What is the Systemic Risk to the World’s Economy….

…if other countries were to copy the US citizenship taxation model as a delusional answer to their current deficit problems?

This is the 3rd in a series by Andy Sundberg, Overseas American Academy, Geneva, Switzerland, 6 January 2012.  Numbers 1 and 2 are here and here

Note from Just Me: This scenario is published with some editing modification by permission of the author. It designed to help friends and acquaintances who don’t understand the fuss. They don’t “get it.” It is intended as an educational tool by extrapolating the unique US citizenship taxation model to its logical Orwellian conclusion. It is in the “what’s good for the goose, is good for the gander” scenario category. While it may seem far-fetched, as we have learned recently, black swans do happen. Tax policy in any country does not have to be logical or rationale to be enacted. It is often circumstance driven, and unintended consequences are absolutely assured.

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There are many governments today facing grave financial difficulties and under considerable pressure to find innovative ways to strengthen their economies, reduce their national debts, shrink their annual budget deficits, and increase their tax revenue streams. They will inevitably start taking a much closer look at the practices of the world’s leading countries as possible models to emulate. Inevitably, some of them could be tempted to consider replicating a very special and unique practice that the world’s most powerful nation anchored in place five decades ago. If so, we all could soon be in very deep trouble.

Therefore, in anticipation of such a threat, imagine the following hypothetical scenario and take a moment to consider the stupefying implications of this seemly insane development should others decide to emulate America’s unique citizenship taxation model.

Irish Citizenship Tax provision passed in Parliament. 

Julian Leary, an American citizen living in San Francisco, opens his morning newspaper to read a press release from the Irish Revenue Tax Service Commissioner informing the world that Irish citizens regardless of where they live, are reminded they are required to submit an income tax return each year and pay Irish taxes on worldwide income. Although he was born in the United States, under Irish law Julian realizes that has acquired his Irish citizenship at birth through his father, who immigrated to the United States from Ireland before he was born. Julian has never set foot in Ireland, and has never had an Irish passport. He has never applied for or received any other benefits from Ireland.

Surely this doesn’t apply to him, does it?

After making some inquiries, Julian discovers that Ireland, to help meet serious budget shortfalls, has decided to mimic the practice of the United States, and is imposing Irish income tax on all of its citizens no matter where they live.  He hadn’t much considered his dual citizenship before, but now he really takes notice as two countries are now making a claim on him for taxes even though he is living in the US!

The Irish tax system has very complicated rules and special tax forms that change from one year to the next.  As Julian begins to understand from all the reading he does on the Irish Tax Revenue web site, that if he does not fully comply with these requirements, he can face severe financial penalties, or anticipate spending some future time in an Irish jail if he is deemed to be an Irish tax evader.

Obscure law passed with “assumed guilty” type penalties for non willful failure. 

Julian learns that these Irish tax filing requirements had actually been adopted several years earlier, but neither he nor anyone else living outside of Ireland had ever heard of them. They were contained in an obscure law, several thousand pages in length, which has led to the creation of more than 100 pages of complicated tax forms, many of which he might have to submit each year, depending on his current economic status, his job, his type of investments, and his worldwide assets.

Penalties are not just for ‘willful’ evasion, but are also for “non willful” failure. They are $10k per event, and instead of being innocent until proven guilty, the tables are turned. The burden of proof is on him to show that his failures were non willful in an Irish tax court and that he is not guilty.  By application of these “non willful’ penalties, it is as if his guilt is assumed.  It is upon him to make the case that penalties should be mitigated or not applied.

Julian has been very proud to be an Irish citizen, but he begins to question whether this recently discovered Irish tax obligation isn’t far in excess of any advantages he might ever enjoy by remaining Irish. He already has American citizenship which he automatically acquired at birth, so he doesn’t really need the Irish citizenship.

Julian wonders if he could avoid any punishment, financial or otherwise, by simply ignoring this new obligation and pretending his Irish identity didn’t exist.  He hasn’t heard of anyone actually being punished yet, but the language emanating from the Irish tax office is very strong, and he begins to fear the consequences.

He soon learns that he could be running a major risk, especially if he were to continue with his plans to visit his Irish ancestral home and have his Irish status discovered going or coming through immigration. Irish immigration and tax department data bases have just been linked, so the risk is increasing daily that he might get caught.

He decides to try to give up this second citizenship, as he doesn’t really need it. He assumes that all he has to do is to tell the Irish Government that he is renouncing his Irish citizenship and that will be the end of his problem. Maybe he can just call them on the phone, or send them a letter.  That should do.

But…. it doesn’t work that way.

Ireland has cloned the U.S. citizenship renunciation process too, so getting rid of his Irish citizenship will require that he prove to the satisfaction of the Irish tax authorities that he is current with his tax filings, and has paid all of his Irish income taxes for the last five years.

Renunciation will not be easy.  

This renunciation will require that he pay a $500 fee just to apply, and will have to wait for months to get an appointment at an Irish Consulate that is across the country in DC from where he lives in SFO. He has to be personally present, as he can only renounce officially in front of Consular Officers.

To complete the process, he will also have to fill out new forms that will require that he ‘mark to market’ all of his worldwide assets, translate them into Euros at the exchange rates applicable as of the day each of them was acquired.  Then, he may have to pay an exit tax (depending upon his gross assets) on the capital gains that might appear to arise when these assets are valued at today’s exchange rates for Euros. This exit tax which he will pay is calculated on phantom unrealized capital gains that in dollar terms are pure fiction. He may actually have capital losses in US dollar terms. However, due to the magic of exchange rate fluctuations they appear to be real gains in Euro terms.

Whistle Blower law enacted.

Then, just when Julian starts to calm down, he is hit with yet another nasty surprise. Julian sees on Fox News, that the Irish Government, copying current American practice, is offering large financial incentives to anyone who will ‘dob in’ an Irish citizen who is suspected of not paying Irish tax on all worldwide income.  So now another cloud of fear descends over his head which will not go away until he complies with all these Irish filing requirements. He will henceforth have to be very wary of all of his friends down at the Irish pub he frequents on Friday night, as any one of whom could nab a tidy reward by ratting on him to the Irish tax authorities.

But wait, there’s more.

The final Irish straw comes when he is informed by two of his personal American banks that they are going to close his accounts because recent changes in Irish law have imposed heavy new compliance and reporting obligations on all banks with Irish citizen customers. This has turned Irish citizens into pariahs who are too legally risky and compliance costly for these banks to want to retain as customers.

