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Friday, January 24, 2014

The American Diaspora Meets a Polarized America

It is one thing to read about the polarization of politics in the American homeland; it is quite another to meet it en direct.

The news that the Republicans plan to vote a resolution calling for the repeal of FATCA has generated a veritable tsunami of articles in the American media with strangely similar headlines:

Republican Party To Vote For Repeal Of Anti-Tax Dodging Law

Why Are Republicans Plotting To Sabotage A Crackdown On Tax Evasion?

It is interesting to see just how far and how deep the meme "American abroad = rich tax evader" has sunk into the American mindset.  Americans abroad - the au pairs, English teachers, translators, NGO workers, computer programmers, artists, writers, university professors, managers, musicians, and retirees -  are rightfully a bit confused.  Are these journalists and commenters really implying that the only Americans abroad are rich tax-evading champagne swillers and yacht owners? Please, homelanders, stop and think for a moment and use your common sense:
Since when do billionnaires watch other people's children, teach English or grade undergraduate papers?

Allow me to point out the arrogance here.  Homelanders seem to be saying that our diaspora (Americans abroad) is special and totally unlike any other developed country's diaspora being composed entirely of A. criminals and B. the idle rich.

Hate to break the bubble, folks, but Americans abroad are just as diverse as Americans in the homeland.  We come in all shapes, sizes, colors, creeds and (yes, Virginia) income levels. And however we came to cast ourselves on distance shores, the reality is that most of us have to work for a living.  Just like you.

Homeland Americans (in part because of the fallacious drivel spouted by some American journalists and politicians, but also because they have interesting fantasies about life outside the U.S.) are under the mistaken impression that FATCA only applies to rich Americans in the U.S. who shuttle their money (and perhaps their precious selves) offshore to evade taxes.  They genuinely think that it does not apply to the checking, savings and retirement accounts of their dear friend/son/daughter/cousin/old classmate who was lucky enough to have landed a job or find the love of his or life in Shanghai/Bangalore/Bordeaux/Belize/Sao Paulo.  

I will put this as succinctly and as clearly as possible:

The FATCA rain falls on the just and the unjust alike.

The law is so broad, and casts such a wide net, that it impacts a few Americans living in the homeland with foreign accounts, and ALL Americans living abroad with local accounts including people who don't even know they are Americans.

Rich, poor, middle-income, tax compliant, knowingly non-compliant, unknowingly non-compliant, black, white, Asian, student, worker, manager, teacher, professor, entrepreneur - in one way or another FATCA impacts them all if they are U.S. citizens or Green Card holders and live outside the U.S..  If they don't have enough savings to put them over the reporting thresholds, they still face the distinct possibility that their local bank (the one located in the city/country where they actually live) will close their accounts because they are Americans and aren't rich enough for the bank to justify keeping them as customers because of the added reporting costs. In some cases, it's having an impact on their ability to get jobs or form business partnerships.

This violent reaction in the homeland seems to indicate that we can't even have a civil conversation about this.  You know the kind of conversation I'm talking about?  The one where we listen to each other, find common ground, and work toward a solution.  Does that even exist any more in America?  Or has polarization and the "two-fossil" system made that impossible?  (I'd really like to know so I can put it under the appropriate category in my Pros and Cons of American citizenship file.)

It's driving many of us to despair including quite a few whose sympathies are on the Left/Progressive side of the American political spectrum.  This comment from Deckard over at Brock (Welcome to the IBS Wall of Shame) I think is quite typical of the emotions that many of us (Left, Right or independent) feel watching the American political scene on any topic.
"Man, what an upside-down world we’re living in. I used to think I was parked somewhere on the political spectrum a bit left of centre – in Canadian terms, somewhere between the Liberals and the NDP. 
In American terms, however, you could take every political party in Canada and they would all be simply sucked into the giant black hole that now yawns between the Democrats and Republicans. A foul place from which not even the light of day and reason can escape. 
Now I wouldn’t even know what to consider myself – and I don’t think I even give a rats’ ass about it anymore. What this journey over the last two years has made me realize is that party politics, especially in America, is simply a sideshow distraction designed to keep the populace focussed on the puppets instead of the puppeteers. And how the crowds willingly oblige, whether they prefer Punch as a Liberal or Judy as a Conservative or vice-versa. Both extremes are blinded by hate and ignorance and incapable of recognizing neither a common friend nor foe. It’s terrible. 
Some weeks, however, one side or the other makes a wild dash towards the fence and astonishes us with their breathtaking stupidity. This week it’s definitely the Progressive’s turn. In the run-up to the RNC’s announcement tomorrow about FATCA, we have been witnessing the most shameless display of ignorance, smug superiority and just downright insensitivity from what can conveniently be defined as “the Left”. While I am not, and never will be, a fan of the Republicans, I do hope that their latest effort – however cynical, calculated or political it might be – will actually help to kick-start some real awareness, discussion and education about FATCA that extends across the entire political spectrum. Jeebus knows we need it. 
In the meantime though, in these very early days of more mainstream FATCA coverage, we are treated to multiple spectacles of supposedly hip, well-educated, socially-aware liberals turning this impending resolution by the RNC into just another knee-jerk excuse to bash Republicans, rich tax cheats, 1%ers, white balding guys with perspiration and whoever else they happen to detest this week. Lost in the holier-than-thou pontificating is anything even remotely resembling coherent thought, basic research, logic, compassion or any of the things they were supposedly taught in their apparently ineffective university classes. And, yes, these words are coming from ME – someone who has always self-defined as a small-l liberal! Like I said, down is up and up is down – it’s simply insane what’s going on."


