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

Thursday, July 30, 2015

What's on the anti-FATCA Menu Today?

May I call your attention to an excellent summary of the various anti-FATCA initiatives being served by a restaurant near you?

In his post Goat Rodeo Roundup Deckard1138 notes that we've gone from empty plates to actually having a menu with choices.  
"The calm-before-the-storm waiting game of the last few years is now clearly giving way to frenzied activity and veritable verbal warfare across multiple organizations and web sites around the globe. The big-picture dots of this reality have not yet been fully connected into a single post and thread, so that’s why I’m starting this one." 
There are three main anti-FATCA initiatives:

  • Alliance for the Defence of Canadian Sovereignty (lawsuit filed against FATCA in Canada)
  • FATCA Legal Action (lawsuit filed against FATCA in the US)
  • Same Country Exception/Safe Harbour

Each one approaches FATCA very differently.   ADCS is about fighting FATCA outside the US and attacks the implementation of the law in the Canada saying that it is incompatible with the Charter Rights of Canadian citizens.  The FATCA Legal Action lawsuit was filed in the US and tackles FATCA from within the US arguing that FATCA deprives American citizens wherever they live of their rights under the US Constitution.

The third which is commonly referred to by the acronym SCE, is an effort to mitigate FATCA.  It asks for an exception for US Persons holding local (foreign to the US) bank accounts in the countries where they live and work. If these US Persons are both legal residents of another country AND tax conpliant with the US, then their accounts would not be reported to the US IRS.   This exception would leave FATCA itself essentially intact.

To complicate matters there is the issue of who the waiters are this evening.  Each one is touting his or her Special of the Day. But some customers don't care for what they think the waiters are wearing (Red or Blue or the cloak of anti-Americanism) and they definitely don't want what they order to be taken as a reflection of their ideological, political or personal views.  The uncivil polarized political landscape that characterizes the United States today is repugnant to many Americans abroad and they will resent being dragged into it.

That's what's on the menu and if Americans abroad/US Persons are a party of 7+ million people I'd say it's going to take some discussion before anyone is ready to order.

 As I look at it I try to remember that I am not what I eat, and that leaving the restaurant still starving is far worse than a mild case of indigestion.

Wednesday, July 22, 2015

The Big One

All human beings are players in the cosmic crap shoot of the universe. No place on this planet is perfectly safe. Nature will from time to time have her due. But we are survivors. We learn, we adapt and we go on.

Seismic Event (Flophouse post 2011)

Several friends passed along Kathryn Schulz's New Yorker article The Really Big One about the potential for a catastrophic earthquake in my home region and hometown of Seattle.  I was touched that people remembered that I had a connection to that part of the world.  

Yes, "The Pacific Northwest sits squarely within the Ring of Fire."  That this surprises people surprises me.   Sounds like there wasn't any mention of that fact in Sleepless in Seattle - the movie that finally put Seattle on the mental map of so many people around the world.  In 1989 when I left the US for the first time  I met people abroad who thought Seattle was in Canada, or that it had a climate similar to Alaska.  I actually benefited from that ignorance a time or two.  As I passed my CV around more than one French company I interviewed with thought that the University of Washington was some top-notch school in Washington, D.C. and wasn't I the catch?  

I have never seen Sleepless in Seattle but I have seen variations of this map that I found on the National Geographic website.  

http://education.nationalgeographic.com/encyclopedia/ring-fire/
The only bone I would pick with Schulz's article is that she makes it sound as through we had no idea that we were living in an earthquake zone. We knew very well. The first house I lived in as a child in Olympia had a cracked chimney held together by iron bands. Earthquake damage, they said - though perhaps that was just a story to impress an impressionable child. In 1965, The year I was born, there was a 6.7 that started at 8:29 on April 29 and lasted 45 seconds. At elementary school (early 1970's) we had drills and we all knew what to do if the ground began to shake. 

