it's also because a skill or a degree can be worth more in another market. Speaking English in the U.S. or the U.K. is no big deal in the home country but a lot of English speakers can earn a living in other countries teaching that language or filling a job abroad where the foreign company has decided they want someone with native English. The first is not well-paid but the latter can be if it's combined with other skills and talents including integration into the host country language and culture. Other examples abound like plumbers, electricians, IT workers, secretaries, engineers, musicians, technical writers, construction workers and mid-level managers. The terms "highly-qualified migrant" and "low-skilled labor" do not even begin to do justice to the diversity of the migrants seeking economic opportunity outside of their home countries. Even workers from developed countries can better their situation by moving abroad if they find the right match and the right job.
For globalization to work for people, and not just to the benefit of corporations and elites, it is essential that natural persons (aka "human beings") be able to seek out opportunities all over the world and not just be "captive citizens" of their homelands while capital and jet-setters flow freely from one country to another.
The biggest impediments to global labor mobility are local laws and immigration policies. The question today is: Given the efforts of many states to combat cross-border tax evasion, talk of exit and diaspora taxes, and the attempt to create a worldwide system of financial information exchange are we putting a mighty tool in the hand of governments to extract revenue from their diasporas and to prevent emigration?
I think that is a real possibility. We are already seeing how Americans abroad are disadvantaged compared to the migrants from other countries because of U.S. citizenship-based taxation. Americans who seek work abroad can be double-taxed (owe taxes in both the host country and the U.S.) This is a fact and you have only to check the IRS website to see that, while there are methods to alleviate that burden, they do not eliminate it. Other possible impacts are having to pay for expert advice in order to fill out tax returns and to comply with reporting requirements (all required even if no tax is due).
How many Americans, if they knew the full extent of their own country's worldwide taxation regime and its consequences, would still contemplate taking a job in Canada, South America, Asia or Europe? How many American companies, faced with the added cost and complexity of sending their U.S. personnel overseas, will simply fill the position with a local? High-level managers (executives) will still be able to go but lower-level skilled people like an IT worker or a finance person will be shut out from all the benefits they might have expected to enjoy when they sought employment with a home country multi-national.
From that experience we can extrapolate and imagine what would happen if other countries developed their own "tax the diaspora" schemes. Would a French person bother to go to California to start a small company if he knew he was going to have to report his financial activity and pay taxes to the French government? Ditto for the young person from the U.K. seeking a job in Singapore or a Chinese national offered a job in Canada. Much of it depends entirely on the ability to pay and this is where it could be become flagrantly discriminatory. A potential migrant who is highly-skilled (an executive) or has a particular talent (a movie star) will probably command a high salary in the host country and will be able to pay experts to navigate the home country tax system as it applies to expats. They will be able to take full advantage of globalization and international mobility because they can pay the direct or indirect tax on it. The young who are just starting their careers, and those with skills that command only modest salaries, probably can't.
Many countries have floated the idea of taxing their emigrants. You could almost say that the bigger the budget deficit, the more attractive it looks. Very politically popular. Plus, it would have the added benefit of discouraging emigration in a way that is just devious enough not to fall foul of international law. So why haven't more countries gone ahead and done it?
One reason is because it was almost impossible to enforce. A country can try to say to its diaspora, "OK, ladies and gentlemen, you owe us 1% of your earnings in the host country," but how in the heck to make that stick? A Frenchwoman in Boston has a W-2 so the US knows what she makes and can tax her but that information isn't automatically passed along to the French government. As for the contents of her bank account, American banks are known for their fierce resistance to sharing that information with other countries even when it concerns a national of another country. Other countries have similar policies and privacy laws to prevent it.
This is where automatic worldwide sharing of financial information comes in. The scope of what is being proposed goes way beyond the idle rich and corporations (though this is given as the driver behind it). It is no less than the exchange of huge databases containing private financial information on literally millions upon millions of people. In these databases there will be retirees, plumbers, foreign language instructors, fast-food industry workers, stay at home mothers, and many many others who don't fall into the category of "rich". FATCA contains provisions so that only accounts over a certain amount have to be reported but that is no guarantee that the databases won't still be filled with the lower or middle-income who have retirement savings, for example. There is also no guarantee that other proposals like the French or UK FATCA won't apply different rules and seek a much lower threshold for their citizens living abroad.
