Current Tax Reading

In 2009, the United States topped the list of countries that served as homes for private foreign deposits.1 The author notes an interesting phenomenon: while the United States causes foreign governments to lose tax revenue because their taxpayers use it as a tax haven, the United States is also the victim of an estimated $40 to $70 billion loss in tax revenue because American taxpayers use offshore tax havens.2 The United States has attempted to combat the use of tax havens through unilateral measures, such as the Foreign Account Tax Compliance Act (FATCA) and bilateral information exchange agreements, and through multilateral efforts spearheaded by the Organisation for Economic Co-operation on Development (OECD), and it does not seem to mind practising economic imperialism. According to the author, the United States should revoke the revenue rule, both from a moral obligation to aid developing economies in becoming self-sufficient and from a practical desire to receive reciprocal aid in collecting taxes that are being held overseas. According to the article, "[a] number of technical features of the Model I IGA agreement are structured to allow FATCA to become a global model. The model I IGA provides for only partial reciprocity between the United States and its partners: the US obligation to report is limited to those types of accounts on which the United States has authority to collect information under current US laws and regulations, whereas its partners are required to collect information on all income earned through financial accounts that are held by the US persons specified by FATCA. [...]when the United States and Switzerland agreed to facilitate FATCA compliance, the reciprocal automatic information exchange between governments was modified.