And it did. When I lived in Olympia and Seattle the earth moved, the windows rattled, the house swayed, the dogs barked. Not often, but often enough that when I moved to Japan for the first time and felt my first earthquake in Tokyo, it was a familiar (not novel) sensation.

As long back as I can remember we (the people of the US Pacific Northwest) have ALWAYS had stories about The Big One. Actually there were two scenarios: catastrophic earthquake/tsunami or volcano eruption/landslides. The latter actually happened when I was in high school: Mt. St. Helen's. What a day that was. I'm 50 and I still remember seeing that cloud of ash rising into the sky which later fell on our cars and our lawns.



The Big One stories were, as far as I know, only loosely based on science. It was more feeling, folk wisdom, and the conversations we had with each other as we looked out the window of our cars hurtling down Interstate-5 or 99.  "Wow.  How stupid can people be?  When the Big One comes they are so gonna get it..."  Many a time I would drive my mom's pickup truck on the Alaskan Way Viaduct through downtown Seattle and I'd look up at the old concrete above me and think, "Yep, that puppy is going to pancake one of these days.  Hope it's not today."

In 2009 the Washington State Department of Transportation put out this video, a simulation of what could happen to that viaduct in the event of a 7.0 seismic event and, yes, that's exactly what they said it would do:


Schulz does ask a good question at the end of her essay:  "How should a society respond to a looming crisis of uncertain timing but of catastrophic proportions?"

I would take the 'should' out of that sentence and replace it with 'could'.  Because there are as many answers to that question, mes amis, as there are human societies on this precious, but unpredictable, planet of ours.  

Friday, July 17, 2015

A Message from the Americans Abroad Caucus

Yesterday, representatives Carolyn B. Maloney (Democrat-New York) and Mike Honda (Democrat-California) issued a press release about their bill calling for the creation of a Commission on Americans Living Abroad.

H.R. 597 which was introduced in 2011/2012 would  "establish a commission to study how Federal laws and policies affect United States citizens living in foreign countries." In the 2015 press release they say: "to study the variety of ways federal policy fails those living outside the 50 states." (Italics are mine.)

Note the timing of the press release - just a few days after Republicans Overseas announced that the FATCA/FBAR Complaint and Motion for preliminary injunction has been filed in the U.S. District Court for the Southern District of Ohio at Dayton on behalf of 8.7 million overseas Americans.  Democrats Abroad shot back with their own statement condemning the lawsuit.

You can read all about it at the Isaac Brock Society:   The Bopp Suit Has Arrived.  You can also read my take on the lawsuit and my notes from Senator Mike Lee and superlawyer James Bopp, Jr.'s Paris visit back in October: A Chance to Turn the Tide.

According to Maloney and Honda's press release, this Commission on Americans Living Abroad, a 10-member bipartisan committee, would study and make recommendations on:
  • Federal financial reporting requirements for a US citizen living in a foreign country
  • Federal policies and requirements that affect an overseas citizen’s access to foreign and domestic financial institutions
  • Federal requirements for a spouse, child or another family member of a US citizen living abroad to become a US citizen
  • The ability of a US citizen living overseas to vote in Federal, State and local elections in the US, and the process by which they do so
  • The process by which a US citizen living abroad interacts with Federal programs like Social Security and Medicare
  • Methods to improve collaborations between US citizens abroad and Federal Agencies that oversee programs that serve them
I wrote about this proposed Commission in 2012 :   "Representative Carolyn B. Maloney of New York has put forward a very modest proposal for a commission that would start a dialogue between us. It would cost around 3 million dollars a year, a mere drop in the bucket compared to the overall federal budget - though I suppose if we asked a U.S. military contractor to cater it, it might cost quite a bit more than that. ACA and AARO are ready with some well researched material about how citizenship-based taxation and other homeland legislation effects us, and does no good whatsoever for the homeland."  

Good to see that it's back. 

Thursday, July 16, 2015

Some Thoughts about Categories and Sterotypes

Americans are....

Japan is....

France was....

Brazil will be...