The danger is not so much the automatic information exchange itself as it is the potential for governments to use that information in ways that have only a tenuous connection to the goal of unearthing those "rich tax cheats not paying their fair share," and everything to do with their own domestic agendas: extracting tax revenue from all their diaspora members living abroad to balance their homeland budgets and, of course, slowing down emigration of the young, the skilled and semi-skilled, and the adventurous by making it onerous and financially disadvantageous to leave the home country.
The threat to global mobility as I see it is in the combination of a worldwide information exchange of financial information coupled with countries passing their own laws inspired by the American model of citizenship-based taxation. With the first they would actually have means to enforce the second.
I personally do not believe for one moment that these countries would restrict the scope of these new tax laws to the entrepreneurs, idle rich and the investor class. Why? Do the math. In 2010 there were around 40 million immigrants in the U.S. Most are probably not rich or even upper-income. If their home countries could get as little as 100 USD out of them, that would be a chunk of change, wouldn't it? Same holds true for all other governments - even small amounts would make a difference where the diasporas number in the hundreds of thousands or millions of members. And where these people do not have much political power in the home country and only modest salaries in the host country, they have few defenses against this. As far as I've been able to determine there is nothing in international law that would prevent countries from doing this to their emigrants once their governments have the information in hand. And you just have to ask to what extent global mobility would be slowed down by the implementation of enforceable diaspora tax regimes.
Maybe it won't ever happen. Still, I would argue that someone should be watching this closely so that this sort of thing does not evolve into yet another impediment to global mobility and another nightmare for global migrants. What is really distressing right now is that with all these potential impacts on the working international migrant is that international labor organizations and migrants advocacy groups are not more implicated in the discussions around information-sharing initiatives and cross-border tax issues at the international level. There is a real potential here for abuse and the danger is that the burden will fall hardest on those who are least able to bear it.
Not the rich who have access to expensive international legal counsel and who will undoubtedly move their money around to whatever country decides not to share information with the others. But on those who dream of distant shores and on those who are already there and terribly vulnerable twice over: as immigrants in the host country and as emigrants from predatory states.
Friday, March 15, 2013
The American Diaspora: Lobbying versus Protest
Three years now since Congress passed the HIRE Act and with it the now infamous Foreign Account Tax Compliance Act (FATCA) which would require foreign FFI's (banks mostly) to report the accounts held abroad by U.S. citizens. James Jatras calls it "the worst law most Americans have never heard of." I've referred to it as "a road to hell paved in the service of one good intention."
Its original purpose was to expose American citizens living in the U.S. who might be hiding taxable assets abroad. Somehow in the making of this law it escaped the notice of Congress that there are around 6 million "regular folks" (Americans who live and work abroad as wives, husbands, teachers, managers, nurses, and so on) who are directly and adversely impacted by it. The consequences of this law for Americans abroad are very real and hit us right where we live. In some countries Americans are being shut out of local banks since the easiest way for financial institutions (foreign to the U.S. but local to the American expat) to avoid having to comply with U.S. reporting requirements is to "fire the customer." Not easy to live anywhere without access to a basic checking account and can you imagine the surprise (and horror) of these people when this happens just because they are American citizens?
Another impact has been on Americans who are married to non-Americans (mostly women). These foreign spouses are tainted by association. Not only is their financial privacy at risk since their "American connection" means that their information may soon be shooting off to the American IRS along with their spouse's but they too can be shut out of some banking services where the local bank doesn't want to take the risk associated with a "U.S. Person." This has led to some foreign spouses telling their American wives and husbands, "You can stay married to me or you can renounce your U.S. citizenship. Pick one." In other cases we've heard about the foreign spouse has simply taken the American spouse's name off their bank accounts thus rendering her completely dependent on her husband for cash in order to go about her daily business. Where the American spouse may be an older woman (often a stay at home mother) with children who she cannot bring with her if she is forced to return to the U.S., there isn't much choice here.
There are other impacts that I won't go into here but just go over to Isaac Brock Society or check out the ACA website for more information. Needless to say these things have not received much media attention back in the U.S. There are many reasons for this. Americans who lived abroad are not exactly viewed positively by people in the American homeland. We are assumed to be either rich tax cheats or a bunch of hippy-dippy lifestyle migrants who need to stop messing around and get their asses back home. Neither of the two main political parties in the U.S. (nor American lawmakers) want to touch us with a ten-foot pole given how we are framed in the media and in the imaginations of the homeland voters. Too much political risk for an uncertain return on their investment.
