Is Fatca bad for medicine?

Fatca, the Fiscally Absurd & Tedious Counterproductive Administration, or (euphemistically) the Foreign Account Tax Compliance Act, is an example of United States government pushing others around, supposedly to find tax cheats.

In reality, Fatca hits everyone.  If you’re suspected of being an American living abroad, or if you’ve lived in the USA and moved out, and then receive ten dollars from Amazon, eBay or Vimeo, or any other online shop, affiliate scheme, or freelancing website, they will refuse to give it to you until you fill out intrusive paperwork.  That’s right, not ten thousand dollars, ten dollars.  They would probably do it for ten cents.

And, it will definitely hit you if you invest in medical research, or if you seek investors.

In India, people even feared that their pension accounts would be blocked.  That’s working pensions, not fortunes.

Theoretically, it shouldn’t affect you unless you have ten thousand dollars in assets.  Then again, many cars, and most houses, cost more than ten thousand dollars, so everyone will likely have that amount of money (at least in the form of a loan) some time in their lives. In fact, in the UK, a year’s tuition is about ten thousand dollars, and if you pay that by loan then you will have ten grand in your bank account.

So, every time an American born person opens a bank account, or even an affiliate account, or does anything else that could result in making a living, they get bothered with intrusive paperwork that others don’t have to do.

Real tax cheats, of course, know how to get around it.  There are exceptions in Fatca for certain kinds of financial trusts and other investments, that let the rich with good accountants circumvent it.  Ironically, it is only the working class and lower middle class expat who really has to worry about the FATCA law.

Americans have been renouncing their citizenship in record numbers in recent years.  Some may attribute it to the election of Trump, or to American foreign policy, but in reality the trend began when Fatca was announced.  Despite the rise in costs of renouncing citizenship (over two thousand dollars for the fee of the renunciation appointment alone, not including delivery fees, legal fees, and any other costs), the number of expats turning their back on their American citizenship continues to rise.

However,  countries that are tax havens do fear that Fatca could hurt their medical schools.  Many of their students, or prospective students, are Americans who study abroad, or are people who have accidental American citizenship.  With Fatca, Americans who leave the country have precious little privacy.  A poorly written article attempts to explain Fatca to people in Curacao.  All I can really gather from it is that Fatca is expected to have a negative impact on Curacao’s medical schools.

Worse, however, is the prospect that American money abroad will go underground, hidden in quasi-legal schemes.  This will have a negative effect on medical philanthropy, as any donations (or investments) could be seen as evidence of wealth, or even of foreign residence.  Fatca has inspired other schemes, such as the CRS, Crazy Reactionary Silliness, or euphemistically, the Common Reporting Standard.

FATCA and CRS are both likely to drive more money underground, or into real estate, precious metals and other static investments rather than philanthropy, investment and research.  As money goes underground, it will be less likely to find its way to legitimate charities and foundations.

Furthermore, doctors considering going to the USA (or other nations that mimic Fatca) are probably reconsidering when they discover that laws like Fatca will invade their privacy even after they leave.

So, yes, we do think that Fatca is bad for medicine.

Leave a Reply

Your email address will not be published. Required fields are marked *