All of these statements are followed (in English) by an adjective, a word that conveys a subjective quality.

Isn't it interesting that we fight (if they are nasty) and nod our heads (if they are nice) over those adjectives, but we don't pay much attention to the nouns in those sentences?  We take for granted that there is such a thing as nation-states and nationalities.  That somewhere out there in the world there is a place called "Brazil" and personages called "Brazilians"  who are reported to be singular by virtue of some combination of qualities that no other nation or people on this planet possesses.  Strangely enough, we do this even if we've never set foot on that soil, much less met an actual native.  A tad bit irrational, n'est-ce pas?

Or not.  It's useful to think of these things as categories - buckets into which we conceptually gather things that seem to go together and we label that bucket "Brazil", "France", "Japanese" and so on.  Actually the buckets are filled in two ways, not just one.  The related concepts of "France" and the "French" and the positive or negative stereotypes tied to them are nourished by the imaginations of the French themselves and by the imaginations of the non-French all over the world.  Not exactly a fair fight either - there are roughly 7 billion people in the world and only 66 million of them are French.

I am fascinated by these categories and how we mentally manipulate them for our own ends.  But my ideas are nothing compared to the work of cognitive scientists, people who think about how the human race thinks.  In Women, Fire and Dangerous Things the cognitive linguist George Lakoff has an outstanding overview of the different theories that attempt to answer these questions:
"What is reason?  How do we make sense of our experience?  What is a conceptual system and how is it organized?  Do all people use the same conceptual system?  If so, what is that system?  If not, what is there that is common to the way all human beings think?"
Categories, Lakoff says, figure prominently in all discussions about how we reason.  Human beings are hard-wired to put things into mental buckets and then manipulate, compare, contrast and label them.  It's innate and every person on this planet does it.  How, for example, could we think about or discuss "international migration" with others  if we didn't have categories like "citizen", "migrant" or "Japanese"?

Lakoff present two schools of thought about categories.  The traditional view says that these categories are mental constructs that are "independent of people, and defined by the characteristics of their members and not in terms of any characteristics of the human."  The mind and the body are separate.  Emotion is irrelevant to reasoning.  Reason itself is transcendental and there exists a "God's eye view of the world- a single correct way of understanding what is true and what is not true".  All human beings share that single understanding. .

More recent theories, and one in particular called prototype theory, argues differently and contends that "human categorization is essentially a matter of both human experience and imagination-of perception, motor activity, and culture on one hand, and of metaphor, metonymy and mental imagery on the other."  Which implies that there is no one right way to truth and understanding will vary according to a number of different variables.

Lakoff believes (and this is the main point of his book) that we organize and reason according to idealized cognitive models (ICMs) and our categories are what comes out of this method of  mental organization. An example he gives is that of the "week".  "Our model of the week is idealized.  Seven-day weeks do not exist objectively in nature.  They are created by human beings.  In fact, not all cultures have the same kind of weeks."  The idea of le weekend would not exist in a culture or country where the work week wasn't 5 continuous days followed by 2 days off.  Another example is the category called "bachelor".  This category can only be defined "with respect to an ICM in which there is a human society (typically monogamous) with marriage, and a typical marriageable age."

Taking a stab at it for myself, "citizen' as a category can only exist if there is an ICM based on membership in a nation-state which divides into sub-categories:  French, Japanese, American, Brazilian.  The idea of  "France", "US", "Japan" and "Brazil" are predicated upon an ICM of the "nation-state."

At the core of the new theories about categories are prototypes which means the Best Examples of the categories we accept as real and want to use.  An apple, for example, would be a fine prototype for the category "fruit".    Are there prototypes for other things like nations or nationalities?  I think so.

From the outside looking in, is it possible for us to think about ourselves or the Americans, Japanese or French in the world and not have in mind some sort of typical idealized representative of each one?  Is that where we derive our judgements and our adjectives?  We take the best example we know (actors, politicians, heroes or villains) magnify his/her useful qualities and then extrapolate them to an entire nation?  Maybe.  I know that I can't think of Britain without thinking of Winston Churchill or France without a mental image of Gerard Depardieu.