Another reason that was brought to my attention recently by a friend in the U.S. is that things basically suck right now in the U.S. and homelanders are having a very hard time. There are some hopeful signs that the economy is recovering but there are still many people un- or under-employed and the fights over the budget, immigration, and many many other contentious topics are leaving an already tired and fearful American public reeling. Given that FATCA does not directly impact them right now (though I think that is going to change very soon), it's understandable that they don't want to divert any mental energy into considering the problems of people who are not actually living in the U.S. - people they tend to not like much anyway.
That said, those of who who do live outside the U.S. and are impacted by FATCA (and citizenship-based taxation) are fighting this. Aside from writing lots of letters and articles and responding to the latter on the Net, we basically have two possible courses of action: lobbying and protest.
Lobbying: There are American diaspora groups that are working on this. One is ACA (American Citizens Abroad). There is also the AARO (Association of American Residents Abroad). These are the two that are most widely known and both work within the U.S. system to try to effect change. They prepare position papers and proposals - ACA has a very fine one that argues for a system of residence-based taxation to replace the actual citizenship-based taxation system we have now. They also offer services like AARO's Tax Seminars which I've been told are excellent. Both try to mobilize Americans abroad to support initiatives like Congresswoman Carolyn B. Maloney's H.R. 597
Commission on Americans Living Abroad Act. Both were present in Washington recently to directly lobby U.S. lawmakers during Overseas American Week.
All good stuff and I'm one who supports their efforts. However, it is not clear how effective they are at mobilizing the 6 million Americans living abroad. Yes, they have access and frankly, they are the only representation we have in the belly of the beast that is the U.S. government. Some of it is a communication problem (which they are addressing with forays into social media and updated websites) but it's also a sense that they are something of a private club, the inner workings of which are completely opaque to those of us looking at them from the outside.* That is a perception that may have no basis in reality but it still matters because when one has to make a decision to join or not, that may be all one has to go on. If I may also address the elephant in the room, there are two of these organizations, so there is the question of which one to join. Anytime someone has to make a choice like that it slows down the decision-making process (or cuts it off completely). What's the difference between them? Should one join one or the other or both? It's confusing and I think an impediment to Americans abroad joining either of these organizations.
Another issue is that of direct action other than lobbying and letter-writing. Neither of these organizations call for things like demonstrations. Why is that? Well, some of it surely has to do with not annoying the American government too much. Organized protests in front of a few American embassies around the world would certainly get a lot of attention but it would most likely get the American government and public really angry, especially if the international press or foreign governments used it in ways that would not be helpful to American interests. There is also the problem that many American abroad really would rather not go public - they may have unresolved compliance issues or they may simply think that it is not wise to make themselves targets for retaliation. Okay, it's not like Obama will send a drone or the Marines to take them out but what about audits or problems getting a passport to come home and see the family, and stuff like that? And for those who have decided to quietly relinquish or renounce, what would be the point?
Protest: Those are a few of the problems with direct action like demonstrations. But are there other options? Yes.
Pressure on local government: FATCA can't work if foreign governments don't agree to it. So some people are writing letters and lobbying not only U.S. lawmakers but also local representatives. This is most effective, of course, where the American citizen in question is a dual citizen. In Europe some people are not only talking to their local lawmakers in their country of residence but also to the European Union. The Canadians are also very active in fighting this - they are writing letters to people like Jim Flaherty, the Canadian Finance Minister, and attending forums where they can directly ask questions about what the Canadian government will do to protect its citizens. Is this working? Well, please note that Canada has not signed a FATCA intergovernmental agreement with the U.S. and that is a big problem for the U.S. government.
Litigation: It's probably not realistic for Americans to fight FATCA in U.S. courts, nor is there much hope for legal action on the international level. However, where FATCA conflicts with local law (privacy or anti-discrimination rules) there is the possibility of taking the local government to court if they allow FATCA to go forward in that country. In this letter Canadian constitutional scholar, Peter Hogg, talks about the ways that FATCA violates the Canadian Charter of Rights and Freedoms. I'd say that given the level of anger about FATCA in Canada and the growing public awareness of what this legislation means for Canadians, someone will sue the Canadian government if they try to implement it. I believe that European dual citizens will do the same.