Peter W. Dunn said...

Victoria, great minds think alike. I just posted this:

Kris Brazil said...

Complete agree. Nothing further. I would never give up my American citizenship over this, but it's really quite a crappy situation.

Blaze said...

As usual an excellent post Victoria.

Two more attacks on us today. An article in Tax Connections says Canadians who suggest FATCA violates Canadian sovereignty are being "inflammatory" and "alarmist"

A speaker at the RNC (where we hope sane heads will prevail to repeal FATCA)suggested Democrats think women can't control their libido without the help of the government.

With those attitudes, what hope is there for a reasonable resolution to this?

We need to keep fighting, but it is becomes increasingly clear trying to fight with facts isn`t working.

AtticusinCanada said...

I have tried on the prog blogs some of which I have been a long time member to explain this issue.

On only ONE did I have any success. The framing in the head lines is a lie and it goes down hill from there.

Trying to report FACTS that isn't just the republicans opposing this and why is like climbing Mt. Everest. The political climate in the U.S. is such that there is no longer any discussion. There is hyperbole and shouting and no workable solutions are to be offered. "Off with their heads" is a mantra. From the outside looking in it certainly is shocking.

Anonymous said...

Cynthia Dillon ‏@DillonCynthia 30m
Resolution to repeal FATCA (out of 11other R's), passed by RNC at General Session #FATCA

Cynthia Dillon is Republicans Abroad Radio host

from Scandinoovia

Anonymous said...

Cynthia Dillon ‏@DillonCynthia 30m
Resolution to repeal FATCA (out of 11other R's), passed by RNC at General Session #FATCA

Cynthia Dillon is Republicans Abroad Radio host

from Scandinoovia

kermitzii said...

Vitoria and Block bloggers, just realize you are light years ahead of everybody. You need to reduce expectations of public perceptions. The next stage is education. Imagine you go to into fourth grade and explain USA tax code and epat rules. Kermit

johndavidson said...

From the post: "Hate to break the bubble, folks, but Americans abroad are just as diverse as Americans in the homeland." Another way of putting it would be, "Americans abroad are just as diverse as all the immigrants who make their way to the US," often doing the work that Americans already in the US can't or don't want to do — from harvesting crops to high-tech research. Very few are billionaire investors living off dividends or other financial assets; most of those who are working are making a positive contribution to the social safety nets such as the payroll taxes they pay to FICA, etc."

AtticusinCanada said...

The sheer stupidity of thinking expat populations are anymore 1 percenters than they are is shocking.

It' an assumption that needs debunking badly. I've been in Canada a very long time. I've met lots of Americans living here ..not ONE was in the ONE PERCENT. I guess going by their logic you can only be part of the 99 percent if you live there.

I hate blanket statements but, they are making ALL Americans look stupid. I'd love to see a Rick Mercer questions the Americans on FATCA segment. Interviewing ALL these prog bloggers. They sound EXACTLY like tea party members in that they have no idea what FATCA really encompasses but, they think they do know. They are right and you are wrong. You are an expat so you must be rich...we're no more rich than you are and no you do not have a right to destroy our families for your selfish benefit.

Anonymous said...

Finally a magazine that GETS it:

Sedulia said...

Thank you for this article which I am reposting everywhere I can think of. FATCA is not only hurting us classic US expats but also turning a lot of people who are half-American and normally very pro-American into anti-Americans.

Sedulia said...

I've been reposting this excellent article everywhere I can think of.

Besides badly hurting us normal expats, FATCA is doing a great job of turning people who are half- or one-quarter American into anti-Americans by taxing them even though in many cases they've never lived in the USA, much less worked there.

Worst law ever for us expats.

Northerndar said...

Excellent post. I sent it on to friends and also posted on an American progressive blog . You hit the nail on the head about billionaires
babysitting other peoples kids.

Patrick said...