No nation, country, culture can define itself without reference to something outside itself.  For the category of "American" to exist, something out there (or within) must be defined as Out of Category (i.e. not American). If there were no other countries in the world "France" would have no meaning at all.

Acknowledging these things leads to a strange thought experiment:  imagining a world where we couldn't tack on an adjective at the end of Americans are/Japan is/ France was/Brazil will be because we will have changed our minds about this way of organizing our world, and we just don't need those categories anymore.

Wednesday, July 15, 2015

Operation Mosquito

Trust the Brockers to come up with something brilliant.

A few days ago the International Tax Bipartisan Tax Working Group Report was published. Many of us had high hopes for this report because public input was requested and Americans outside the United States responded.

In fact,  out of the 347 submissions concerning international taxation sent in response to the US Senate Finance Committee's call for public input on tax reform, nearly 75% came from Americans abroad.

But the final report didn't reflect that.  Instead it almost entirely focused on the tax issues of US multinational corporations.  Go figure.

However, at the end of the report the authors made an interesting recommendation:

"While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation
of individual Americans living overseas within the time-constraints placed on the working group,
the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns
articulated in the submissions moving forward."

Amen to that mes chers compatriotes.

So, how can we help this along?  How do we convey to them that we really REALLY want this on the agenda?

Call them.

That's right.  Operation Mosquito has been launched by the folks over at the Isaac Brock Society (hat tip to ShadowRaider for the idea) and it consists of picking up the phone and leaving the Senate Finance Committee a message that goes something like this:
“Hi, my name is ___, I’m a US citizen living in ___. I’d like to urge the Senate Finance Committee to overhaul the taxation of individual Americans living abroad, as soon as possible, as the committee indicated in a report it recently released. Could you please pass this message to the rest of the committee?”
Calgary411's post gives all the details.  There is a spreadsheet where you can sign up for a time you are available to call.  The short script above was drafted by Calgary but you are certainly free to  use your own words.

I've signed up and will be making a very early morning phone from Japan.  Please join us.  It's worth a shot,  Might even be cathartic.  Because we may be trivial and insignificant in Washington's eyes but that should not deter us from asserting ourselves.  The Dalai Lama was dead right when he said:

“If you think you are too small to make a difference, try sleeping with a mosquito.”

Summer Reading - Expat Novels

The upside to jet-lag (and I have it in spades) is that I get a lot of reading done. What else to do when one is sleepless in Osaka and it's 2 AM?

 Here are a few fiction titles I picked up in the last few months that were written by expats about expatriates.  If you happen to be sitting on the beach (lucky you) or preparing for your vacation (and the Japanese and French do much better in this regard than the poor American) perhaps there is something here you can upload to your Kindle or pack in your bags for when you need a rest from all the fun you'll be having.

Passion Fruit by Sandra Cuza.  A fun book that I enjoyed immensely.  An American couple heads for São Paulo, Brazil when the husband is expatriated there by his company.  It's a good life insofar as the package includes a good salary, nice house, servants and, of course, the pool.  Husband is thrilled to death because he gets to be a Big Shot in Brazil complete with cozy job and beautiful secretary/translator.  The wife, who had a fine job of her own back in the US, struggles to make a life for herself  in the new country.  Her suspicions about her husband and his secretary turn out to be true (and as a reader, it was kind of obvious to me early on that this was the case) and so they divorce and she goes back home which is not quite the end of the story.  She's fine and gets her HEA (happily ever after).   Her ex-husband?  Not so much...  A rollicking good read.

The World of Suzie Wong by Richard Mason.  This is a book (was later made into a movie) that was written in the late 1950's about a British expat artist in Hong Kong and his love affair with a Chinese prostitute.  I read the title and was going to pass on it, but I changed my mind and gave it a go.  Nicely written, good characters, fine dialogue.  I can see why it was a bestseller back before I was born.

