Tuesday, July 17, 2012
Wall Street Journal: Obama's IRS Snoops Abroad, by William McGurn:
Within the United States, almost no American has heard of it. Save for the occasional article, it's gone largely uncovered. And just like ObamaCare, the nastiest, job-killing aspects will not hit until after this November's election.
It's called the Foreign Account Tax Compliance Act, and it's a doozy. With little debate, Fatca was tucked into the Hiring Incentives to Restore Employment Act of 2010—a jobs bill dominated by tax breaks designed to get businesses to hire unemployed Americans.
Fatca was the revenue side of that bill. The theory was that we would pay for the tax breaks by making fat cats hiding money in their overseas accounts pay their "fair share." The reality is that the tax breaks did little to dent unemployment, and the legislation's penalties may end up killing more U.S. jobs than all the call centers in India combined. Delayed once already, Fatca is set to take effect in January 2013.
Strictly speaking, Fatca isn't a new tax—it's a new requirement for reporting overseas financial accounts, backed up by heavy fines. It requires foreign financial banks, investment houses, insurance companies, etc. to identify any Americans among their customers and turn over information about their accounts to the IRS (or to the local government, if that country has a sharing agreement with Uncle Sam). ...
[I]ndeed, in a paper called "Leveling the Playing Field," the White House says "the IRS will hire nearly 800 new employees devoted to international enforcement." It's safe to say that while we will see only a fraction of that $100 billion in revenue, we will bear the full price that a globally empowered IRS can inflict. ...
Whatever the ills of ObamaCare, we are at least now having a debate on the merits. How much better we'd all be if we could say the same about the Foreign Account Tax Compliance Act.