Renunciation/relinquishment: This is still on the table for a lot of people and you have to wonder if the wave of U.S. Citizens trying to get compliant is not a sign that people are willing to submit to U.S. tax and reporting requirements, but rather prudent preparation for the day when FATCA becomes a reality in their lives and they can get to the U.S. Embassy to shed their U.S. citizenship without too much hassle (the rules are that an American must be tax compliant before he or she can renounce.) The Isaac Brock Society continues to be the place to go for information on how to go about this and more importantly they provide moral support to U.S. citizens who are living in fear, feel deep anguish over the choices they must make, and who feel a deep frustration with the American government, the American public and even those diaspora organizations I mentioned above.
The Secret Americans: Try to imagine for a moment the position of an American citizen or a U.S. person evaluating this situation and trying to formulate a personal strategy to meet it . Can't figure out which diaspora organization he or she should join (and not sure that would be a good use of money in any case). Doesn't see any hope that the U.S. government or public will wake up anytime soon. Gets upset every time he or she sees an article that implies that he is a criminal, a rich tax cheat, a Benedict Arnold, and a selfish, ungrateful, immoral human being. Sees his or her local government joining the FATCA bandwagon with great enthusiasm (the UK is a good example here). Too afraid of the U.S. government (and maybe the local one too) to go public and work for change. Doesn't see how he or she could even get compliant if he wanted to without taking terrible risks (going to jail, paying exorbitant fines, draining the retirement accounts to pay an expensive international tax lawyer and so on).
Faced with all this I think (and Peter Spiro already raised the possibility on Opinio Juris) that a lot of American citizens abroad impacted by FATCA and citizenship-based taxation are......
Doing nothing.
They are continuing to live their lives abroad with one eye on the media reports and the other on a Plan B. They won't come forward but they won't renounce either. Instead they are trying to figure out ways to get off the radar like switching over to a local credit union if their banks kick them out or allowing their spouses to take their names off the joint accounts and closing the personal ones. Stuff like that. I wouldn't underestimate their creativity - after all, adversity is the mother of invention.
Then they just put the U.S. passport in a drawer and fuhgeddaboudit. Forget about going to the States on vacation, don't register the kids with the U.S. Embassy and never EVER tell anyone in the country of residence their citizenship status unless it's absolutely necessary. Move full speed ahead with integration into the host country. No more being an unpaid ambassador or arguing the finer points of American politics with the locals - forget being an American abroad and be French, Chinese, German, Venezuelan. Cut off the American family still living in the U.S. (or tell them that they have to buy a plane ticket to come see the nieces, nephews, siblings, cousin and grandkids). Take the children out of any American cultural organizations or schools and if they are young enough, don't even tell them they are American. If they were born abroad, they may never have to know.
Is this doable? Maybe. It is a calculated risk but I think it's one that many are taking. This is not the path I've chosen but may I say that I sympathize with them and I completely understand why someone would do this. Look, folks, if the American government can't give these people a clear palatable path to follow and they don't see any way out of this terrible conundrum, then don't be surprised if they clear one for themselves using whatever resources are available to them.
And, who knows, perhaps one day things will be better and they (or their children) will be able to come out of the closet and be Americans again.
(*I just read my email and there is an outstanding letter from ACA in my inbox detailing their efforts and accomplishments in this fight. This is exactly what is needed. Bravo. Also they recently re-designed their website and I had a look when I was writing this post. Much much better. I encourage everyone to go have a look. Here's the link again: American Citizens Abroad.)
Its original purpose was to expose American citizens living in the U.S. who might be hiding taxable assets abroad. Somehow in the making of this law it escaped the notice of Congress that there are around 6 million "regular folks" (Americans who live and work abroad as wives, husbands, teachers, managers, nurses, and so on) who are directly and adversely impacted by it. The consequences of this law for Americans abroad are very real and hit us right where we live. In some countries Americans are being shut out of local banks since the easiest way for financial institutions (foreign to the U.S. but local to the American expat) to avoid having to comply with U.S. reporting requirements is to "fire the customer." Not easy to live anywhere without access to a basic checking account and can you imagine the surprise (and horror) of these people when this happens just because they are American citizens?