Une Saison Japonaise by Nathalie Desormeaux.  This is a self-published novel by a Frenchwoman who was an expat herself in Asia.  It's set in the late 1970's (still in Japan boom period) and it's about a Frenchwoman who moves to Japan after her companion (the man she lives with) gets transferred there for work.  She's not thrilled about the move but l'homme de sa vie tells her that their relationship is over if she doesn't tag along.  She makes the best of a bad business - her French company asks her to audit the Japanese subsidiary in Tokyo so she has work, and she does speak some Japanese having studied it at university in France.  I enjoyed the book except for one thing:  here she is in Japan having been threatened by the love of her life (who pretty much takes himself out of the picture early own, leaving her to her own devices in a strange land)  and her inner monologue is filled with insecurity, fears of losing her man, and anger at accommodating him and his life plan at the expense of her own.  All of which makes her commentary about how unliberated the Japanese women she meets are, a bit hard to swallow.  She does get it together eventually (pulls up her Big Girl panties and deals) and finds that she just might like to stay in Japan after all.

That's it for now.  If any of you have expat novels to recommend (perhaps one you've written), please feel free to add them to this post in the comments section.  And maybe I'll start another reading lists with expat fiction titles.

Typhoon Nangka is on its way here.  Landfall in Japan is expected sometime on Thursday evening.  Looks like a big one.  Last typhoon I experienced was in Tokyo about 10 years ago and that was really something. For this one I'll have a great view from the 14th floor of my apartment building.  Or maybe I'll just sequester myself in the bathroom if it gets too scary.

Tuesday, July 14, 2015

Fear, Shame, and the Expat Memoir

I've made no secret of my general dissatisfaction with most expatriate memoirs.  Written in the first person, so many of them follow a formula that goes something like this:  naive but well-intentioned foreigner goes to live in a strange land where he/she meets the exotic Other, finds much to admire in the culture of the cute and quaint natives, learns their ways (and their language), integrates to the point where he/she becomes Almost X (almost American, almost French, almost Japanese, almost [insert country/culture here]) and then uses that insider knowledge to interpret that country/culture for the benefit of his compatriots and/or humanity.  Every expat a Kim, every expat experience a Hero's Journey.

I read many books about Americans and other Anglo-Saxons in France before and after I moved there in the late 1980's.  And when my life there turned out to be nothing like what I had imagined it would be, I spent years wondering what was wrong with me.

Because we seemed to have physically moved to the same geographical location but they seemed to be living in another world.

In their world there was always enough money, they lived in lovely houses in the South or plush apartments in Paris, their children were effortlessly bi-lingual, and the French were this adorable tribe with quaint and exotic customs that were an endless source of amusement (not to mention new material for books and articles). Misunderstandings, problems adapting, learning the language and the like were brushed off as mere bumps on the road. They made it sound so romantic. And I would finish some of these books feeling like a failure. Why am I so ambivalent? Why do I have these moments of loss and despair? Why am I having such a hard time when all of these other people seemed to have effortlessly segued into a fabulous life here?

It took me some time and a larger perspective to understand that these books are Disney-style fairy tales. Cinderella stories with happy endings written for Americans or Australians or Brits that describe France in a way that conforms to certain positives stereotypes of the French and bucolic myths about life here. People want to read (and will pay for) stories that feed their fantasies about selling everything, dropping out of the rat race, getting on an airplane with a backpack, and writing a great novel in a bistro in Paris or restoring a French farmhouse in Normandy.

The stories we long-term residents of foreign shores share with each other bear no resemblance to the fantasies we tell or sell publicly.  The True Tales are those we keep close to our chests to be whispered down wells at midnight, or we let slip only after imbibing copious amount of alcohol in the presence of those with whom we feel safe.

And that's a pity in so many ways.

