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Economics Discuss Fatca at the Political Forums; The provision commonly known as the Foreign Account Tax Compliance Act ( FATCA ) became law in March 2010, and ...

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Old 07-02-2014, 06:38 AM
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The provision commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010, and today, July 1, 2014, FATCA goews into effect. As a consequence, foreign entities that receive payments or allocations of certain U.S. source income generally will be subject to a new 30 percent U.S. withholding tax on such income unless such foreign entities comply with FATCA or otherwise are exempt from FATCA.

So now (as of today) all banks are supposed to keep track of every other bank and know who is and who is not in compliance with the FATCA law. Banks (that are in compliance) are supposed to withhold the 30% tax on any funds transferred with banks that are not in compliance with the law, otherwise they risk the withholding tax penalty themselves. That's a pretty tough thing to do given the immense amount of business that goes through the US banking system.

Obviously this law was designed to put some more tax money into the coffers, and it will probably do just that. But it will also create incentive for transactions to be done outside of the US banking system, and more specifically in currencies other than the greenback. Which in turn weakens the demand for the dollar. Like we really need a weaker dollar at this time?

This may not be a "camel's back breaking moment" but it's certainly a step.
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Old 07-02-2014, 08:09 AM
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Default Re: Fatca

Quote:
Originally Posted by squerly View Post
The provision commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010, and today, July 1, 2014, FATCA goews into effect. As a consequence, foreign entities that receive payments or allocations of certain U.S. source income generally will be subject to a new 30 percent U.S. withholding tax on such income unless such foreign entities comply with FATCA or otherwise are exempt from FATCA.

So now (as of today) all banks are supposed to keep track of every other bank and know who is and who is not in compliance with the FATCA law. Banks (that are in compliance) are supposed to withhold the 30% tax on any funds transferred with banks that are not in compliance with the law, otherwise they risk the withholding tax penalty themselves. That's a pretty tough thing to do given the immense amount of business that goes through the US banking system.

Obviously this law was designed to put some more tax money into the coffers, and it will probably do just that. But it will also create incentive for transactions to be done outside of the US banking system, and more specifically in currencies other than the greenback. Which in turn weakens the demand for the dollar. Like we really need a weaker dollar at this time?

This may not be a "camel's back breaking moment" but it's certainly a step.
Everything obama has done with regards to tax policy has had a negative impact on our dollar. We are fast becoming what Europe was back in the 70's and 80's, and soon the world will be using the Yen as the worlds currency.
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Old 07-02-2014, 08:28 AM
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Default Re: Fatca

Hmmm….

Perhaps illegal aliens sending American money back home to Mexico will be taxed at a higher rate…..


Interesting…..
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Old 07-02-2014, 09:04 AM
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Default Re: Fatca

Quote:
Originally Posted by squerly View Post
The provision commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010, and today, July 1, 2014, FATCA goews into effect. As a consequence, foreign entities that receive payments or allocations of certain U.S. source income generally will be subject to a new 30 percent U.S. withholding tax on such income unless such foreign entities comply with FATCA or otherwise are exempt from FATCA.

So now (as of today) all banks are supposed to keep track of every other bank and know who is and who is not in compliance with the FATCA law. Banks (that are in compliance) are supposed to withhold the 30% tax on any funds transferred with banks that are not in compliance with the law, otherwise they risk the withholding tax penalty themselves. That's a pretty tough thing to do given the immense amount of business that goes through the US banking system.

Obviously this law was designed to put some more tax money into the coffers, and it will probably do just that. But it will also create incentive for transactions to be done outside of the US banking system, and more specifically in currencies other than the greenback. Which in turn weakens the demand for the dollar. Like we really need a weaker dollar at this time?

This may not be a "camel's back breaking moment" but it's certainly a step.
And when the effect does damage, the White House will say, "We did not see this coming," and blame it on GWBush and the fat cat bankers they bailed out.
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Old 07-02-2014, 09:06 AM
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Hmmm….

Perhaps illegal aliens sending American money back home to Mexico will be taxed at a higher rate…..


Interesting…..
They will be taxed no differently than legal aliens doing the same thing.
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Old 07-02-2014, 11:30 AM
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Default Re: Fatca

Quote:
Originally Posted by squerly
But it will also create incentive for transactions to be done outside of the US banking system, and more specifically in currencies other than the greenback. Which in turn weakens the demand for the dollar.
That was the first thing I was thinking when reading up on it...

"If you do business under our regulations and rules, you will be punished."...

If that was directed towards me, I would simply stop doing business within that realm...
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Old 07-02-2014, 11:39 AM
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Default Re: Fatca

Quote:
Originally Posted by Dave1 View Post
Hmmm….

Perhaps illegal aliens sending American money back home to Mexico will be taxed at a higher rate…..


Interesting…..
And American citizens providing money to family.
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Old 10-17-2017, 11:45 PM
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Default Re: Fatca

The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, and intolerable.
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Old 10-18-2017, 07:53 AM
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Wink Re: Fatca

MrLiberty wrote: and soon the world will be using the Yen as the worlds currency.

More likely the yuan.
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Old 10-18-2017, 08:30 AM
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A wise and frugal government which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.
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