Man is an animal suspended in webs of significance that he himself has spun...

Tuesday, April 21, 2015

Trotting Off to Tokyo

Tomorrow, I am hopping on a shinkansen and heading for Tokyo - one of my favorite cities.

I will be there for a few days and staying in the Ginza area.

So if there are any Flophouse readers who would like to get together Thursday or Friday, just let me know at

Doing Something about FATCA: Same Country Exception, Repeal, and Legal Action

Stephen Mopsick has reposted an article by Charles Bruce of American Citizens Abroad (ACA) proposing that the US "Treasury Department should promulgate rules permitting individuals to elect, if they wish, to have their local financial accounts, in effect, exempted from FATCA."

This proposal is not new and is known under different names: "Same Country Exception" or "Safe Harbour Exemption." Here is what the different Americans abroad organizations have to say about it:
American Citizens Abroad
"ACA, Inc. proposes a FATCA Same-Country Exception for accounts of US taxpayers resident abroad. If implemented, this would help alleviate the problem of financial services lock-out currently being experienced by Americans resident overseas. In a letter to the Treasury Department (Oct. 2013), ACA, Inc. has asked that this rule be applied for bank accounts held by American citizens in their country of residence."
Association of Americans Resident Overseas-Federation of American Women's Clubs Overseas
"Short of repeal, the same country exception, also called “safe harbor” in Washington, has been AARO’s position concerning FATCA. The idea is that we are bona fide residents of another country than the US and the accounts in that country are our domestic accounts. We would like the US to consider them as domestic accounts and not foreign accounts. To do this would require regulatory change in Washington, which, given the frigid relationship alluded to before, will not happen without congressional mandate. It would also require the banks where we live to agree to it.
Democrats Abroad:
"When a safe harbor exemption is applied to FATCA, the law would treat the financial accounts of Americans abroad in their country of residence the same way as it treats the US accounts of Americans residing in the US. In brief, foreign financial institutions would be exempt from filing FATCA reports on the accounts of US-tax compliant Americans residing legally in the same country. A FATCA safe harbor exemption would only exempt accounts held in the country in which the account holder is legally resident."
All of the Americans abroad organizations (with one exception) support it as the solution most likely to be accepted and implemented by the US government.  As much as Americans abroad would like to see FATCA disappear, these organizations argue that this is not realistic and that FATCA won't be going away any time soon.   That is the consensus and, separately or together, all of them have lobbied Washington for several years now in support of this idea.  

There is one organization that is taking a different stance and that is Republicans Overseas.  They want to repeal FATCA and the Republican National Committee passed a resolution in 2014 to that effect.  
"RESOLVED, The Republican National Committee hereby presents this Resolution to each Member of Congress and urges the U.S. Congress to repeal FATCA, to defend the livelihood and increase the competitiveness of Americans overseas, to remove inappropriate invasions of Americans citizens’ privacy, and to allow those U.S. citizens who renounced their citizenship due to FATCA to regain their U.S. citizenship..."
The Republicans have also launched a lawsuit - FATCA Legal Action - against FATCA (Flophouse post here).  They say that FATCA is not only detrimental to Americans abroad but it also violates their consitutional rights.   

US citizens living outside the United States, these are the proposals, actions, initiatives on the table right now. This is what these organizations are asking (or fighting) the US government for on your behalf and in your name -  "We represent the interests of the 7 million Americans abroad...."  That means YOU and YOUR interests.

I urge you to take a few minutes to follow the links above with an open mind - please don't let preconceived notions about "women's clubs",  "Republicans', or "Democrats" get in the way.  

Read each organization's proposal carefully so that you understand what they mean by "Same Country Exception", "Safe Harbor", "Repeal FATCA" and "FATCA Legal Action". If there is something you don't understand, ask.  If there is something you don't agree with, say so.     

And once you have done your due diligence and made up your mind, there is one last question to ask:  
What can I do to help?

Monday, April 20, 2015

A New American Emigrant Tells His Story

Colm Fitzgerald's article Why I left the US to Seek My American Dream in Hungary is a look into the mind of a recent US emigrant.