Welcome, Julian, to the grim reality of the daily lives of many Expat  and dual citizen Americans currently living overseas!

But, are you ready for this? Julian’s woes are not yet over. In fact, far from it. His citizenship nightmare has only just begun.

Another Country weighs in with a claim 

Julian receives a registered letter from a different country. It politely informs him that according to their records he is a Swiss Citizen, because his mother, whose maiden name was Juliette Taxmimor, immigrated to the United States from Switzerland when she was a child. Since Swiss law states that children born abroad to a Swiss parent automatically acquire Swiss citizenship at birth, Julian is legally a Swiss citizen.

And guess what? Yep, the Government of Switzerland has decided to also copy the U.S. model of worldwide taxation based upon citizenship!  He is informed that according to Swiss records he is currently in non compliance with his tax obligations. So, he will have to start filing forms and paying taxes each year to the Swiss Government too.

Now three countries have a claim on Julian’s citizenship taxes!

Julian learns that while Swiss law will allow him to take credit for some of the taxes he pays to other two governments, it will refuse to give him any credit for tax paid on capital gains because such gains are not taxed in Switzerland. The Swiss will however impose an annual tax on the total value of his worldwide assets because that is the way they have designed their tax system. There is another little stinker in this complex conundrum. The U.S. Government will not grant him any credit for this wealth tax paid to Switzerland when he files his U.S. income tax returns.

The devil has found a really cozy home in these myriad of noxious details and counter claims and foreign tax credit denials by three governments.

All of the Swiss tax forms and instructions are written in four languages, French, German, Italian or Romansh, and Julian has to choose which language he prefers. There are thousand of pages of text, and many hard-to-comprehend forms that he is going to have to wade through each year.

As in the Irish case, Switzerland had discreetly enacted this legislation a couple of years previously, without any noticeable publicity. However, unlike the US, Switzerland decided to make an effort to inform all citizens of their obligations.  It just took a while for them link up their data bases and send out the letters. This belated effort does not mitigate Julian’s responsibilities.  He is already in technical violation of the laws of Switzerland, and subject to financial penalties for not having filed these Swiss income tax forms on time.  Ignorance of the law is no excuse, as you know.

Switzerland FBAR law enacted

Switzerland has also copied the American bank account report FBAR model, so Julian is required to inform the Swiss Government of all the accounts he has at banks or other financial entities no matter where they are located. He is required to report the highest value yearly in Swiss currency amounts of each and every financial account he has anywhere in the world, no matter what currency he actually uses in these accounts. That means all his US household banks accounts have to be reported to Swiss tax officials.

In its enthusiasm for this imagined extra tax revenue bonanza, Switzerland has even gone beyond the current American practices.

As Julian has been running a small business in SFO, he will also have to file a special report identifying each and every client with whom he has more than 600 Swiss Francs of business per year. He will have to report their Swiss tax identification numbers to the Swiss authorities. If any of his American clients or suppliers don’t have a Swiss tax identification number, then the question is how could they acquire one?  Would acquiring one make them vulnerable also to some Swiss tax? Do they want to continue to do business with him?

Switzerland Voluntary Disclosure Program started.

Finally, the Swiss Government, in its wisdom adopts the IRS Voluntary Disclosure program and offers Julian the chance to ‘come clean’ of his non compliance, and accept a 25% penalty of his highest aggregate amount of all bank accounts and assets in America and the world since the day the law went into effect expressed in Swiss Francs based upon year-end FX rates.

Filing a quiet disclosure (just filing back returns and paying taxes) is strongly discouraged because if discovered via audit, severe criminal and financial penalties are threatened.  The repeated threatening messages in the program FAQs and subsequent press releases is very clear…. Enter our Program!

Julian quickly understands that this program is voluntary in name only.  The Swiss Revenue Office message is simple. “You better come clean now.  And, if you disagree later with the large penalty, we will consider creating an Opt Out program for you to argue for a lessor penalty later.  It might take a couple of years of personal effort to mitigate, but never mind, we will be fair. Trust us.”

Julian is absolutely gobsmacked and dumbfounded. He simply doesn’t know what to do. He has read in the press what has happened to Americans overseas, because of similar IRS actions recently, but never gave it much attention.  He assumed it would never happen to him in America. He doesn’t want the same fate, but what’s he to do?

In addition to all of his American tax obligations, he now has to decide if he will simultaneously comply with onerous and intrusive new obligations to two other sovereign governments.  This tax obligation is based on his same income and assets, but defined differently for each of these governments in different national currencies with rates fluctuating every day all because he is claimed as a citizen by both of them, as well as the USA where he has lived all this life.

He is paralyzed with fear and overcome with despondency. What is he to do about all the new tax complexity that has just descended upon him?  This is just a bad dream, isn’t it?  Surely they won’t come after him here in SFO, will they?  He can just go underground and ignore this, right?

Stop now, take a deep breath, and wait a few seconds before reading on.

Okay, are you ready for this? As far-fetched as it seems, Julian’s amazing story is still far from reaching its ultimate crescendo.  If the incredible citizenship taxation system were to be adopted as the world’s preferred taxation model, then the problems don’t end here.

Two more countries join in staking a claim to his citizenship taxes.

While starting to wade into the details of his Irish and Swiss tax obligations, he receives an email from friends living in Hungary and Lithuania with links to local news stories that the national tax authorities there have enacted legislation to begin a new citizenship taxation regime.

So what?  How could that effect him?  

Julian’s grandparents were natural-born citizens of these two countries, and under their respective laws he also has two other citizenships’ via his grandparents. These countries are now cloning the U.S.citizenship-based tax legislation, and he will soon be under their worldwide tax jurisdictions too, even though he has never worked or lived there.  All of the tax filings he has to submit to them each year will also have to be in their national languages, with all values and transactions calculated in their currencies which also fluctuate in value with respect to other currencies each and every day!

What is he supposed to do?

In a panic, Julian starts desperately looking for help. His first call is to the Irish Embassy in Washington, but they tell him that his Irish tax obligations are his own personal responsibility, and unfortunately the Embassy does not have the proper resources to assist him. They tell him that the Irish Government, in mimicking U.S. government practice, has set up four overseas tax compliance offices, but three of these are huddled closely together in the London, Paris, Frankfurt triangle, with a fourth far away in Beijing. He could try there, but there is currently no office in the United States where he can solicit any local help.

