It is more complicated than tax avoidance

I appeared on Swiss television last night on the RTS program Mise au Point. Click the link to watch.
www.rts.ch/emissions/mise-au-point/5131227-mise-au-point.html  

The interview discussed the US FATCA banking legislation and the reasons so many dual citizens are renouncing. The segment begins about 09:53 into the program and runs through 22:17. 


It starts with my cancelled passport and my segment is in English--guess they couldn't take my French accent or want to have to type subtitles. They did show my novel with the cover from my housemate.


For those in the US who don't understand the problem with FATCA here's an analogy. Just substitute US for Massachusetts and any other country for Iowa and Colorado.


You are born in Massachusetts and at five months, you move to Iowa where you live the rest of your life. You never set foot in Massachusetts again or maybe visit a friend every few years or go through Logan Airport on your way to someplace else.


Every cent you earn your entire life is subject to Massachusetts tax because you were born there.


You and your spouse buy a house with a down payment from the sale of his folks' house who lived and died in Colorado and never set foot in Massachusetts or worked for a Massachusetts company. The rest of the house was paid for by salaries earned in Iowa. However, when you sell that house, you pay taxes on it in Iowa and in Massachusetts, because you were born there.


You lose your job in Iowa which was with a company headquartered in Iowa and get unemployment from Iowa. You pay taxes on your unemployment in Massachusetts because you were born there.


You collect social security and a pension earned in Iowa from an Iowa company with no Massachusetts connection. You must pay taxes on both because you were born in Massachusetts.

It gets worse.

Massachusetts thinks there are tax evaders in Iowa so they force all financial institutions to report on the earnings and accounts of people born in Massachusetts. Stupidly, the Iowa banks cave, but the cost of reporting is too high, so they close your account. Or if they allow you to keep it open, you can make no investments or get a loan. Thus when you want to buy a new house, you can't get a mortgage because you were born in Massachusetts.

So now you are without the ability to do normal banking transactions, so you think, I'll open a bank account in Massachusetts. You can't because even though you were born in Massachusetts, you no longer live there and it is forbidden to open an account. 

I happily pay tax in Switzerland. It is the reason I travel on good roads. I know the next generation who will be my doctors, dentists and neighbours go to good schools. My taxes help make this country a functioning (not perfect) society for almost all its citizens. Those taxes are my dues to live in a civilized society. 

I did not renounce so I could avoid US taxes, although not being doubled tax on a majority of my income, not living in fear of heavy fines if I don't do something right and not paying up to 5% of my income to a specialist to keep me out of US tax trouble is a fringe benefit. I renounced mainly so I could bank as a normal person has a right to and which was denied me by the stupidity of FATCA.

My lovely husband goes into more technical detail of FATCA  The End of American Ex-Pat Influence in the World Click on the link below

http://lovinglifeineurope.blogspot.ch/2013/09/the-end-of-american-ex-pat-influence-in.html