FATCA is Not the Answer

Abstract

This is a response to the February 26, 2024 article "Taxing Fat Cats Abroad," published in Tax Notes Federal.

This response explains:

1. The considerable differences between FATCA and CRS. They include FATCA's lack of reciprocity and the United States' refusal to join CRS;

2. The inequalities inherent in the U.S. tax system with respect to Americans living outside the United States and their discriminatory treatment;

3. The irrelevance of FATCA with respect to Farhy v. Commissioner and Bittner v. United States;

4. The unjust stigmatization of Farhy, Bittner, and all Americans living outside the United States;

5. Inconsistencies between the article's defense of citizenship-based taxation and the “single tax principle” advocated by professor Reuven Avi-Yonah;

6. The failure of the article, in its theorectical defense of citizenship-based taxation, to contend with the real system in place today and its myriad intractable problems;

7. The lack of any connection between taxation and voting rights;

8. The importance of 14th Amendment equal protection rights for Americans living outside the United States; and

9. That the 16th Amendment is not — and it should not be used as — a license to channel violations of constitutional and human rights through the tax code.

Keywords: Stigmatization, Prejudice, FATCA, CRS, Citizenship-based taxation, Equal protection, 14th Amendment, 16th Amendment, Discrimination, Constitutional rights, Human rights, Voting

JEL Classification: F53, G20, G21, G28, H20, H24, H26, H30, K33, K34