The same negative responses come when he calls the Washington embassies of Switzerland, Hungary and Lithuania.  None of them can offer him any assistance. He is totally on his own.

Hire a professional tax practitioner.

Julian knows he has to find some knowledgeable and experienced tax specialists to help him understand the laws to either become compliant with all of these new obligations or find a way out of this morass. Suddenly, a whole new cottage legal industry has sprung up advertising dire warnings if he doesn’t come into compliance, and conflicting advice as what he should do.  He needs their help to minimize the tax cost and compliance failure penalties, but with such divergence of opinion he hardly knows which way to turn.

He wonders. Isn’t there an international court of arbitration or something to sort out all the competing Citizenship claims by various governments on an individual residing in a different country of birth or citizenship? None of the tax experts that he consults with knows of such a mechanism. Their advice remains, become compliant!

This sends his fear factor soaring.

These specialists say they can translate these laws for him and provide some very arcane acumen on filing taxes to several countries simultaneously while taking into consideration inter-country tax credits and currency cross-over effects. They will bill him by the hour at a very expensive rate, and make no guarantees that their advice and counsel will effectively reduce his liabilities or exposure for penalties. He realizes that this is going to cost him a considerable fortune just to get current with his newly discovered obligations with no certainty or finality to his dilemma.

Each year, going forward, he will have to rely on specialist to file his taxes. There are few competent practitioners in this specialized area of tax law. He will have to continue to pay huge fees for these services.  He is advised that he might get some tax credits depending on the type of income he has, as defined by the tax rules of these 4 new countries.  If he is lucky, he is told, he may not have to pay any additional tax for a given year to any one of these countries. Never mind that his tax preparation invoice will effectively be a significant tax which goes straight into the practitioners pockets and not the countries Treasury looking to him for tax revenue salvation.

The aggressive crackdown actions accelerate.

As these countries start cloning other long hallowed American practices, Julian reads online at Bloomberg news how these governments are becoming more aggressive in their public pronouncements on how vigorously they are going to enforce these new requirements. Conforming to yet another American tradition, boisterous and outspoken leaders of the parliaments of each of these countries, begin taking political populism stands, and start making public statements that no longer laud him as a treasured national asset. They now vilify him and other overseas citizens as ignoble tax cheats who deserve to be pursued and punished to the full extent of their laws.

They pass additional legislation requiring financial institutions around the world to identify all their citizens and report financial data on them back to their tax offices, or face serious business limitations on non compliant banks.  Each bank is left to figure out the peculiar needs of each country and report accordingly. They are also warned about not transferring money to non compliant banks without withholding 30% as a tax tribute and sending back to the respective tax offices.

Here comes John Doe summons.

To complete this sad dystopian story, all four of these governments start to copy another ugly American practice by issuing John Doe summons to every bank operating in the United States. These banks are told that they must provide detailed information pertaining to their respective dual citizens who have accounts at their banks, and henceforth keep doing this on a regular basis. As it turns out, the US banking system is the center of world-wide tax evasion after all, with money placed here by citizens around the world for safe keeping from tyrant regimes.  It is natural then, that these other countries would want to crack this problem once and for all.  John Doe summons should do the trick. This is what the IRS and the DOJ uses, so there can be no complaints.

Not surprisingly, many American banks simply throw up their hands and inform Julian that they are closing his accounts and canceling his credit cards as all the countries of which he now holds citizenship have requirements that are just too expensive and difficult to comply with.

However, the IRS to help end this conflict between competing countries, and to defuse complaints about Congressional FATCA statutes, files a regulatory announcement in the Federal Register. It states that it intends to simplify the process by requiring US banks to report all interest income from all US non-resident and dual citizens in the US, as it understand these countries new-found need to tax citizens.  It is what America does. The IRS will pass the information on to the respective government tax offices, so the banks don’t have to do it.  A world-wide citizenship tax reporting regime has silently, without fan fare, begun. The press is silent.  Not even Fox notices!

There is one bank where Julian has had his business accounts for years that has decided to comply with Switzerland reporting requirement. It has a bank operation there, but not the other 3 countries.  It decides to be compliant now because failure to do so jeopardizes its operation in Switzerland. They send Julian a Swiss tax form to complete for the Swiss tax authorities, and if he fails to sign it, they will withhold 30% of his distributions each quarter and send to the Swiss Tax Authorities.

Julian is in a real quandary now, as this is effecting his business as well as his personal life.  Should he just close this account, or sign the Swiss form?  Time for another expensive session with that tax practitioner expert!

Managing conflicting tax obligations not easy.

When Julian tries to imagine what his daily life will now be like, with all of these new obligations to four sovereign foreign governments piling up in addition to the burdens he already bears as an American citizen, he starts to comprehend that his life will be a very different and much more weary, expensive and precarious existence in this bizarro citizenship taxation world.

He will be wasting quite a lot of time each year filling out a myriad of tax and related forms. Considerable amounts of his modest income will have to be spent to acquire professional advice to try to comply with these multiple obligations. All of this will be in addition to the money he will have to pay in income taxes and possible penalties to these four countries as their respective laws require.

To top it all off, he and his expensive advisers will have to find a way to simultaneously decrypt all of these laws to determine the optimum sequence in which he should file these tax returns to gain the maximum benefit of offsetting taxes paid to one government against those that will be due to other governments on this very same income. It will be a novel and strange way to be spending a good part of his life from now on.

The tragedy doesn’t end here with mere financial consequences for Julian. He is in his mid-50s, has been modestly successful so far. He runs a small business. This has enabled him to help his four daughters pay for their college educations and also to support his ailing mother. It has given him just enough extra after-tax income to also let him and his wife indulge in some interesting vacations in other parts of America. He sadly realizes, alas, that all of the previous satisfaction of his modest prosperity will soon be evaporating. He becomes resigned to the fact that many other dimensions of his life will change from here on out.  It will become much less pleasant existence if he is to remain compliant with all of these new requirements.  His life has changed forever.

All of the above sounds kind of absurd, doesn’t it?  And it is!

Remember this is hypothetical, and arguably fanciful, and yet a real enough possibility that you have to contemplate what could happen if other countries decide to follow the US example. It can not be dismissed out of hand.  It is the logical conclusion of what happens if others should adopt the illogical citizenship taxation model instead staying with the more logical territorial taxation system they currently have.

