The United States doesn’t like to be outdone by anyone, except when it comes to education, health care, social programs etc., but other than that we like to be number one.
Not to be outdone by those arrogant socialist countries long identified by the world’s elite as tax havens, the United States has rolled up its sleeves, worked hard and become the country of choice for the world’s wealthy to bring their money in order to avoid paying taxes on it.
Perversely, the U.S. is tax haven because of years of work by American authorities to crack down on traditional tax havens. In 2010, the U.S. passed the Foreign Account Tax Compliance Act, which requires banks abroad to report details about U.S. clients to American authorities. The U.S. carries enough global financial heft that the group that functions as a club for the world’s rich countries, the Organization for Economic Cooperation and Development, put out standard rules for reporting and sharing account information, spurred in part by the act. Almost 100 countries have signed on to those rules, called the Common Reporting Standard (CRS). Except, crucially, the U.S. Why not? Blame Congress, Dizard says:
While the US administration and the Treasury declared themselves all in favour of adopting the CRS, they do not have the budget authorization or appropriation from Congress to spend anything to do so. Therefore, while Switzerland set a deadline of January 1 2017 as the “effective date” for starting CRS-based tax information sharing with the other 95 signatories, the US Internal Revenue Service will not give its “reciprocal” partners any information about the foreign beneficiaries of any “entities”, such as Nevada or South Dakota trusts.
That sort of arrangement, where money and information flow into a country but are not shared, is the very function of tax havens: you reside in one country, but your money stays in another country, unknown and nontaxable by the government where you live. Congress could change this by passing a law authorizing and funding the IRS to share information with other countries under the CRS.
Instead of, “Give me your tired, your poor, your huddled masses yearning to breathe free…” we should probably change that to, “Give me your energetic, your wealthy, your upper classes yearning to be tax free…”