I just wrote about a conversation I had during a recent trip across Europe in which a banker friend described his firm’s growing reluctance to do business with Americans. The Wall Street Journal’s William McGurn provides more details about the policy, the Foreign Account Tax Compliance Act, fueling Europe’s growing distaste with America as a business partner, which has gone unnoticed by most Americans:
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).
McGurn focuses the rest of the piece on the impact this will have on Americans living abroad who are being passed up for promotions and jobs because of what their involvement would mean for prospective employers. Yet, as I understand it, this also has effects on American businesses. That means it’s not just American employees and individual clients that the world’s business now are seeking to avoid, but U.S. based companies. That’s a potentially big blow to Americans at home.
Look for more on this pernicious new policy—we need to fully understand its scope and how the growing reach of America’s regulatory and tax regime are destroying opportunity for Americans everywhere.