Another impact has been on Americans who are married to non-Americans (mostly women). These foreign spouses are tainted by association. Not only is their financial privacy at risk since their "American connection" means that their information may soon be shooting off to the American IRS along with their spouse's but they too can be shut out of some banking services where the local bank doesn't want to take the risk associated with a "U.S. Person." This has led to some foreign spouses telling their American wives and husbands, "You can stay married to me or you can renounce your U.S. citizenship. Pick one." In other cases we've heard about the foreign spouse has simply taken the American spouse's name off their bank accounts thus rendering her completely dependent on her husband for cash in order to go about her daily business. Where the American spouse may be an older woman (often a stay at home mother) with children who she cannot bring with her if she is forced to return to the U.S., there isn't much choice here.
There are other impacts that I won't go into here but just go over to Isaac Brock Society or check out the ACA website for more information. Needless to say these things have not received much media attention back in the U.S. There are many reasons for this. Americans who lived abroad are not exactly viewed positively by people in the American homeland. We are assumed to be either rich tax cheats or a bunch of hippy-dippy lifestyle migrants who need to stop messing around and get their asses back home. Neither of the two main political parties in the U.S. (nor American lawmakers) want to touch us with a ten-foot pole given how we are framed in the media and in the imaginations of the homeland voters. Too much political risk for an uncertain return on their investment.
Another reason that was brought to my attention recently by a friend in the U.S. is that things basically suck right now in the U.S. and homelanders are having a very hard time. There are some hopeful signs that the economy is recovering but there are still many people un- or under-employed and the fights over the budget, immigration, and many many other contentious topics are leaving an already tired and fearful American public reeling. Given that FATCA does not directly impact them right now (though I think that is going to change very soon), it's understandable that they don't want to divert any mental energy into considering the problems of people who are not actually living in the U.S. - people they tend to not like much anyway.
That said, those of who who do live outside the U.S. and are impacted by FATCA (and citizenship-based taxation) are fighting this. Aside from writing lots of letters and articles and responding to the latter on the Net, we basically have two possible courses of action: lobbying and protest.
Lobbying: There are American diaspora groups that are working on this. One is ACA (American Citizens Abroad). There is also the AARO (Association of American Residents Abroad). These are the two that are most widely known and both work within the U.S. system to try to effect change. They prepare position papers and proposals - ACA has a very fine one that argues for a system of residence-based taxation to replace the actual citizenship-based taxation system we have now. They also offer services like AARO's Tax Seminars which I've been told are excellent. Both try to mobilize Americans abroad to support initiatives like Congresswoman Carolyn B. Maloney's H.R. 597
Commission on Americans Living Abroad Act. Both were present in Washington recently to directly lobby U.S. lawmakers during Overseas American Week.
All good stuff and I'm one who supports their efforts. However, it is not clear how effective they are at mobilizing the 6 million Americans living abroad. Yes, they have access and frankly, they are the only representation we have in the belly of the beast that is the U.S. government. Some of it is a communication problem (which they are addressing with forays into social media and updated websites) but it's also a sense that they are something of a private club, the inner workings of which are completely opaque to those of us looking at them from the outside.* That is a perception that may have no basis in reality but it still matters because when one has to make a decision to join or not, that may be all one has to go on. If I may also address the elephant in the room, there are two of these organizations, so there is the question of which one to join. Anytime someone has to make a choice like that it slows down the decision-making process (or cuts it off completely). What's the difference between them? Should one join one or the other or both? It's confusing and I think an impediment to Americans abroad joining either of these organizations.
Another issue is that of direct action other than lobbying and letter-writing. Neither of these organizations call for things like demonstrations. Why is that? Well, some of it surely has to do with not annoying the American government too much. Organized protests in front of a few American embassies around the world would certainly get a lot of attention but it would most likely get the American government and public really angry, especially if the international press or foreign governments used it in ways that would not be helpful to American interests. There is also the problem that many American abroad really would rather not go public - they may have unresolved compliance issues or they may simply think that it is not wise to make themselves targets for retaliation. Okay, it's not like Obama will send a drone or the Marines to take them out but what about audits or problems getting a passport to come home and see the family, and stuff like that? And for those who have decided to quietly relinquish or renounce, what would be the point?
Protest: Those are a few of the problems with direct action like demonstrations. But are there other options? Yes.
Pressure on local government: FATCA can't work if foreign governments don't agree to it. So some people are writing letters and lobbying not only U.S. lawmakers but also local representatives. This is most effective, of course, where the American citizen in question is a dual citizen. In Europe some people are not only talking to their local lawmakers in their country of residence but also to the European Union. The Canadians are also very active in fighting this - they are writing letters to people like Jim Flaherty, the Canadian Finance Minister, and attending forums where they can directly ask questions about what the Canadian government will do to protect its citizens. Is this working? Well, please note that Canada has not signed a FATCA intergovernmental agreement with the U.S. and that is a big problem for the U.S. government.