It's a thoughtful piece with no bitterness or anger that I could detect.  Nor was leaving the US something that he decided to do one day on a whim.  He and his spouse weighed the pros and cons and made their decision.  And he's very honest about his ambivalence now: "Every day since arriving here in Hungary I’ve questioned my decision."

Why did Fitzgerald and his wife leave the United States for Hungary?  To find the American Dream, he says.  And what does he mean by that?

Property:  He and wife dream of owning a home and land but it’s expensive in California and they are not willing to go into debt to finance that dream. “However, the idea of working for 30 years to pay thousands of dollars a month for a home sounded like a prison sentence to me. I’ve seen firsthand how a family’s whole world falls apart when someone can no longer pay that crippling mortgage.”

Independence:  Owning property outright (no debt) means taking back some control over their lives.  It is protection against larger impersonal forces moving in the world.   Having a piece of land, he says, means having “ a place we could grow our own food, raise animals and try our best to lead a more grounded lifestyle. To be independent of worldwide financial markets, politics and a system that fails us in favor of corporate profits at every turn.”

These are two dreams with a long and noble pedigree in North American history.  How were my French ancestors enticed into going to Canada in the 17th century?  Land.   They were given land they could own outright and farm.  As for self-sufficiency, that ideal runs through American literature from the books of  Laura Ingalls Wilder to the essays of  Henry David Thoreau.

Fitzgerald is not saying that he can't have these things in the United States;  he's saying that the price he is being asked to pay is too high, and the risks are too great.  Working for a corporation to reimburse the expensive mortgage on a piece of land isn't freedom, it's just another form of slavery.

Hungary, however, just might be a place where flexible work, affordable land, and independence can be had on better terms.  Fitzgerald has cast himself on that distant shore with the one thing all migrants all over the world share:  hope.

Saturday, April 18, 2015

Nakanoshima Park

It was sunny and warm and not too humid today in Osaka. It would have been a crime against nature to stay inside.

So forget the pile of dirty laundry, ignore the crumbs on the living room floor, and pay no mind whatsoever to the dirty bathtub.  Any guilt I might have felt was cast off as I recalled the immortal words of Ed Ricketts:
We must remember three things: 
Number one and first in importance, we must have as much fun as we can with what we have. 
Number two, we must eat as well as we can, because if we don't we won't have the health and strength to have as much fun as we might. 
And number three and third in importance, we must keep the house reasonably in order, wash the dishes and such things.  But we will not let the last interfere with the other two. 
Once I had my priorities in the right order, we walked up to Nakanoshima Park-  one of the most pleasant urban parks I have ever had the pleasure to see.  I strolled through it a month or so ago when the weather was ugly, the trees had no leaves, and the rose canes were cut down to mere stubs.

What a difference a few short weeks makes. Here is the park in all its exuberant post-sakura spring glory.

Friday, April 17, 2015

Bi-cultural Couples: Conflict, Culture and Character

One of the hardest parts of a bi-cultural marriage is determining if a conflict is rooted in culture or character. 

Culture is simply one variable among others that make up a person’s behavior, beliefs, and personality; and yet, it’s the part of our identity that informs to a very large extent how we see the world.  The cultural seas that we swam in in our formative years taught us what it meant to be a Good Spouse, a Good Parent, and an upstanding member of the community.  For all of the multi-cultural training we may have had as part of our education, many of us still didn’t truly understand that there were other grasshoppers in other fields.  It was only after we went out into the world that we learned the hard way that our way is just one of many ways of being all those things.

Or we can learn this when the grasshopper comes down the stairs in the morning and pours us a cup of coffee.    Some bi-cultural couples are hyperconscious of cultural difference and are quick to pull the culture card to explain just about every conflict.  It’s because he’s French or she’s Japanese and that’s just what they’re like.  In others there is a deliberate attempt at indifference:  a refusal to see the person as anything other than a unique individual whose cultural origins are simply irrelevant in the context of the marriage.
Both of these strategies are dangerous.  Treating a spouse as if he or she were an Exotic Beast is to turn that person into a caricature of Frenchness or Japaneseness and makes him both a stereotype and a second-class citizen in his own home.  But going to the other extreme, treating differences as irrelevant and unimportant, is not necessarily the neutral, egalitarian act it is purported to be.  On the contrary, it can be an insidious indirect way of imposing the one spouse’s culture (usually the native citizen’s) in the family and keeping one spouse comfortable at the expense of the other.  It can mean never allowing the other culture to be alive and present in a person in the very place (home) where both spouses should have an equal right to express who they are.

