FATCA Is Not the Answer

On February 26, 2024, Tax Notes Federal published an article entitled “Taxing Fat Cats Abroad.”

The article defended the Foreign Account Tax Compliance Act (FATCA) as an “automatic exchange of information used to track down and tax accounts held by wealthy U.S. citizens living abroad.”

The article contained many errors and misinterpretations.

SEAT co-founders John Richardson, Karen Alpert, and Laura Snyder submitted a response to the article, entitled “FATCA Is Not the Answer.”

Their response, published on March 18, 2024, can be accessed via SSRN at this link.

 

The response explains:

1. The considerable differences between FATCA and CRS. They include FATCA’s lack of reciprocity and the United States’ refusal to join CRS;

2. The inequalities inherent in the U.S. tax system with respect to Americans living outside the United States and their discriminatory treatment;

3. The irrelevance of FATCA with respect to Farhy v. Commissioner and Bittner v. United States;

4. The unjust stigmatization of Farhy, Bittner, and all Americans living outside the United States;

5. Inconsistencies between the article’s defense of citizenship-based taxation and the “single tax principle” advocated by professor Reuven Avi-Yonah;

6. The failure of the article, in its theorectical defense of citizenship-based taxation, to contend with the real system in place today and its myriad intractable problems;

7. The lack of any connection between taxation and voting rights;

8. The importance of the 14th Amendment for the equal protection of the rights of Americans living outside the United States; and

9. That the 16th Amendment is not — and it should not be used as — a license to channel violations of constitutional and human rights through the tax code.

3 thoughts on “FATCA Is Not the Answer

  1. Bloody, well-done article. Indeed, voting discrimination was not prohibited until 1965, when the Voting Rights Act was passed. A large segment of the population had no voice in taxation for a very long time.

    Then again, disenfranchisement is the cornerstone of US law and history. It is unrelenting.

    Calling out the tax scholars is wonderful. They should have their tenureship yanked for misleading the public.

  2. A major factor on why US slavery lasted so long is because academia were its biggest boosters. Harvard, for example, penned articles on why slavery was a good thing. It is no surprise we have 21st century academics tripping over themselves to sustain tax slavery. The perverse reasoning brings in money towards scholarship, authorship, invites to comment on tax law changes, and invites to congressional hearings. The higher the profile in advancing evil diaspora tax policy, the better.

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