Sunday, June 8, 2014

The World According to FATCA, In 3 Maps

As of 8 June 2014, this is the world according to FATCA:

Countries that have actually signed an intergovernmental agreement.

Countries treated as having signed an intergovernmental agreement.

Countries with no agreement, actual or implied; FATCA applies unilaterally.

There really isn't any doubt that some of the poorest countries in the world will be most unfairly treated in any multilateral regime for global information exchange which excludes the United States because it acts unilaterally to attain solely its own goals, with no regard for the price others must pay or the appropriateness of imposing that cost where no wrong has ever been accused much less proven.

Prof. Karen Brown wrote an important and influential article in 2002 called Missing Africa on the topic of US tax and trade policy toward developing countries in general, Sub-Saharan Africa in particular. Her article starts with a quote: "We're the... United States. Do we need Africa?"' (from a former World Health Organization official who resigned over the lack of commitment to control AIDS in Africa).

Here the pattern repeats itself: even if they wanted to, many of the countries in the third map cannot forestall the present threat of economic sanctions. The United States simply doesn't need them. Yet many, many of these countries suffer far more from bank secrecy provided by the US and elsewhere than the other way around.

The unjustified and virtually-ignored perfection of US citizenship taxation is one part of FATCA's unexamined legacy, the dismantling of comity in international taxation another; so, too, the repeated exclusion of the developing world from an institutional order that is becoming increasingly unjust.

1 comment:

  1. There are positive developments. The world is becoming less dependent on the dollar over time, as the yuan is increasingly used in bilateral trade:

    >Unbeknownst to most investors, the yuan is already the fourth most liquid currency in the world. That's logical when you think about it. Only 3% of the world conducted trade in yuan in 2010, according to ETF Daily News. Today that figure is 50% and rising.

    >Washington views the dollar as a weapon but what they don't realize is that huge swathes of the world believe it's a liability. You will see everything from oil to soybeans priced in yuan as time goes on.,-doomsayers-0:--here-39;s-how-you-profit-200157367

    If Canada and Europe (including Switz.) can ease off the dollar and onto a system like this, the need to "comply" with FATCA will decrease, I think. This may have positive effects in the long term, incentivizing the US to adhere more closely to international norms, not just in taxation, but possibly also weights and measures, social policy, etc. It would be really great if we can get a transition like this.