U.S. Government Tries to Mug the Mayor of London

It was only a matter of time before America’s
economic grab for global imperium, embodied in tax laws and,
particularly, the Foreign Account Tax Compliant Act (FATCA), ran up
against somebody who might actually be able to push back. Not
content to roll those who reside within its own borders, the
federal government insists that U.S. citizens and even long-term
residents who now live abroad and may not have had a glimpse of
amber waves of grain in many years owe Uncle Sam a piece of the
take—and that financial institutions around the world must snitch
on them to ease the mugging.

Such a broad definition of those subject to the IRS’s tender
ministrations reaches far and wide. It reaches so far that American
tax authorities say Boris Johnson
(pictured), the mayor of London,
owes capital gains taxes to the land of his birth, even though
he hasn’t lived here since he was five years old.

The thing about Boris Johnson, who
says he won’t pay, is that he’s not your average pushover for
the thugs who keep the U.S. government fat and happy. He’s not just
the mayor of an important city, but he’s a player in Britain’s
ruling Conservative Party, and
discussed as a potential future prime minister of the
country.

Perhaps ironically, the U.K. was once forced to spin off an
important North American subsidiary partially over tax issues. That
subsidiary appears to have learned the wrong lessons from the
unpleasant incident.

All of which is to say, while the U.K.
knuckled under to U.S. demands that it act as a deputy American tax
collector, Johnson is pretty well positioned to put a hitch in
that arrangement.

The question is whether Johnson, as a connected poitical figure,
makes separate peace with the IRS, emphasizing that the IRS’s reach
applies only to the powerless. That might have some interesting
international ramifications. Or will he carve out a wider exception
that gives others a little relief from America’s official
muggers?

Or maybe the IRS will just exercise America’s imperial muscle
and try to make even Johnson turn out his pockets to demonstrate
its power.