Surely they would not go down this route, would they? They are not that myopically stupid, right? They would leave it to America the hubristic assertion that it alone has the sole right to tax its citizens anywhere in the world, correct? However, just like America, they too desperately need new sources of revenue, and would that be the tipping point for sending them in that direction?

A message for Uncle Sam about the potential for severe world-wide financial consequences.

Dear Uncle,

It  would be prudent for you to become much more cognizant to the short and longer term implications of a citizenship taxation threat, as unlikely as it may seem to you now. Should this hypothetical scenario ever start to become real, via new citizenship tax legislation by just one or more EU countries now buffeted with financial difficulties, it will infect the American economy the same way America’s current citizenship-based taxation already infects the economies of every other country around the world today. Billions of American dollars will start to flow abroad from the pockets of many millions of Americans with multiple citizenship even though they spend their entire lives in the United States and never step offshore.

Tempting Too-Good-To-Be-True illusions.

If other countries become attracted to the too-good-to-be-true illusion that extra tax revenue flowing in from the pockets of overseas citizens comes at no cost, great systemic risk exists.

If they think citizenship taxation is going to boost the coffers of their national governments, it will not be long before a new paradigm of harsh reality hits from all directions with a multi-dimensional whammy.

Amid the confusion of which government has the right to tax which citizen, and which government can make individual demands on financial institutions around the world, international investment flows could quickly begin to wilt.  One economy after another could begin to freeze up due to bank compliance uncertainty as to which financial institutions you can safely deal with. New barriers to international commerce and finance will begin to be erected between tax compliant and non tax compliant banks undoing years of financial integration and free trade in goods, services and capital.

Black Swans do happen.

If this happens then Katie-bar-the-door, because hell can freeze over as capital flows seize up. The already fragile financial and budgetary conditions in so many European countries might truly become impossible to repair, as they start fighting over each others right to tax their citizen’s living around the world, and at the same time demanding special data reporting and tax remittances from all financial institutions back to their tax offices.

Uncle, your representative Ambassador Rice enjoined the UN resolution against Eritrea diaspora tax.  That resolution will ring even more hollow if other countries begin to do what only America and Eritrea do.  If citizenship taxation is the “American way” of inspiring “freedom and democracy” around the world, then be prepared for a little “shock and awe” blow back, as other countries come after your homeland dual citizens for taxes due. Are you going to stand up for them against the onslaught?  Or…will you just turn their data over to their respective countries internal tax offices, as you are currently requiring foreign institutions to do for Americans living around the world with FATCA regulations passed by your Congress just 2 years ago?

Hyperbolic scenario?

I do not want to be hyperbolic here, and realize right now this scenario is in the low probability but high impact arena. I would like to think that other countries are more sane with their tax policies than America.  However, should citizenship taxation become the new international norm in search of revenues, the potential for serious systemic shock could make the 2008 financial crisis look tame by comparison.

This could be the ultimate Black Swan event that would occur very quickly if even a few European or Asian countries were to follow the same practices that America employs. This would disrupt the world economy with simultaneous fiscal tremors that could trigger a fiscal tsunami from which we as a sovereign nation might have a hard time recovering from.

For the U.S.economy alone, in such a scenario, it is not at all unrealistic to foresee tens of millions of  U.S. residents sending several hundred billion dollars a year in tax remittances abroad to more than 192 other sovereign countries.

It is not hard to foresee banks ceasing to operate in certain countries, and begin to restrict their business to citizens of origin to reduce compliance costs.  The impacts of this on credit and capital flows could be significant.

In addition, there would also be hundreds of millions if not billions of people living everywhere else on our planet caught up in this same fiscal frenzy. The resultant worldwide tsunami with money flowing in every direction in and out of every country just related to tax compliance would doubtless be in the trillions of dollars drowning any possibility of fiscal stability anywhere.

On a positive note, the employment ranks of international tax practitioners would soar!  I guess this is job creation success, eh? 🙂

Will sanity prevail?

We would hope that some miracle of enlightenment and sanity might occur at the White House and in the halls of Congress before this scenario becomes a reality and these repercussions spread all over the planet! Surely the rest of the world is more sane than America, and wouldn’t abandon their territorial tax systems in favor of the US Citizenship taxation, would they?

With rioting in the streets of Athens, and a grim fiscal austerity facing those still living in the Greek isles, reaching out to tap a vast diaspora of Greek citizens in Australia and America to help solve a budgetary crisis back home might look attractive. It is not outside the realm of possibility. It just takes one county to start a tax revolution which can spread like wild-fire, as we have seen with the Arab spring.

A Simple Game Changing Strategy Can Still Save Us.

Believe it or not, there happens to be a serendipitous solution that would work to preclude these possibilities.  Here it is.

The US should boldly step forward, perform its long-overdue confession of error, coupled with an appropriate mea culpa, and then take the initiative to propose and aggressively push forward a new….

“International Agreement to Universally Ban Citizenship-Based Taxation Forever”.

This should become a top priority project to be pursued at the highest diplomatic levels at the UN. It should be quickly signed and implemented by all of the governments of the world before a few European countries start emulating America’s practices out of dire fiscal need.

America has the experience, knowledge, wisdom to propose redress of the problems related to this issue. It would doubtlessly be well-respected and warmly welcomed too. It is in the best position today to acknowledge that it has been playing with a very dangerous hegemonic fire here, and needs to douse it now before it flames up somewhere in Europe.

Show some real Leadership and be not afraid.

Uncle Sam, fear not partisan attacks in an election year, or demagogic rhetoric about patriotism. Educate your huddled masses in the homeland. Confess to the world that this ‘little stinker’ that the US has been experimenting with for over five decades has finally been recognized as an economic weapon of massive self-destruction (WMSD) that it is. Stop it from going viral and bringing the entire world’s economy to complete paralysis.

Step to the plate please. Do the right thing. Introduce the Agreement above as a UN resolution.

Bench IRS Commissioner Shulman until you can get legislation to undo the years of harm that he has done with IRS enforcement of Expat citizenship tax policies related to offshore accounts.  Stop the IRS inadvertent jihad against Dual US Citizens and Expats around the world, and have the IRS affirm the Tax Advocacy Directive which was issued by Nina Olson regarding recent “so-called” voluntary disclosure programs.

These actions on your part would go a long way to undo the harm being done to the IRS and the US reputation around the world while assuring that no new countries decide to emulate the US model.  This would not preclude the DOJs continued rightful pursuit of Homeland resident tax evasion using the current legal system to crack bank secrecy overseas which these US residents use to hide their ill-gotten gains.

