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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Saturday, August 20, 2011

The American government, addicted to the money that Americans earn and save, is trying desperately to ruin the lives of those that live overseas.....

Addicted to American's earnings and wealth, like a heroin addict is addicted to their drugs, the American government is trying desperately to squeeze more money out of citizens living overseas and making life much more difficult and miserable for everyone in the process.

It is important to understand, that overseas Americans have additional government filing requirements such as declaring all foreign financial accounts including those accounts that these people have signatory authority over even if they do not not have an ownership interest. Also, Americans have difficult forms to fill out and file for equity interests in private companies so that the IRS can pierce the corporate veil and try to tax Americans for these interests if they do not deem them to be legitimate in their eyes.

The arrogance of the American government is amazing as I once experienced when meeting with IRS representatives that American living overseas are considered all 'guilty' of cheating by IRS agents and have to 'prove' their innocence. When I objected and said that we should tar and feather this clown and frog walk him through the streets of Hong Kong, he defended himself saying that he is only carrying out the laws of Congress. I offered to do the same thing to them too if they come to Hong Kong.

Now, the American central government is leveling onerous regulations on foreign financial institutions that require them to report assets of Americans directly to the American government......
FATCA is a blunt instrument for which foreign banks have no choice but to each spend tens of millions of dollars to help the U.S. enforce its own tax law," said Scott Michel, a tax lawyer at Caplin & Drysdale in Washington, D.C.
From here. So what, some may say, but there is always the law of unintended consequences to deal with. Foreign financial institutions have always been reluctant to open accounts for Americans and are now refusing to do so for Americans now due to the onerous new rules....
In June, the private banking arm of HSBC (LSE:HSBA.L - News) said it would stop offering services to U.S. residents outside the United States because of the cost of complying with the rule. That month, Michael Ambuehl, Switzerland's secretary of state for international tax and financial matters, told a conference in Zurich that FATCA showed that "Switzerland is becoming a target of intense international greediness." Even the European Commission has objected, and experts say other countries may create their own FATCA-style regimes for U.S. banks or withdraw from U.S. capital markets.
In some jurisdictions, due to the complexity and risks posed to their other customers, banks are even closing accounts of American customers and do not want to offer services to them at any price. This is a particular problem in Switzerland were some private banks such as Lombard Odier has refused to take American clients for decades as they considered the global tax regime and the aggressiveness of the American government with its citizens overseas too much of risk to their business. This has proven prescient and now Americans may find themselves 'global pariahs,' people that will have increasing difficulty preforming normal banking and trading transactions for legitimate businesses....
U.S. citizens may become global “pariahs” when a law forcing foreign banks to report their accounts takes effect, according to Switzerland’s oldest bank.

Americans “risk becoming pariahs of the global banking system through the fault of their own government,”....“The risks run by financial intermediaries promising to respect these rules are considerable,” said Hummler, who is also chairman of the Swiss Private Bankers Association. Banks “could be held liable for making a commitment” that a client isn’t subject to U.S. tax, he said.

St. Gallen-based Wegelin, founded in 1741, advised clients 16 months ago to sell U.S. assets because extended reporting requirements may saddle investors with tax obligations for themselves or their heirs. Wegelin, which is an unlimited partnership, has said that it can’t afford the risk of increased liabilities at time when American tax authorities are cracking down on international banks.
Form here. Why should a foreign firm hire Americans that come with all kinds of government baggage such as foreign taxing requirements, foreign banking problems and onerous reporting requirements if hiring nationals of other countries does not come with these requirements. How about the legitimate businessman that tries to export goods to other countries but cannot open bank accounts or finds it difficult to operate in these jurisdictions due to onerous US reporting requirements? Why bother?

The American government through all of its machinations has so overstepped it bounds that it will destroy opportunity for American citizens and businesses overseas. The arrogance of the American government is that they somehow think that these foreign countries or businesses HAVE to do business with the US but in actuality they do not. The USA is pursuing an aggressive path to irrelevance. The once great nation is becoming a nation of serfs where not just the citizens but everyone in the world is bound to serve the leviathan.


At 9:39 AM, Anonymous Anonymous said...

HSBC is slowly getting out of the US market. Just sold it's credit card group and has been out of the mortgage market for years.


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