Avoiding both extremes is very difficult, especially when there is a serious conflict over something that matters so much that it provokes strong emotions and visceral judgements.  How could you do that?  What’s wrong with you? That’s not the way a Good Spouse or a Good Parent behaves.    

 A very good portrait of a bi-cultural couple in conflict can be found in the novel Native Speaker by Chang Rae Mae.  In the book Henry (Korean/American) and Lelia (American) come very close to divorce, and one reason is cultural difference.

In the book there is one particular conflict that illustrates these strategies for dealing with cultural difference in a marriage.  It begins when Lelia asks Henry to tell her about the Korean housekeeper who raised him.    Lelia is very upset to find out that her spouse knows nothing whatsoever about this woman; not even her name. 

Listen to Henry’s interior monologue:   “I don’t blame her.  Americans live on a first-name basis.  She didn’t understand that there weren’t moments in our language – the rigorous regimental one of family and servants-when the woman’s name could have naturally come out.  Or why it wasn’t important.” 

Henry excuses his wife’s reaction by generalizing about her culture and turning her into a living stereotype.  It’s not her fault – it’s is her culture and her ignorance which explain her behavior and feelings.   Both of these things may be true to some extent, and yet the generalization - It’s because she is an American - is condescending.   Furthermore, Henry has an explanation which he does not share with her.

Lelia tries to express why it bothers her, and it is not at all what Henry thinks it is. 

“I just wonder, that’s all.  This woman has given twenty years of her life to you and your father and it still seems like she could be anyone to you.  It doesn’t seem to matter who she is.  Right?”
“And it scares me,” she said.  “I just think about you and me.  What I am…”

On her side, Lelia is oblivious to her spouse’s home culture.  Even though she has met his father and the housekeeper, and knows that Henry is bi-lingual/bi-cultural, it does not occur to her at all that culture may have something to do with why Henry doesn’t know the housekeeper’s name.  Instead, the issue is one of individual character - the kind of man her husband is.  And a man who does not know the name of the woman who cared for him as a child is not a Good Person, and is potentially not a Good Spouse.

Is there a middle road a bi-cultural couple can take that avoids being hyperconscious of culture on one hand and dismissing it as irrelevant on the other?  I’ve thought about this for years and I haven’t come up with a satisfactory solution for myself, much less one I can offer to you.  Something tells me that we have all been “culture is everything/culture is nothing” at one time or another in our bi-cultural marriages. Especially those of us who have been living with our grasshoppers for many years and assume that, through years of trial and error, we’ve got them – their characters, cultures and languages - all figured out.

Maybe an answer, or at least another strategy, can be found in examining more attentively our assumptions about ourselves and the men and women with whom we share our lives.  Why do I think doing this makes me a Good Parent or a Good Spouse?  Why do I get so angry or disturbed when my spouse says or does something that does not conform to my standards for what is Good?

We could do worse, and learn something at the same time, if we stopped assuming and started asking.  Even after 20 years of marriage, we might be genuinely surprised by the answers.

Monday, April 13, 2015

Flophouse Citizenship and International Migration Reading List

Time for another update of the Flophouse citizenship/migration reading list. New books are in green. I highly recommend the titles below - read them and you will never look at citizenship or migration the same way again. All the underlined titles take you directly to the book on Amazon (US). I would really appreciate suggestions for other titles that might be of interest. I promise to read and add them to the list if I think they are good.

Military Migrants: Fighting for YOUR Country (2012) by Vron Ware.  In the first decade of the 21st century the British army, faced with deployments in Irak and Afghanistan, could not recruit enough soldiers locally.  So they turned to the young men and women of Commonwealth countries like Fiji and South Africa.  While these soldier/migrants served with UK citizens and swore the same oath to the Queen, they were still immigrants; not citizens.  A fascinating story that raises questions about the link between citizenship and service to a country. I highly recommend this one.

