tag:blogger.com,1999:blog-2424131704277823220.post8359903198466628484..comments2023-09-23T11:16:00.352+02:00Comments on The Franco-American Flophouse has moved: Subservient Citizens and Anarchist CalisthenicsVictoria FERAUGEhttp://www.blogger.com/profile/16319699673885400472noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2424131704277823220.post-21503698177799901882013-04-29T05:40:05.230+02:002013-04-29T05:40:05.230+02:00Back in the late 1940s the Treasury negotiated a b...Back in the late 1940s the Treasury negotiated a bunch a tax treaties(like 7 or 8) that allowed the IRS to collect taxes on behalf of foreign governments. They were all basically rejected by the Senate Foreign Relations Committee with instructions to Treasury to generally avoid Assistance in Collection provisions in tax treaties and if necessary assistance in collection should not apply to US citizens(hence the reciprocal treatment in Canada). Thus even fifty years later Assistance in Collection provisions in US tax treaties are very rare and when they do exist the do not allow for the collection of foreign taxes upon US citizens. Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-26076782666989460932013-04-28T07:37:54.859+02:002013-04-28T07:37:54.859+02:00@Tim, thanks for providing a bit more context aro...@Tim, thanks for providing a bit more context around this. <br /><br />Do you know why the provisions for explicit assistance were stripped out? Victoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-21499198164371343652013-04-27T06:15:05.103+02:002013-04-27T06:15:05.103+02:00The fundamental problem is the US Congress basical...The fundamental problem is the US Congress basically for decades has refused to help other countries collect taxes through the help of the IRS other than through the most rudimentary ways. In fact some like Allison Christians have argues that earlier and older tax treaties back in the 1940s and 1950s compelled countries including the US to provide greater assistance to each other. By the 1970s and tax treaties because more standardized many of the provisions requiring explicit assistance between countries were stripped out. Automatic Exchange of Information and Assistance in Collection are nothing new.<br /><br />Where perhaps the tax treaty model have fallen behind is in capital gains tax. Historically tax information exchange has been centered around FDAP income not cap gains. So while most countries with cap gains tax require domestic reporting by stockbrokers etc of cap gains historically this has not extended to non residents held accounts. Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-43958976798151489432013-04-26T13:24:40.310+02:002013-04-26T13:24:40.310+02:00@Rhodri, Thank you for a wonderful comment. Oh p...@Rhodri, Thank you for a wonderful comment. Oh please do read Scott's work - based on what I know of your interests I think you would really enjoy his ideas.<br /><br />I see your point - we are, indeed, "legible" to our countries of residence. And, yes, there are mechanisms already in place, like tax treaties, so that information can be exchanged if a government is sufficiently motivated to do so.<br /><br />But some things get in the way of making that easy for home countries.<br /><br />Take, for instance, unique taxpayer identifiers. Necessary in a country where many people may share the same name. In the US there is the Social Security number and in France you find the same thing. The two systems have nothing to do with each other. To my knowledge the French government doesn't even know my American number and I'm sure the US government hasn't got a clue what my French one is and could care less.<br /><br />Not so easy to come up a system that would tie the two together - either link them in some way or come up with a common system. Why not an international taxpayer identification number? Sounds like way too much trouble and not realistic right now. So they are looking for other methods. If the tax treaties and current level of information exchange really were satisfactory, they wouldn't be bothering to come up with a Plan B.<br /><br />That's my take on it. What do you think?Victoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-55411520455006239022013-04-25T11:53:50.989+02:002013-04-25T11:53:50.989+02:00Hi Victoria,
Thanks as always for a wonderfully t...Hi Victoria,<br /><br />Thanks as always for a wonderfully thought-provoking post. I will put Scott on my reading list, he clearly has a nice way of dis-obfuscating modern life. <br /><br />One thing I would like to take up though. I think you might describe the ‘tacit agreement’ between states such as the US and their citizens abroad in a way that doesn’t quite do justice to the latter. Here is your description:<br /><br />“We, Americans abroad, leave the country and live elsewhere and we don't ask for anything or make demands of the home country government while we are outside of U.S. territory. In exchange, the home country government leaves us alone and doesn't make any demands on us other than acquiring and using a U.S. passport to enter the territory." Most other nation-states did something very similar since it really wasn't practical to try and exert sovereignty over one's absent citizens.”<br /><br />I think the key point I would add is that (1) we as citizens abroad are obliged to make ourselves legible to our country of residence (after all the earned income deduction applies in principle only upon compliance with one’s tax obligations in one’s state of residence); and (2) that this means that we are in fact legible, at least on a case by case basis, in states that have established cooperation on taxation issues with the US. And to be honest, that makes us legible as anyone who never left the country. I can be audited just as easily in Sweden, in effect, as in Arkansas, FATCA or no FATCA. <br /><br />I think this point also helps to demonstrate that the net loss to the US of neither ‘reading’ nor taxing its citizens abroad was offset by a corresponding gain, namely the benefits of being able to freely ‘read’ (and tax) all the non-citizens living in the US. So in this sense, it is hardly is if the US was making a big concession that it now needs to claw back. And citizens living outside their country of citizenship were certainly not exploiting the system in any way unless they failed to pay taxes in their residence state. <br /><br />The funny thing is that the US strategy to make its citizens abroad hyper-legible is not bringing any clear gains to anyone. If the point was to engage in flat-out double taxation (I keep paying in Sweden but also break off another ten percent and send it to Washington), that would be one thing. Objectionable because no one else in the world has to do it (but the Eritreans) but straightforward and suited to the purpose of raising extra revenues during hard times. <br /><br />Instead, the US has chosen, in effect, to conduct a semi-audit on all of us, every year, in perpetuity. So they blimp up the IRS with yet further pencil-pushers, displace a lot of the cost onto foreign banks (which seek to dump these costs, in turn, by denying services to US citizens abroad), and hope to recoup some of the losses through a dishonest and terrifying campaign of automatically applying the maximum penalty for failures to comply with previously dormant and virtually unknown reporting requirements.<br /><br />Now if that is not a theme-song for some anarchist calisthenics, I don’t know what is. <br />rhodriwilliamshttp://terra0nullius.wordpress.com/noreply@blogger.com