Yet despite FATCA’s trillion-dollar price tag, the Wall Street Journal reports that the US government has taken in just $13.5 billion in revenue from hidden foreign accounts that FATCA is supposed to eliminate.
Obviously the cost vastly exceeds the benefit. It’s insane. Plus FATCA has driven nearly 15,000 Americans to renounce the citizenship since President Obama signed it into law in 2010.
These former Americans are often criticized for taking such a controversial step, one that is derided as being “unpatriotic”.
This criticism makes no sense when you take a larger view of history.
The State Department estimates that there are up to 6 million Americans living abroad.
Given the average size of a Congressional district at roughly 700,000 citizens, there should theoretically be eight members of Congress representing the interests of Americans living abroad.
Yet expats have no representation. There is not a single person in Congress fighting for expats, even though they are still subject to pay tax.
More than 240 years ago, residents of the colonies had a term for this. They called it “Taxation without Representation”. This idea is as old as America itself.
And in 1776, American colonists divorced themselves from the British government. Much of this was tax motivated.
In the Declaration of Independence, Thomas Jefferson expressly writes that among the reasons for independence is “imposing taxes on us without our consent.”
Former US citizens are following in these footsteps.
Maybe one way is that if you earn over X amount in wages or income, then file. Others who don't- exempt from filing the extr US papaers, only need to file in the country of residence.