You, in coordination with the governments of the world representing all inhabitants on our charming little blue planet have everything to gain from such prudent actions.

Please don’t dither any longer.

Some ominous tremors are already starting to be felt, and a tsunami wave is swelling up in the oceans of the European budgetary and fiscal crisis that could swamp us all if you don’t take action soon to preclude adding a turf fight over citizenship taxes too.

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Andy Sundberg, Fellow and Secretary of the Overseas American Academy, in Geneva, Switzerland, is a retired U.S. Naval Officer who served in Cuba during the Quarantine in 1962, and in the north of the Gulf of Tonkin during the Vietnam War in 1967-68. He was born in New Jersey, grew up in a military family, finished grammar school in Japan, and high school in Germany. He is a 1962 graduate of the U.S. Naval Academy and was a 1963 Rhodes Scholar at Oxford University in England where he studied Philosophy, Politics and Economics. Since moving to Geneva, Switzerland, in 1968, he has been a consultant helping corporations, governments and international organizations evaluate investment and political opportunities and make other important decisions in many countries of the world. He is a life member of the American Legion and the Veterans of Foreign Wars, a member of the Board of the Millennium Institute in Washington, and the Marine Resources Development Foundation in Key Largo, Florida. He was the founder of the American Children’s Citizens Rights League in Geneva in 1977, and American Citizens Abroad in 1978 (an organization that now has members in more than 90 countries). He helped set up the local branches of both the U.S. Democratic and Republican parties in Switzerland, and then served as the worldwide chairman of Democrats Abroad from 1981-1985, and as a member of the Democratic National Committee from 1981-1989. In the early 1980s, while living in Geneva, he flew regularly to Washington where he served on the staff of the Chief Deputy Majority Whip in the U.S. House of Representatives. In 1988 he ran as a favorite son presidential candidate in the worldwide overseas Democratic Party primary election and came in third, having won the vote in more than five countries. He has been active with Liberal International (an association of more than 100 Liberal Democratic Parties in more than sixty countries) since 1984, and was named Vice Chairman of the LI Human Rights Committee in 2009. He has participated at meetings of the Committee on Migration of the Parliamentary Assembly of the Council of Europe for more than a decade. 

50 thoughts on “What is the Systemic Risk to the World’s Economy….

  1. Surely there must be at least one Eritrean American somewhere out there who is living as an expatriate in a third country. Canada would be the obvious place to look, actually.

  2. @Eric… I bet such an Eritrean American would really be getting a raw deal if he complied… he probably is evading both countries’ taxes (which to my mind would be honest, not criminal, behavior) and paying only Canadian tax.

  3. Very interesting. I often wonder if Brazil copies the US system. The US banks would have to report to Brazilian Income Tax the names and accounts of the Brazilian Greencarders and dual citizens living in and out of the US…And then the ones who are retired receiving SSI would have to pay taxes on their SSI to Brazil. The same if they had tax free municipal bonds. And they would have to pay Brazilian CPAs to do their Brazilian IT. And how about the millions immigrants in the US from other Countries? Nice scenario…no?

  4. I have seen the future, and it is taxation! Excellent and frightening article. I have now checked my ancestry for any taint of dual nationality and discovered none, so I will sleep easily 😉

  5. markpinetree

    I think they all copy from each other. After you have seen a few different country tax systems you soon begin to see similar themes. So far, no one but Eritrea has taken up the US Citizenship tax style, but in these times of fiscal austerity, some other countries might get the idea. If it does happen, we are in for some difficult times sorting it out. I just wished Congress could see the absurdity of what they have created and then compounds the problem with the likes of FBARs and FATCA.

  6. @p33t

    The way the US would have it, is you should only have one citizenship, and never leave your borders! Just the opposite of the force-of-nature immigration that is happening the world around. It would really be a bizarre world, if all governments, or even just a few more than America decided to base their taxation model on Citizenship and not residency. The Economist understands the issue, but Congress surely does not.

    I quote… America’s policy of taxing its citizens wherever they live seems especially perverse; it is an accountants’ charter. As for benefits, residency is surely the key.

  7. I heard that North Korea also taxes its “expats”. I imagine that this is because North Korea does not recognise the right to emigrate, so this means that their tax code is written such that all North Korean citizens pay tax.

    Ten years ago the disaster combination would have been to have been to be a Philipino-Eritrean-American.

    I have a contact who holds dual Eritrean/American citizenship (lives in the US). I will ask what the compliance rate with the Eritrean taxes amongst their expats is like. I would imagine that it is rather low, but, then again, you also read about Eritrea threatening family members back in Eritrea if you don’t pay, so who knows.

  8. Most countries that I know of have policies that already tax worldwide income, like Brasil, the UK, and Germany. I think this works well for most countries because – the theory that taxes provide for services is satisfied. Moreover, it’s fair. I can’t understand why the US can’t set up a system like this. The US wants to try to next-to-impossible and track people around the world.

    I live where I live. If there is any conflict in the law, I have to default to the law here. The last thing I’m going to do is rot in some 3rd world jail. Even the US Consulate says that there is nothing that they can do if I’m thrown in jail here. These US policies are very reckless and show a complete lack of caring, understanding, or compassion for US Citizens abroad.

  9. No, Brazil doesn´t tax its citizens for their worldwide income. Brazilians living in a foreign country don´t owe income tax in Brazil. Brazil only tax Brazilians who are residents of Brazil and have investments in a foreign country. They follow the US model, that is Brazilians who reside in Brazil must declare income from investments in foreign countries but they can have credit for the taxes they pay in the foreign country and only pay the difference if the tax in Brazil is higher, Up to now I don´t know how Brazilian banks will deal with Fatca. Also I am curious if they are going to report dual citizens and greencarders living in the USA.

  10. @ just me,
    thanks so much for posting this – an excellent illustration for those who don’t get it…and the Economist article also!

  11. Excellent post!

    I’ve adapted and am moving comments I made yesterday another tread yesterday here. I hope Steven Mopsick will review this thread and respond.

    Now that they’ve seen the agreement with some European nations, I’m sure the Russians and the Chinese would love a reciprocal agreement with US to allow them to identify, obtain addresses and try to seize money or assets from US citizens who were born in Russia or China. Would the US sign such an agreement with those countries? What happens if Eritrea, Saudi Arabia, Syria and Iran want to come on board and demand addresses and financial information of anyone born in their countries.