Return:  Nationalizing Transnational Mobility in Asia (2013) edited by Xiang Biao, Brenda S.A. Yeoh and Mika Toyota.  Some excellent essays in this collection about  Japanese Brazilians, the Korean Chinese and their relationship to South Korea, Cambodians and the US deportation machine, and the regulation of circular migration between Malaysia and Indonesia.

If This is Your Land, Where Are Your Stories? (2010) by J. Edward Chamberlin.  This is a hard book to describe.  It's about stories - the ones we tell about ourselves, our people, and how we came to be here in this land (and not someplace else).   And the central question for me in this book is: how do we work through our differences when we have different myths, histories, narratives and memories about the very same place?

Global Marriage: Cross-Border Marriage Migration in Global Context (2010) by Dr. Lucy Williams.  Outstanding look at cross-border marriages from a global perspective.  Williams takes on the myths, stereotypes about foreign brides (and grooms) and counters them with solid research. A refreshing antidote to the many silly things said about those "marriage migrants."

The Scramble for Citizens: Dual Nationality and State Competition for Immigrants (2013) by David Cook-Martin.  A fine book that looks at migration from Spain and Italy to Argentina in one era and the reverse migration from Argentina back to Spain and Italy of those immigrants' descendants in another.  The author does a fine job of showing how it is almost impossible for a state to make (and make stick) immigration/emigration and citizenship law unilaterally.  There is a larger context with sending and receiving states competing for the productive power and loyalty of immigants and emigrants.

Democracy and the Foreigner (2003) by Bonnie Honig.  Great read.  Honig takes the idea of "the foreigner" as a vexing issue to be solved through assimilation or rejection and turns it around.  Are there circumstances when the stranger is not a problem at all, but rather a solution to what ails a community?

Migration and the Great Recession:  the Transatlantic Experience (2011) edited by Demetrios Papademetriou et al.  If you were wondering how the economic crisis in the first decade of the 21st century had an impact on migration, this book of essays from the Migration Policy Institute is good place to begin.  Data from the U.S., U.K., Spain, Portugal, Ireland, Sweden and Germany.

Anthropology and Migration: Essays on Transnationalism, Ethnicity, and Identity (2003) by Caroline Brettell. An anthropologist looks at migration, transnationalism, and assimilation/integration through a population she knows well: the Portuguese diaspora. (Flophouse review here.)

Moving Matters: Paths of Serial Migration (2013) by Susan Ossman. .A look into the minds of "serial migrants." Those who immigrate once (like all other migrants) and then do something that shatters the standard immigrant tale - they move on. (Flophouse review here.)

International Migration in the Age of Crisis and Globalization (2010) by Andres Solimano. The author is ambitious and confronts some of the most difficult topics around migration:  Why is International Migration Such a Contentious Issue?  Are Goods and Capital More Important than People?  Don't Always 'Blame' the North, and so on.

The Citizen and the Alien:  Dilemmas of Contemporary Membership (2006) by Linda Bosniak. Refreshing take on the dilemmas of citizenship and democratic ideals.  Who is included/excluded and on what basis?  The problem of democracy and the legal permanent resident. Complex questions with no easy answers.

A Nation of Emigrants:  How Mexico Manages Its Migration by David Fitzgerald (2009)  The internal American battle over immigration from Latin America is a very public debate but it's only half the story.  Mexico, the U.S.'s southern neighbor and a major sending country, has made and is still making policy to manage its emigration and its emigrants.  This is an extraordinary book and there is much to be learned from Mexico's efforts and policies - even when they have failed.

The Sovereign Citizen:  Denaturalization and the Origins of the American Republic (2013) by Patrick Weil  Really superb book.  Excellent research into the un-making of American citizens in the 20th century.  

Citizenship and Those Who Leave:  The Politics of Emigration and Expatriation by Nancy L. Green and Francois Weil (2007)  I contend that you cannot talk about immigration without also discussing emigration.  A fine work - excellent chapters on how states (UK, Holland, U.S., France and others) have tried to manage emigration.

Citizenship and Immigration by Christian Joppke (2010) This one covers a wide variety of old and new ideas about citizenship.  A good place to begin for someone who is just delving into how immigration/emigration and citizenship are entwined. Joppke refutes the idea of the decline of citizenship - an argument worth reading..

International Migration and the Globalization of Domestic Politics edited by Rey Koslowski.  Some very good insights into how international migration and diaspora politics affect politics back in the home country.

Immigration and Citizenship in Japan by Erin Aeran Chung (2010) Excellent book about Japan as a country of immigration. "Japan is currently the only advanced industrial democracy with a fourth-generation immigrant problem." Chung tells the story of how this came about and the impact this has had on modern Japanese citizenship law.

Rights and Duties of Dual Nationals:  Evolution and Prospects edited by David A. Martin and Kay Hailbronner (2003)  Fine set of articles on dual citizenship and such things as military service, extradition, political rights (Peter Spiro), denationalization and many others.  Pricey but worth every penny.

International Migration and Citizenship Today by Niklaus Steiner (2009).  A very fine book on the political, economic and cultural impact of immigration.  He frames the discussion around two essential questions:  What Criteria to Admit Migrants?  and What Criteria to Grant Citizenship?

Citizenship Today: Global Perspectives and Practices edited by T. Alexander Aleinikoff and Douglas Klusmeyer (2001).  This was one of the best books I read on the topic of citizenship with essays by Patrick Weil, Karen Knop and Richard T. Ford, among many others.   I particularly enjoyed Ford's contribution called "City-States and Citizenship" which was, for me, a real revelation.

States without Nations:  Citizenship for Mortals by Jacqueline Stevens (2009) A strong critique of birthright citizenship in all forms and a call for citizenship based on residency.  

The Perils of Belonging: Authochthony, Citizenship, and Exclusion in Africa and Europe by Peter Geschier (2009).  Outstanding read.  States make citizens and states can also "unmake" them.  Nativism and the never-ending debate over who really "belongs."

The Politics of Citizenship in Europe by Marc Morje Howard (2009).  A really fine study of the citizenship policies of the oldest member-states of the EU.  Read this book to grasp how citizenship laws have changed over time and the reasons why.

The Future Governance of Citizenship by Dora Kostakopoulou ((2008).  Good overview of the current citizenship models and a proposal for an "anational" citizenship framework.

Beyond Citizenship:  American Identity After Globalization by Peter Spiro (2008).  Excellent book that examines how globalization has changed the value of citizenship overall and American citizenship in particular.  Very thoughtful.  Very well-written.

Qu'est-ce qu'un Fran├žais? by Patrick Weil (2002).  Mr. Weil spent over 8 years in the archives researching this book and it is fascinating.  France has been something of a test lab for just about every combination of jus soli and jus sanguinis citizenship possible.  Everything has been tried and tried again.  I read the book in French but it is also available in the usual places in English.

Gender and International Migration in Europe by Eleonore Kofman, Annie Phizacklea, Parvati Raghuram and Rosemary Sales (2000).  If you are looking for some empirical evidence (as I was) for how migration, immigration policy and citizenship rights have different outcomes and impacts for women, this is a good place to start.

The Birthright Lottery:  Citizenship and Global Inequality by Ayelet Shacher (2009) An attack on both jus soli and jus sanguinis methods of transmitting citizenship.  Fascinating argument.

Aliens in Medieval Law:  the Origins of Modern Citizenship by Keechang Kim ((2000).  I've been meaning to write a post about this book since it has a very original take on the historical roots of modern citizenship.  I recommend it highly. 

Human Rights or Citizenship? by Paulina Tambakaki (2010)  Interesting ideas about how traditional models of citizenship and  human rights legislation are in conflict.

Let Them In:  the Case for Open Borders by Jason L. Riley (2008)  The author makes a very radical argument for simply opening the doors and letting people move where they wish.

For info I have created a Citizenship and Migration book list on Goodread's Listopia here.  Good place to read reviews and find quotations from the above books.

Friday, April 10, 2015

FATCA/CRS: Promises, Promises

These days countries all around the world are agreeing to Automatic Information Exchange systems to share taxpayer information with each other.   The United States kick-started the trend with FATCA (the Foreign Account Tax Compliance Act), and early last year the OECD unveiled the CRS (Common Reporting Standard).  

No nation-state gives up sovereignty unless there is a perceived gain. The larger context, and the way Automatic Information Exchange has been sold to electorates, is the worldwide War on Tax Evasion.
It's a simple message that resonates with voters everywhere:  If we sign up for these systems, politicians promise, we will catch the traitorous tax-evading 1% ,  Not only will that bring in lots and lots of cash, but we will have struck a mighty blow on behalf of justice and fairness.  Who could possibly argue with that? (Citizens who have something to hide is the usual response.)

People should know better than to believe the promises of politicians.  George Orwell put it beautifully when he said,  "Political language... is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind."

So where is the wind?  The fact that the information to be exchanged under FATCA and the CRS is not about taxes owed, it's about chunks of money sitting out there in the world with names and nationalities attached to them.  If X has 50,000 Euros sitting in an account in Y country, it does not automatically mean that he or she owes taxes on that money, or that the account was not reported to the relevant authorities.

The CRS asks for the following information:  Name, address, taxpayer identification number, date and place of birth, account numbers, account balances, the total gross amount of interest, dividends or other income, and mortgage payments.

There is no field in CRS (or FATCA) that says, "Tax compliant/Not tax compliant."  From these raw data it is simply not possible to draw a straight line from an existing account to a tax evader.  The information provided must be checked against tax records, and double-checked with the individual's citizenship and residency records to determine if the person really is eligible for an audit by a country's tax authorities.

The exchange of information by itself is no guarantee that tax money will be flowing like water into a country's coffers from abroad. It is perfectly possible that a country will receive information from another country, and, after investigation,  discover that most of the high-value accounts have (with the help of international tax attorneys) been reported and all taxes paid, and the only accounts left on the table are ones that are low-value and won't yield much revenue.

Everyone should understand this:  countries have no idea right now how many reportable accounts are out there, how much money is in them, and how much of that money is taxable.   They are making promises based on guesses.

But there other ways that this information exchange systems can be used that have nothing to do with tax evasion in a globalized world.   Two that come to mind are:

Tracking migrants and controlling global mobility:  In principle, with a unique international identification number, people become trackable wherever they or their money go in the world.  A US Person moves from Sacramento, California to Shanghai, China to  Paris, France and every time he opens a bank account, there he is with a local address.  That's not a bug; it's a feature.

Many countries like the US do not have a reliable means of tracking where their citizens go, and what they do, when they leave the home country.  FATCA/CRS serves as a kind of extraterritorial census and a way for governments to track emigrants.  Or where they suspect that some homeland citizens have connections to other countries (not always ones they like), these agreements give governments yet another way to keep an eye on them.  With that in mind, it might be very interesting for the French government to know that someone in France has a house and a mortgage in  Algeria.  Or that a citizen has authority over the accounts of an NGO in Latin America or Africa.

Taxing the diaspora:  Most countries in the world have residence-based tax systems.  What that means is that only residents of their country get chased for taxes either in that country itself,or passive or active income earned abroad.  The US is unique in that it has a citizenship-based tax system which means a US citizen is taxed on his income wherever he lives. If he lives in Japan, he must file tax returns locally and with the United States on whatever he made in both countries.

There are countries that dream of doing the same thing.  Imagine all those French in California.  Or all the Chinese in Canada.  Or the Japanese communities in France. So far, citizenship-based taxation US-style has been something of a bust because there has never been a reliable system for tracking Americans abroad, much less what they were doing or earning.

So we could look at FATCA/CRS as an experiment:  Has the US finally found an efficient enforcement mechanism for their citizenship-based tax system?

International migrants everywhere should be very concerned if the answer turns out to be "yes".  Because if CBT works, then there is every incentive for states to say to their diasporas, "You may have emigrated, but as long as we claim you, you will share your fortune by paying taxes to the home country in addition to the ones you pay locally."

Everyone is shouting so loudly about tax evasion that it's hard to think clearly over the din.  So many vague promises on one hand, and so little evidence on the other.  One way to cut through the self-righteous rhetoric is to ask some simple questions:   What are the success criteria for an Automatic Information Exchange system?  How much tax money will each country recover if FATCA and CRS "work"?  Not back-of-the-envelope guesstimates, but hard data and real numbers backed by serious studies.

So, is it the money or the information that make FATCA and CRS attractive?


Politicians' promises of  money, money, money may be so much hot air; but the information itself is solid gold.