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The Grip Gets Tighter, IRS Finalizes FATCA; Creates Additional Barrier to the Flow of Capital

Categories: Business
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Published on: 2013/01/30

Foreign Account Tax Compliance Act

Edicts like FATCA serve as an indirect form of capital controls, as they effectively create significant barriers for capital to leave the US.

Read more at:

Weekly Update – The Grip Gets Tighter, IRS Finalizes FATCA – International Man.

Wording of the FATCA

Rich Taiwanese give up US Passports over FATCA (Taiwan News)

California’s 5 year RETROactive Tax (Business Insider)

New tax for Expats to fund Obamacare (Yahoo News Canada)

IRS website for FATCA

The grip continues to get tighter.

Last week the IRS finalized the widely unpopular FATCA regulations, a monstrosity of 544 pages.

 

Unpopular with everyone but the US government and the financial advisers who are set to profit from the stacks of paperwork that FATCA creates.

 

The final regulations include a step-by-step process for identifying US accounts, information reporting, and withholding by foreign financial institutions.

 

These costly regulations make the world a smaller place for Americans. Most foreign banks want nothing to do with American clients and it is no wonder why. The benefits do not outweigh the costs; any rational business owner would make the same decision.

 

Perhaps it is a desired effect.

 

Edicts like FATCA serve as an indirect form of capital controls, as they effectively create significant barriers for capital to leave the US.

 

We shouldn’t be surprised that broke governments everywhere are finding all sorts of dastardly creative ways to squeeze their citizens more and more.

 

Take California for example, which is seeking to hit businesses with an absurd retroactive tax going back 5 years.

 

 



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