Because if we look under and around the Fairy Tales we will find incredible complex stories about courageous human beings. These are people have experienced loss, grief, poverty, addiction and even madness abroad  - a whole host of rich experiences that are difficult to talk about: broken relationships, illness, business failure, bankruptcy, mental institutions and even prisons. All hundreds, or sometimes thousands, of miles away from the place they used to call "home."

So why don't we write about these things?  That's a complicated question that deserves some deep thinking. The best ones do usually in an oblique way and if you are a migrant/expat yourself you can read between the lines.  But most don't go anywhere near an exposure of the self that would take the reader out of Disneyland and into the flawed world of real human beings.  Which means that those books will never be more than the equivalent of Romance novels however well-written some of them are.

What do we need to push past to write honest and human expat memoirs?  What all great writers have to push past:  fear and shame.

Fear underlies much of our self-censorship.  Some of that fear is justified.  A book about living in France or Japan or any other country that does not follow the formula which extols the virtues of the adopted country and its native citizens might not sell so well.  Worse, it could expose the author to all kinds of criticism - that he or she doesn't really understand the country and its people, that he or she is clearly not well integrated, that he or she is whining (and the last is usually followed by "And if he/she doesn't like it here, then he should just go home.")  And in the very worst case it might cause pain to family, marital problems and even dicey situations with the authorities.  It has not escaped my notice that expatriate authors who write nice safe things about the country they live in get rewarded for being Good Boys and Girls.  Those who are critical and honest get crucified.

Shame is the other impediment.  That sense that we aren't good enough and that we must hide our flaws and our mistakes.  Perhaps we compare ourselves to others and think that we are "less than" in comparison.  The marriage didn't work out, the spouse is abusive, the children are not bi-lingual, we can speak but can't read or write the local language, we have ongoing financial problems, our advanced degrees turned out to be useless where we landed, we drank, gained weight, offended people, embarrassed ourselves, were laughed at, got fired, fought with our in-laws, alienated friends, and suffered many indignities large and small in silence over the years or lost our tempers (and our minds) and did things we deeply regret.

This is the compost of which our lives are made. The ugly human stuff that ferments below the surface of the masks we wear and the pretty stories we write.  This is the kind of expat memoir I hope to be brave enough to write one day.  A True Tale that transcends fear and shame and is written with the advice of Arthur Penn firmly in mind:

“Tap into what you don’t want to say.” 

The Calm Before the Storm

Our KLM flight from Amsterdam had a bumpy touchdown at the Kansai International Airport Saturday morning.  The "soup" (low cloud cover) did not clear until we were almost on the runway.  As we exited the plane I took a deep breath and that musty humid smell that I associate with Asia hit my nose.  Then it was through immigration and past customs and out the main doors where our car was waiting for us.

It is hot and humid here in Osaka.  The temperatures are about the same as Versailles (around 30 degrees Celsius) but the humidity is much higher.  But what makes it  bearable in Osaka is the omnipresent air-co and the breeze we get up on the 14th floor of our apartment building.  Up and wide awake at 4 AM, I drank my coffee sitting out on the balcony and watched the sun rise over the city.



By Monday the clouds began to clear and as I write this I see blue skies outside my window.  But the clear weather is not fated to last long.  Typhoon Nangka is headed our way blowing up from the south.  Osaka is just one of the many cities in its path.  Accuweather predicts that it will make landfall in Japan sometime Thursday night.


Friday, July 10, 2015

Paris Syndrome

In an hour or two Mr. Clement (our trusted taxi driver) will pick us up and take us back to the Worst Airport in the World (CDG).

Our time in the Hexagone was short - less than two weeks - and it was stressful.  The purpose of the trip was my 6-month checkup at the cancer clinic complete with my annual PET scan and a consultation with my oncologist.  The tests were ghastly.  Nothing like taking the train into St. Cloud with jet-lag and on an empty stomach in order to be poked with needles, shot through with radioactive liquid sugar, and then placed into a slim tube and told not to move a muscle for 20+ minutes.  To my horror they stopped the test right smack in the middle and two techs came in, flipped back the blankets and carefully examined my right side (the area where the tumors and my lymph nodes were removed back in 2012).  And then without a word to me they left and started the machine up again.  A few minutes later we were done, they fed me breakfast and let me go.

