Thread by @MattWelch

One of the first questions that should have been asked, but wasn't, when the Treasury Dept. last month said it had a great new scheme for the IRS to collect $700 billion the next decade, is: What happened to Obama's 2009 scheme to collect $210 billion? reason.com/2021/06/09/bid…

Answer, 5 months later: Silicon Valley/Chamber o' Commerce wasn't having most of it:

"The Obama administration has shelved a plan to raise more than $200 billion in new taxes on multinational companies following a blitz of complaints from businesses."

wsj.com/articles/SB125…

That left the crackdown on individuals, known as the Foreign Account Tax Compliant Act. Or FATCA, because Washington is run by Very Serious People.

FATCA forces foreign banks to rat out information on American customers to the IRS. No, really: en.wikipedia.org/wiki/Foreign_A…

Close your eyes and guess how foreign banks might respond to an order from the IRS to either divulge Americans' bank info or cough up 30% of the relevant accounts. Oh yeah, they started canceling U.S. accounts. Immediately. reason.com/2011/12/28/stu…

But it wasn't just the narc-ification of banks, it was the INCREDIBLY burdensome new financial reporting requirements imposed on any Yank with $10,000 parked abroad. Do it wrong, and they can fine you $100,000, and even send you to prison. This, too, had predictable results.

1) Panicked about punishment, expats (many of whom are dual citizens who've never lived or worked in America), "voluntarily" paid fines on belated tax filings they never previously knew they had to file, even though those filings revealed no tax liability. reason.com/2012/07/17/the…

2) Bewildered, record numbers of U.S. citizens began turning in their passports rather than deal with the annual proctology exam: reason.com/2012/10/22/ano…

And yes, those citizenship-revocations continue to set records; the pandemic just slowed the paperwork awhile: washingtonpost.com/business/us-ex…

Now, remember Obama's $210 billion promise of newly discovered tax revenue back in May 2009? FATCA, the only thing that came out of that, was supposed to produce $8.7 billion, or $870 million per year. Not much, but at least some. Did it deliver? Nope!

“The actual amount of tax collected by FATCA is statistically insignificant....FATCA has probably generated $300 million extra tax revenue a year that otherwise would go unreported…[though] this figure will continue to decrease." papers.ssrn.com/sol3/papers.cf…

See also this Inspector General report:
treasury.gov/tigta/auditrep…
And this GAO assessment:
gao.gov/products/gao-1…

So what is Biden proposing in his Obama-on-steroids alleged closing of the alleged "tax gap"? Well, read it yourself, though make sure to note the title: home.treasury.gov/system/files/1…

The gist: Onerous 3rd-party financial reporting is no longer just for expats, and no longer just for assets. It's a “comprehensive financial account reporting regime” to “report gross inflows and outflows on all business and personal accounts." PayPal, crypto, you name it.

Is this a good place to mention that the brazen, unilateral requirements the U.S. imposes on global banks it refuses to reciprocate when, say, the EU wants data about tax havens in Florida and Joe Biden's Delaware? reason.com/2016/04/04/pan…

Anyhoo, Janet Yellen wants to reassure you that: "For already compliant taxpayers, the only effect of this regime is to provide easy access to summary information on financial accounts and to decrease the likelihood of costly 'no fault' examinations." Nothing to hide, no problem!

My conclusion: At some point, the reality of Washington governance, and the coverage thereof, requires a reassessment of the idea that invasive new financial-snooping schemes sold with facially unattainable revenue promises are in fact "well-intentioned."

And if you want to see how badly the proving ground of FATCA has already messed with the lives of people not rich enough to afford stress-free compliance, read & follow the links here: democratsabroad.org/carmelan/demsa…

Folks, hold onto your financial privacy. They're coming for every institution and platform you use.

THE END???

reason.com/2021/06/09/bid…