    IRS has stated they are now hoping for “reciprocity” on reporting with countries around the world whereby banks will report to their governments and those governments will report to IRS. In such a global accord, those countries would have the same rights to information as the US does.

    This, of course, could affect the President of the United States and his family.

    Barack Obama’s father was from Kenya. So, Kenya decides in a global tax agreement to claim him as a “Kenyan person” (just as US is doing to anyone born outside US to a parent born in US) Now, Obama would have to file returns in Kenya and report on all of his assets, including his education savings for his two daughters and his own retirement savings.

    Obama also became a citizen of Indonesia as a child so Indonesia decides he is an “Indonesian person.” Again global “reciprocity” means he must report to Indonesia.

    Of course, American banks must report private financial information about President Obama to the IRS, who, in turn, must report to Kenyan and Indonesian governments about the confidential finances of President of the United States. If he does not give his bank consent to report these assets, the bank will be required by international law to close all his accounts. If he fails to report directly to Kenya and Indonesia, Obama would be penalized a large portion of his wealth, be labeled a “tax cheater” or a “tax evader,” and threatened with criminal prosecution and imprisonment.

    Obama’s half-sister (Maya Soetoro-Ng) was born in Indonesia to an American mother and an Indonesian father. So, in an international accord, her bank must identify her as an “Indonesian person” and submit information to IRS to submit to Indonesia. Her husband (Konrad Ng) is Chinese-Canadian. So his bank would have to submit information to IRS to submit to China and to Canada. Their children, (born in US) are American, Indonesian, Chinese and Canadian “persons” because of their parents’ heritage so, as adults, they, their banks and IRS must report to four governments.

    Logic tells me there are far more American citizens of Russian, Chinese, Indonesian, Kenyan or other origin in US than the 6 million “US persons” living outside US. So, American banks and IRS will bear most of the “reciprocity” burden. In addition, far more money could flow out of the US than into it.

    Where are the resources to deal with all this? 30 Year Tax Vet tells us IRS is understaffed now. Will they add huge numbers of staff at taxpayer expense to,process this? Do American banks have the staff or systems to deal with this? Does the US plan to solve their unemployment problem by hiring people to gather, process and report on all this information so US can meet their “reciprocity” obligations?

    Of course, once all our bank accounts are closed because we do not give consent to release our private financial information, we all will have our money in local credit unions or in cash, so there won’t be any bank information to submit to IRS about us.

    Would it be constitutional in US to gather and report such information on American citizens living in US who were born elsewhere (or whose parents were born elsewhere)? Of course not. But, IRS vet says other countries around the world will simply change their constitutions and laws to meet American demands. So, of course, US must do the same under “reciprocity.”

    Already, some members of Congress are voicing objections to American banks having to collect information on citizens of the five European nations. What happened to “reciprocity?”

  12. Since the US has very low individual tax rates compared to other countries, if those other countries were to switch to citizenship based taxation US residents would owe money to foreign governments. Any money paid to foreign governments cannot be spent in the US which would cause the US economy to collapse even more. How do they like “reciprocity” now?

  13. The kind of leaders who would change their own countries’ constitutions to betray their citizens are the same kind who would look for creative ways to increase revenues by going after American residents who they know will owe them taxes due to the low US rates.

    Most dual US citizens residing in Canada and Europe will likely not owe any taxes to the United States since their resident country’s tax rates are so much higher.

    The end results US gets nothing from most dual citizens since their tax returns will show $0 owing. The other countries could be in for a windfall if they switch to citizenship based taxation. The US would lose big time.

  14. @OMG, that’s not necessarily true. My normal tax rate is higher in the UK but my personal allowance is also more generous. This means that when I retire, my overall income taxes would be lower in the UK, certainly from 2013 when our personal allowances in Britain are going to rise but US taxation is conversely going to also go up. This means that a senior citizen on a low pension could well wind up still facing US taxation.

    In the UK we’re allowed to start drawing our personal pensions at 55 whereas we have to wait till 59 and a half in the US. This means that if I took early retirement, I’d be facing a 10% penalty on all my pension income if taken before 59.5.

    As a US citizen, all my lump sum from my pension would also be taxed, whereas it’s tax-free in the UK so, again, will be facing double taxation. This is really really unfair!

    It breaks my heart but the more I consider it, the more I believe that renouncing would greatly simplify my life. I hate so much that it’s come to this.

  15. Wow, MonaLisa, that’s a huge statement coming from you! Like you, we all hate that it has come to this. This betrayal by our country of birth is creating anxiety–and animosity throughout the world–throughout the world.

  16. @Just Me

    Just one example of why I don’t trust the US to change their “laws”, whether taxation, citizenship, etc., from year to year to year. Get my family out of the craziness. Complete bumbling.

    Such persistent uncertainty about the future availability of the R&E credit diminishes its incentive effect as taxpayers often do not know if they can depend on the credit when making decisions on future investments in research and development,” he said.

    Shulman noted that President Obama has proposed making the R&E tax credit permanent to eliminate such uncertainty from year to year and make it more effective.

    The retroactive reinstatement of tax provisions also adds risk to the system, Shulman noted, while creating confusion for taxpayers and making the provisions difficult for the IRS to implement.

    “We have seen provisions expire for almost an entire year, only to be reinstated at the end of the year,” he said. “While the IRS muddles through and does its best by rushing through revised forms and instructions, last-minute retroactive extensions cause significant taxpayer confusion, with a clean-up that often drags on for many months.”

    One prominent recent example, he noted, was the expiration of the estate tax at the end of 2009, which was then reinstated at the end of 2010.

    “Upon reinstatement, Congress gave taxpayers the option of using either the 2009 or the new 2011 rules for 2010,” he said. “This kind of result is not optimal.”

    Congress’s habit of passing legislation with immediate effective dates also adds operational risk for the IRS and makes it difficult for taxpayers to plan properly to take advantage of the tax benefits. When the effective dates are set far enough ahead, the IRS has more time to develop the necessary guidance and instructions, and implementation can go more smoothly, Shulman noted. The IRS can set up customer service operations and put in place the appropriate compliance systems to keep people from gaming the system.

    A year ago, Shulman added, the IRS was forced to delay the opening of the tax filing season from January 14 until February 14 because of late tax law changes. “That meant 6.5 million people, including schoolteachers who wanted to take a deduction for classroom supplies that they paid for themselves, had to wait an extra month to get a refund,” he said. “In any public policy arena, policymakers should strive to give those implementing a law enough time to do it right.”

