Does FATCA Help or Hinder Effective Global Tax Governance?
Globalization and technological advancements have contributed to one of the more serious issues in the United States – offshore tax evasion. While it is difficult to estimate the exact amount of revenue losses from offshore tax schemes, the U.S. loses approximately $100 billion per year from offshore tax evasion. This problem was highlighted in 2009 when Switzerland’s largest bank, UBS AG, admitted to defrauding the United States by impeding the Internal Revenue Service’s (IRS) tax revenue collection from U.S. taxpayers and paid $780 million in fines, interest, penalties and restitution to the U.S. As of 2016, eighty Swiss banks paid more than $1.3 billion in penalties to the U.S. in settlements involving more than 34,000 accounts that held as much as $48 billion. The U.S. responded to the global problem of offshore tax evasion by enacting the Foreign Account Tax Compliance Act (FATCA) into law under section 501(a) of the Hiring Incentives to Restore Employments Act (HIRE), even though the U.S. had many successful attempts at reigning in the foreign banks that facilitated offshore tax evasion. The general purpose of the HIRE Act was to provide tax breaks to small businesses that hire unemployed workers. FATCA was designed to authorize the IRS to collect taxes on American income hidden in foreign nations. The substantial costs associated with FATCA compliance has proven to be a burden for many foreign financial institutions. Instead of punishing shifty taxpayers and corporations, the IRS misguidedly has placed practically the entire burden on Americans living abroad and on the foreign financial institutions where Americans invest and keep their money. FATCA affects all U.S. citizens who own a foreign financial account, including banking and investment accounts, regardless of where they reside. This article examines the numerous reasons as to why FATCA should be repealed
Year of publication: |
[2021]
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Authors: | Paul, John |
Publisher: |
[S.l.] : SSRN |
Subject: | Steuerpolitik | Tax policy | Welt | World | Steuervermeidung | Tax avoidance | Steuermoral | Tax compliance | Wirkungsanalyse | Impact assessment |
Saved in:
freely available
Extent: | 1 Online-Ressource (1 p) |
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Series: | |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 16, 2018 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013231264
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