Litigation: It's probably not realistic for Americans to fight FATCA in U.S. courts, nor is there much hope for legal action on the international level. However, where FATCA conflicts with local law (privacy or anti-discrimination rules) there is the possibility of taking the local government to court if they allow FATCA to go forward in that country. In this letter Canadian constitutional scholar, Peter Hogg, talks about the ways that FATCA violates the Canadian Charter of Rights and Freedoms. I'd say that given the level of anger about FATCA in Canada and the growing public awareness of what this legislation means for Canadians, someone will sue the Canadian government if they try to implement it. I believe that European dual citizens will do the same.
Renunciation/relinquishment: This is still on the table for a lot of people and you have to wonder if the wave of U.S. Citizens trying to get compliant is not a sign that people are willing to submit to U.S. tax and reporting requirements, but rather prudent preparation for the day when FATCA becomes a reality in their lives and they can get to the U.S. Embassy to shed their U.S. citizenship without too much hassle (the rules are that an American must be tax compliant before he or she can renounce.) The Isaac Brock Society continues to be the place to go for information on how to go about this and more importantly they provide moral support to U.S. citizens who are living in fear, feel deep anguish over the choices they must make, and who feel a deep frustration with the American government, the American public and even those diaspora organizations I mentioned above.
The Secret Americans: Try to imagine for a moment the position of an American citizen or a U.S. person evaluating this situation and trying to formulate a personal strategy to meet it . Can't figure out which diaspora organization he or she should join (and not sure that would be a good use of money in any case). Doesn't see any hope that the U.S. government or public will wake up anytime soon. Gets upset every time he or she sees an article that implies that he is a criminal, a rich tax cheat, a Benedict Arnold, and a selfish, ungrateful, immoral human being. Sees his or her local government joining the FATCA bandwagon with great enthusiasm (the UK is a good example here). Too afraid of the U.S. government (and maybe the local one too) to go public and work for change. Doesn't see how he or she could even get compliant if he wanted to without taking terrible risks (going to jail, paying exorbitant fines, draining the retirement accounts to pay an expensive international tax lawyer and so on).
Faced with all this I think (and Peter Spiro already raised the possibility on Opinio Juris) that a lot of American citizens abroad impacted by FATCA and citizenship-based taxation are......
Doing nothing.
They are continuing to live their lives abroad with one eye on the media reports and the other on a Plan B. They won't come forward but they won't renounce either. Instead they are trying to figure out ways to get off the radar like switching over to a local credit union if their banks kick them out or allowing their spouses to take their names off the joint accounts and closing the personal ones. Stuff like that. I wouldn't underestimate their creativity - after all, adversity is the mother of invention.
Then they just put the U.S. passport in a drawer and fuhgeddaboudit. Forget about going to the States on vacation, don't register the kids with the U.S. Embassy and never EVER tell anyone in the country of residence their citizenship status unless it's absolutely necessary. Move full speed ahead with integration into the host country. No more being an unpaid ambassador or arguing the finer points of American politics with the locals - forget being an American abroad and be French, Chinese, German, Venezuelan. Cut off the American family still living in the U.S. (or tell them that they have to buy a plane ticket to come see the nieces, nephews, siblings, cousin and grandkids). Take the children out of any American cultural organizations or schools and if they are young enough, don't even tell them they are American. If they were born abroad, they may never have to know.
Is this doable? Maybe. It is a calculated risk but I think it's one that many are taking. This is not the path I've chosen but may I say that I sympathize with them and I completely understand why someone would do this. Look, folks, if the American government can't give these people a clear palatable path to follow and they don't see any way out of this terrible conundrum, then don't be surprised if they clear one for themselves using whatever resources are available to them.
And, who knows, perhaps one day things will be better and they (or their children) will be able to come out of the closet and be Americans again.
(*I just read my email and there is an outstanding letter from ACA in my inbox detailing their efforts and accomplishments in this fight. This is exactly what is needed. Bravo. Also they recently re-designed their website and I had a look when I was writing this post. Much much better. I encourage everyone to go have a look. Here's the link again: American Citizens Abroad.)
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