  17. @calgary411

    Amen… We are a nation of laws says 30 year vet, and often they are retro-active or buried so deep in amendments and legalese that no one can figure out what they mean. It is total madness now.

  18. Thanks Just Me for the post!

    It’s brilliant, and it underscores the utter insanity of this. It also reinforces how unbelievably short-sighted, egocentric and chauvinistic the US is, and IMO always has been throughout its history, in setting policies without a second’s thought for how bad it could become if carried to a logical conclusion, and how horrible its consequences (intended or unintended) can become through “collateral damage” to bystanders who weren’t the intended target (fat cat tax cheats, most of whom live in the US and hide their money elsewhere, and some of whom I strongly suspect have offices in the US Congressional and Senate Office Buildings).

    Sadly, and perhaps unfairly though I don’t think so, I think that if you showed this story to many Americans, their mass-media-crap-addled attention spans wouldn’t get them past the first screen page. Or they’d think you’re some kind of communist/terrorist subversive for posting something like this. I hope I’m wrong, and it’s worth a try passing a link to this to any American-resident American citizens and voters whom you think might have a chance of “getting” the point. But I’m not holding my breath that enough of them will listen to make a difference. I long-ago lost my faith and trust in the collective judgment and wisdom of the American people, though I retain great respect for the individual judgment and wisdom of some Americans I know, but not a lot of them. I have to add Mr. Sundberg to that short list. I tip my hat to him. Especially with his impressive resume.

  19. @Just Me — thanks for this post and for all you’ve contributed for us. Thank you Mr. Sundberg. Can anyone not read this and come to the logical conclusion?

    Right, Shubert, one word — BRILLIANT.

  20. @mark – yes they do. You are confusing “citizens” with “residents”. Brazil does tax RESIDENTS on worldwide income. But a Brazilian citizen can go to another country and no problem!

    in ingrês: http://www.worldwide-tax.com/brazil/brazil_taxes.asp

    em português:
    http://www.portaldeauditoria.com.br/noticia/irpfestrangeiros_200307.htm

    This one is directly from the Receita (Brazilian IRS):
    http://www.receita.fazenda.gov.br/legislacao/rir/livro1.htm
    “Art. 2º As pessoas físicas domiciliadas ou residentes no Brasil, titulares de disponibilidade econômica ou jurídica de renda ou proventos de qualquer natureza, inclusive rendimentos e ganhos de capital, são contribuintes do imposto de renda, sem distinção da nacionalidade, sexo, idade, estado civil ou profissão (Lei nº 4.506, de 30 de novembro de 1964, art. 1º, Lei nº 5.172, de 25 de outubro de 1966, art. 43, e Lei nº 8.383, de 30 de dezembro de 1991, art. 4º).”

    Roughly translated, they don’t give a crap about your nationality. If you live in Brazil for more than 183 days, you have to pay up.

  21. @mark, I read the rest of your post. Yeah, you’re right, but they tax everyone in Brazil, not just Brazilians. Oh hoooooww I would LOVE to live here so much and never pay any taxes! That’s never going to happen!

    BUT back to what I was saying – Brazil has something like the FBAR, but it is for only R$ 100,000+ I believe. They obviously want to monitor things to see if you have unreported income.

    In the naturalisation documents there are questions about assets abroad. This is a little scary for me since in some cases, certain “exemptions” will not be granted if you have a lot of assets.

    But with the value of things nowadays of things in Brazil, it’s making my US assets look small!

  22. @geeez & Mark

    Its actually pretty normal for a country to tax all of your income worldwide whilst resident. France does this and the US and Brazil obviously do as well. The UK does this too, but there is the option to be a “non-dom”, or non-domiciled, which means that you only pay tax on your earnings in the UK. Yes, you guessed right, this is probably why there are so Russian billionaires and Middle Eastern Princes in London…

  23. Yes, @ Don, but if you decide to be non-domiciled for tax purposes and not pay UK taxes on your worldwide income, you have to pay an annual charge of I think 30,000 quid!! Obviously chicken feed for the super rich which could explain why so many billionaires from abroad are buying up property there.

  24. @monalisa

    Read about that yearly surcharge awhile back – I bet that Abramovich and Lord Ashcroft are terrified 😛

  25. Since we’re discussing crazy scenarious, imagine a whole bunch of American millionaires run away to Canada … why somebody would do that is beyond me considering our tax rates.

    After 183 days these people are considered deemed residents of Canada … hello tax man!

    On the other hand if you are considered a resident of a country with which Canada has a tax treaty (like the US), you may be considered a deemed non-resident of Canada for tax purposes. Isn’t Canada nice?

    What if there are Americans hiding in Canada who have arrived in the last 6 months to 2 years? Could Canada use these people as negotiating tools to free dual citizens from the IRS? They could say these millionaires now belong to Canada for tax purposes since they are resident here. Or you could have them back if you let all our dual citizens renounce easily without having to do tax returns or file FBARS. Hmmm….

    This scenario could probably only exist in my head since our tax rates are so high but you have to wonder …

  26. @OMG: The other alternative is one suggested by a Queen’s University professor. Require Canadian celebrities like Celine Dion, Michael J. Fox, William Shatner, Jim Carey, Justin Bieber, Donald Sutherland, Christopher Plummer, Rachel McAdams, Wayne Gretzky, Sidney Crosby (and all other Canadians on American hockey teams!), etc. to report their U.S. assets and income to Canada. If they don’t, their financial institutions will be required to do so under FATCA “reciprocity.” The celebrities will then be penalized a large % of their assets which were earned and taxed in US. Penalties on Celine Dion and Justin Bieber alone could probably make a huge dent in Canada’s deficit. With penalties on the rest, Canada could expand and introduce programs to benefit Canadians at home and around the world.

    The outcry from them–and from the US–would be fast and furious. Maybe this issue would finally get the attention it deserves from American media.

    I don’t think the Canadian government would ever consider that–because they have too much respect for their citizens–regardless of where they choose to live!

  27. Almost everyone in America likes Canada, Gallup poll finds

    “You’re never attacked any of our embassies, you don’t want to direct any missiles at us and unlike the southern border, there are no problems with organized crime or drug crimes — you’re peaceful and stable. What’s not to love? Our love is genuine.”

    http://www.thestar.com/news/world/article/1133115–almost-everyone-in-america-likes-canada-gallup-poll-finds

    Quick somebody tell the Treasury and the IRS to lay off us loveable Canadians!