Victoria- I have been reading some of the posts from the ‘Think Progress’ site (and you, Peter Dunn, Daniel et al have the patience of saints)

It made think of Obama’s ‘New Progressives’ and Bush’s Neocons and the significance of the last sentence of Orwell’s Animal Farm:
“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

Victoria FERAUGE said...

@Peter, Great post! And thanks for the help when I was being beaten up by one fellow over at Think Progress.

@Brazil in my eyes, Oh, it indeed sucks but I strongly suspect that the path many are taking is a "wait and see" while taking a few small steps to protect themselves. Getting a second citizenship, for example, and then just putting that old US passport in a drawer and forgetting about it for the time being. Peter Spiro has talked about this over at Opinio Juris - that a new group of Closet Americans is being formed under the radar.

@JohnDavidson, That is a very good way of putting it. Thank you - I like it much better than the way I said it.

@Sedulia & Northendar, Thank you! However any one American abroad stands on FATCA/CBT the meme that we are all rich criminals is a really dangerous one for ALL OF US. It opens the door for further abuse and an even worse situation than the one we are in now. We all have an interesting in fighting that stereotype lest we become even more of a target.

@Patrick, I was very grateful to Suzanne and Peter and others for their comments and support. Kept me from saying something that would have landed me in the confessional that week. :-)

Patrick Cain said...

Hi, Victoria -

You inspired us to dig into some Canadian census data we've had around for a while. Blog post here:

Victoria FERAUGE said...

Hi Patrick,

I just wrote you an email through the website and when I hit "send" it said, "Sorry, there's a problem..." :-)

So I'll answer here as well just in case you don't receive the mail.

Thank you, thank you, thank you for the article. Wow, REAL data, hard facts. It's deeply appreciated as well as your very kind words about the Flophouse.

In your article you inquire about EU numbers. Here is someone who might be able to help you with that: Dr Amanda Klekowski von Koppenfels. She's done a lot of research into Americans in Europe and I think she would either know or know someone who knows where that information can be found.

All the best to you,


Unknown said...

I have tried, without success,to introduce the discussion of FATCA to wider audiences in the economist and other communities. Many of these blogs and forum are generally liberal to progressive in their political philosophy but they are closed minded when it comes to FATCA.

We have to break out of 'preaching to the choir' if we are to have any success in any effort to repeal or even modify FATCA.

Any suggestion?

Anonymous said...

What a disgrace these linked news articles are, they illustrate as much as the comments underneath, made by homeland US peeps that US mainstream propaganda seems to work. It's brainwashing par excellente, making those US Americans living in their homeland believe this is all about 'tax cheat prevention'. Makes us want to give up on our desire to even consider immigrating to the USA! We feel the USA is doomed even more than before, BECAUSE of its citizenship based taxation and FATCA. It shows once again, how arrogant and bullying the US Government really is. It is sad to see (going by the comments under the quoted articles), that the average US citizen has absolutely no grasp on what's really happening.

Anonymous said...

both of my kids are American because they were born there while i was working there. Sooner or later they are taxable, even though they haven't lived there since birth. Oh, and they aren't billionaires....

Sad Businesswoman said...

This is such a lousy law. This just make any American trying to do business oversea so much harder. Because of this law, I think the left does not really know how the real world works.

Rhodri C. Williams said...

Wonderful comment. I still retain some affinity for the donkey-oriented fossil and would love it if Republican efforts to get rid of FATCA succeeded, whether based on premises I actually agree with or not, in (1) abolishing this pathetic dog's breakfast of a law, and (2) distracting Republicans from exacerbating the damage the administration itself has inflicted on health care reform.

Christophe said...

Axa Banque ferme les comptes de ses clients américains

When is the first lawsuit? I can't believe they're allowed to do that. Literally disgusted by what my country of origin is allowing. Human rights are totally disregarded.
Someone needs to send that to Moscovici.

Victoria FERAUGE said...

@James, I think it's all about persistence. Folks like Marvin have been at it for years now and it literally took years before he and others finally got through. So we just have to keep buzzing like the mosquitoes we are and if they say "no" once, get right back in there and hit them again! If nothing else they get might get so irritated that they will us five minutes in the hope we;ll top annoying them. :-)

@anonymous. Oh boy, have to agree that some of the comments to the articles are really amazing...

@anonymous, Yikes, accidentals. Are your children still young or are they adults?

@Sad businesswoman, What is really funny is that in the US the Left is for FATCA and in Canada the Left is against it.

@Rhodri, Thanks. Yeah, I'm not a huge fan of the Repubs even though I am a conservative. On the other hand, I think they are right on this one and I deeply appreciate their support. Having now become a single-issue voter I'd have to say that they definitely have my vote.

@Christophe, Yeah, I heard that too. I saw a Tweet from a Frenchman and it said that he had two weeks to find another bank since he was outed as a "US Person" Former French military, he said. I mean, what the hell?