The experience was unsettling and I spent the next week swinging between anxiety attacks and depression.  Was this due to the stress of waiting for my test results or did I have a touch of Paris Syndrome?

Paris Syndrome (Pari shōkōgun) is a term coined by the Japanese to describe "a transient psychological disorder exhibited by some individuals visiting or vacationing in Paris or elsewhere in Western Europe. It is characterized by a number of psychiatric symptoms such as acute delusional states, hallucinations, feelings of persecution (perceptions of being a victim of prejudice, aggression, or hostility from others), derealization, depersonalization, anxiety, and also psychosomatic manifestations such as dizziness, tachycardia, sweating, and others  Similar syndromes include Jerusalem syndrome and Stendhal syndrome. The condition is commonly viewed as a severe form of culture shock."

Going from Osaka to Versailles is a shock to the system, no doubt about that.  The first impression I had as the taxi drove me from CDG to my home was how dull and grey and dirty France was.  The sun doesn't shine as bright as it does in the Kansai.  As the taxi darted through Versailles' small streets, the people I saw who were walking briskly going about their business never seemed to smile and on the surface they looked to be deeply unhappy.

Those impressions remained with me even after the jet-lag was gone and my tests were behind me.  Even the unusualy warm weather didn't help - I was cold much of my time here in spite of the 35+ degree weather.  One antidote to all this was to work on my house and garden.  The best therapy, I say,  is getting one's hands dirty digging weeds and pruning roses.  The other was to knock out the last of our house projects:  the rotting front porch.  The workmen removed it just before we arrived and they stopped by and installed the new wooden bannisters a few days after my tests.







A week after the tests we trekked over to the clinic for the consultation with my oncologist.  As tired and disheartened as I was about France, I was definitely not yet tired of life because when my oncologist announced that my tests were fine and they found no recurrence of the cancer  I was filled with relief which transformed itself into quiet joy as we headed back home.  And the rest of our time here was spent seeing friends and walking around the city of Versailles which now glittered so brightly and felt familiar once again.  Vacation at last.

Paris syndrome or stress and depression?  Hard to say.  Probably a little of both which was lethal for my morale.  A few posts ago I talked about the benefits of Third and Fourth Places.  This trip made me aware a that while I split my life these days between France and Japan I am also a permanent resident of a country called Cancerland.  And the last has one hell of an exit tax.

Another 6-month reprieve and now it's back to Osaka and our apartment on the 14th floor in the middle of the city with a view of the mountains.

Thursday, July 9, 2015

The International Tax Bipartisan Tax Working Group Report

Americans divided by a common language.

When Americans abroad talk international tax reform, they mean an end to citizenship-based taxation, foreign (local to us) bank account reporting, and the hated foreign account tax compliance act (FATCA) so that US citizens can be just as mobile, global and competitive as the citizens of other developed countries.

When Americans in the homeland talk international tax reform, they mean changing the US tax code so that US multinational corporations can be just as mobile, global and competitive as the corporations of other developed countries.

People versus big business.

Of the 347 submissions concerning international taxation sent in response to the US Senate Finance Committee's call for public input on tax reform, nearly 75% came from Americans abroad.

They asked, we answered.  Ain't democracy grand?

Today Calgary over at the Isaac Brock Society posted the link to the International Tax Reform Working Group: Final Report.

The good news is that Americans abroad got a mention, a nod, even whole paragraphs.