  28. @OMG: Douglas Shulman, Emily McMahon and the rest of the IRS gang must be the 4% of Americans who don’t like Canadians! They especially don’t like Jim Flaherty, Mark Carney and Isaac Brock. Of course, Isaac Brock has been dead for 200 years–but his spirit is being reincarnated through all of us.

  29. @Mona, I have known of several Brits that don’t pay taxes back in the UK, but they REALLY live overseas for more than half the year.

    I think in many countries – the UK, the USA, Brasil (because my wife complains a lot! :-)) – there are high taxes, but people don’t see a return on the money. I think really, if the UK and US cut off these people that are addicted to welfare, and Brasil starts distributing some of its 300 Billion USD surplus, people in those jurisdictions may become “happier”.

    The central theme I have learned from living in several countries is this: “If the government can show effective management and redistribute tax proceeds accordingly, the populace is generally content.” In the end, people elect the government to manage public finances. They are supposed to do their job effectively!

    This means the Ferraris that the Portuguese PM bought with public funds is UNACCEPTABLE. The same goes for the LED TVs that the American politician bought with public funds, or the Brazilian politician that Dilma caught and threw out because he was stealing money. This is GLOBAL. People are fed up with corrupt people around the world. Time to dawn you Guy Fawks mask. — When the US points the finger at me, they TRULY have 5 fingers pointing back at them

    The time is now to draw attention to corrupt (buyable) politicians. First, you “clean” America, then the rest of the world will be cleaned by their own populace.

  30. @DonPomodoro:

    I heard that North Korea also taxes its “expats”. I imagine that this is because North Korea does not recognise the right to emigrate, so this means that their tax code is written such that all North Korean citizens pay tax. … I will ask what the compliance rate with the Eritrean taxes amongst their expats is like. I would imagine that it is rather low, but, then again, you also read about Eritrea threatening family members back in Eritrea if you don’t pay, so who knows.

    North Korea gets compliance from their “expats” in Japan the same way. Apparently they don’t tax them directly but they expect them to send remittances to relatives in NK, which then get converted from hard currency to NK won at the official rip-off rate. (There are a few other countries which do something similar — don’t tax expats directly either, but do tax remittances from overseas. I think Haiti is one, but I’m not too sure).

    The sad thing is that geographically, most of the Koreans in Japan are from the South, but many chose NK nationality after WWII because NK was more industrialised back then, so it was richer and more money to spend on diaspora support (schools, etc.). Originally these Koreans had no relatives in NK, so NK had no hold over them. They were “expats” only in a paper sense. But then in the 60s, NK — with the tacit approval of Japan and the US — encouraged NK citizens in Japan to “repatriate”. So from then on they had a very easy way of blackmailing their relatives who had stayed in Japan. The famine of the 1990s was actually a sick blessing in one way: if your relatives died or fled the country, you were finally free to stop sending money and to switch to South Korean citizenship.

  31. No, recently I consulted a Tax Lawyer in Brazil. If you are a Brazilian living in another country you don´t pay income tax on your earned income in the other Country. There are hundred thousands Brazilians alien residents working in other countries and they don´t have to file Income Tax in Brazil unless they have property or income from investments in Brazil. Insofar as alien residents I am not sure but if they are living and working in Brazil most likely they have no earned income in other countries. They will be treated as Brazilians living and working in Brazil. If they have income from investments in others countries they will pay taxes in Brazil if the taxes in Brazil are higher than the ones in the others countries. The difference. Brazilians and alien residents in Brazil must declare every year if they have more than 100.000 dollars invested in another country. They are not charged tax on that by the Banco Central. Of course in order to come clean they must declare this in the Incoma Tax Return and follow what I said above.

  32. Pingback: FATCA Take II: Finding U.S.Tax Evaders Abroad Gets Easier | The Isaac Brock Society

  33. Pingback: Who is a US Citizen? | The Isaac Brock Society

  34. Not quite the same as the US tax, but this may be the trend.

    If you move abroad as a tax exile to escape taxes and you want to remain French, then pay the difference,” he said, stressing that the measure would not target expatriates working abroad.”

    … under this, at least they would have a choice on remaining French.

  35. “…stressing that the measure would not target expatriates working abroad.”

    I don’t get it – Who does this target then? Just rich expats who move abroad or those based in actual tax havens? Average people have investments as well, no? Note that French citizens are the only ones in the world who are subject to income taxes at French levels if they move to Monaco (nobody else pays income tax there), so that “tax escape route” is already closed to them.

    I really feel for any French citizen overseas, because now it looks like both the left and right are going after them. Hollande’s party wanted to implement a “solidarity tax” on earned income along the lines of the Eritrean one awhile back. When I lived in Germany there was a citizenship-based taxation bill going around as well (eventually defeated or ignored I believe). At least EU citizens can’t be double taxed in this way if they live in the EU, but that protection is gone for those based elsewhere. French citizens overseas are properly represented with extra-territorial electoral districts, so I imagine that any attempt to implement such a measure would at least be up against a big fight.

    I am becoming more and more convinced that the ‘best’ citizenship to have as an ‘expat’ is from a wealthy, medium-sized country like Austria, Switzerland, Netherlands, Luxembourg, Belgium and so on, because only larger countries could ever get away with bullying their own diaspora overseas like the way that the US does. Seems like it is best to work in one of the G8 countries but be a citizen of one of the above. What a mess that the world will be become if everyone wants to turn into a mini USA..

  36. @ Calgary441 and Blaze…

    Yea, but…. 🙂

    Once they start down that route of looking to expats for tax, there is no restraining politicians, be they American or French! It is a force of nature, the desire to tax someone else. Heaven help the French if their homeland politicians start casting they eyes onto their Expats. It will be interesting to watch and see what happens.

    PS, I have heard rumors from a DC source, that the Australian policy makers are also looking into Citizenship taxes of some form. That is a rumor, so I hesitate to mention it, but you have to wonder how many other countries are out there thinking about this now. It has to be tempting…

  37. Wouldn’t it be hilarious if Mexico imposed citizenship based taxation on all the illegal aliens in the US?

    They could recruit American banks to collect the taxes!

  38. @omghe’sstillanamerican

    Too funny!!! Spend a weekend south of the border and you hear so much about the “illegal alien” issue. How I would love to see Mexico pass a law that involved the American banks needing to report to the Mexican tax department. I can just see the headlines!

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