US citizens living abroad: the foreign earned income exclusion (page 44)
"A U.S. citizen who earns income in a foreign country also may be taxed on that income
by the foreign country. As a practical matter, the United States generally cedes the primary right
to tax a U.S. citizen’s foreign source income to the foreign country in which the income is
derived. This concession is effected by the allowance of a credit against the U.S. income tax
imposed on foreign-source income for foreign taxes paid on that income. As described
previously, the amount of the credit for foreign income tax paid on foreign-source income
generally is limited to the amount of U.S. tax otherwise owed on that income. Accordingly, if
the amount of foreign tax paid on foreign-source income is less than the amount of U.S. tax
owed on that income, a foreign tax credit generally is allowed in an amount not exceeding the
amount of the foreign tax, and a residual U.S. tax liability remains."

Income Taxation of Individuals (page 48)
"The United States generally imposes income tax on the worldwide income of U.S.
citizens and residents. Thus, all income earned by a U.S. citizen or resident, whether from
sources inside or outside the United States, is taxable whether or not the individual lives within
the United States. All U.S. citizens and residents whose gross income for a taxable year is not
less than the sum of the personal exemption amount and the basic standard deduction are
required to file an annual U.S. individual income tax return. "

Citizenship Renunciations  (page 50)
"U.S. citizens who relinquish their citizenship and U.S. residents who terminate their longterm
residency may be subject to special tax rules intended to limit any tax benefits from
expatriation. Certain persons expatriating before June 17, 2008 are subject to an alternative tax
regime for a period of 10 years if they meet certain income and net-worth thresholds or they fail
to comply with certain U.S. Federal tax obligations."

Very much a "just the facts, ma'am" style of reporting.  Please note that the above paragraphs are about the rules. No mention is made of the merits or demerits of the system as it actually works (it doesn't) for Americans abroad.  But the report does go into more detail about how US corporations are effected with the focus on how "the United States has become less competitive abroad because of its worldwide system of international taxation."

So, in a nutshell, the issues reported by 25% of the submissions to this committee got a hearing, while the other 75% sent in by citizens and organizations like American Citizens Abroad got a recitation of the rules.  That's disheartening.  That's very bad news.

This report reinforces my sense that Americans abroad and Americans in the homeland no longer speak the same language - that both sides have a context that the other doesn't understand and perhaps even a conflict of interests.  US lawmakers' desire for the US to be more competitive abroad through judicious tweaking of the tax code is limited in scope to big business.  The desire of the American people to be competitive and global simply doesn't merit nearly the same attention.  Our problems are not their priority.

And, yet, at the end - at the very very end - of the report  they did throw out a bone.  A nod to the numbers and all those fine people and organizations who took the time to bring the tax issues of Americans abroad to their attention.

Overseas Americans (page 80)
"According to working group submissions, there are currently 7.6 million American citizens
living outside of the United States. Of the 347 submissions made to the international working
group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing
on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the
Report of Foreign Bank and Financial Accounts (FBAR).
While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation
of individual Americans living overseas within the time-constraints placed on the working group,
the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns
articulated in the submissions moving forward."

Which is pretty much what we've been told every time we've gone to Washington to talk to these folks:  "We'll think about it" which we might be forgiven for taking seriously back in, say, 2012, but we'd be idiots to accept once again in 2015.

And that means that we (Americans abroad) need to change our language.  According to Republicans Overseas FATCA Legal Action, the anti-FATCA/FBAR lawsuit led by James Bopp, Jr. was filed in US district court on June 29 with 7 plaintiffs one of whom is Senator Rand Paul.  With that in mind there is a phrase that just about every American at home and abroad knows and understands.  Perhaps these words will at long last get their attention:

See you in court.

****************************************************************************

For those of you who still believe that persistence and people power stand a chance, here are the names of the politicians on the International Tax Reform Working Group who are being asked to "carefully consider"  the tax issues of Americans abroad.  Let them know what you think about their report and ask for concrete action on their part.   It's worth a shot if you still believe that polite words and well-written pleas for mercy might work.

Senator Pat Roberts (R-KS), Senator Sherrod Brown (D-OH), Senator Michael Enzi (R-WY),
Senator Tom Carper (D-DE), Senator John Cornyn (R-TX), and Senator Mark Warner (D-VA);
Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR).