Welcome to Berlin, Yankee! Hope You Brought a Mattress for Your Money!

There are an estimated 7.6 million Americans living in foreign
countries, give or take. They come in all shapes and sizes, but
there are some broad types—young people in their 20s flinging
themselves into the world to teach English, work for nonprofits,
start businesses and/or seek adventure; peak-age professionals
working for international companies or institutions; U.S. military
personnel and their families; dual passport-holders more tethered
to their second nationality; graying bohemians who never figured
out how to go back; and even the occasional
retiree making their Social Security checks go farther.

Generally absent from the expat cohort are the
Mitt Romney-style super-rich who were the target of the

Foreign Account Tax Compliant Act of 2010 (FATCA), a terrible
law that forces all Americans (and their spouses) with
foreign-based financial holdings of more than $10,000 to engage in
absurdly detailed IRS reporting or face punitively steep penalties,
while also forcing foreign financial institutions to rat on their
American clients and even perform collections on behalf of Uncle
Sam. All for the prize of collecting a very small sum in extra tax
receipts—an estimated $1 billion or so per year, or enough to fund
the federal government for about two-and-a-half hours.

The super-rich have reacted like the super-rich do: either by
complying (why not, they’re rich!), or by parking their money into
what few countries and institutions that still refuse to do the
bidding of the Internal Revenue Service.

But what about our initial groups of expats? They’re screwed, as
a new Wall Street Journal
report makes infuriatingly clear. Excerpt:

It isn’t what William Hart expected when he moved to Berlin from
North Carolina nearly four years ago. This spring, the 24-year-old
e-commerce analyst said he was rejected for an online brokerage
account by Deutsche Bank AG, although he has a checking
account there and worked as an intern at the company. In addition,
a smaller local bank turned him down for an online checking
account, and he says Wells Fargo & Co., his U.S.
bank, closed his brokerage account when it learned he lives in
Germany. […]

“I seem to exist in a no-man’s-land,” said Mr. Hart. “Can it
really be that expats are facing such massive obstacles in basic
financial matters?” […]

Among those affected by the tightened policies are retirees of
modest means in communities around Lake Chapala in Mexico, where an
estimated 10,000 Americans live. “It hit people out of the blue,”
said Ann Lewis, 75, a former small-business owner from New Jersey,
who was notified in late May that her account with Banamex USA, a
unit of Citigroup Inc., would be closed this past June
30. […] Ms. Lewis said she found Mexican banks expensive and
harder to work with: Checks can take weeks to clear while exchange
rates fluctuate, she said, and wire transfers can each cost $45 or
more.

Judith Furukawa, an American living in Dubai who has been an
expat for nearly 15 years, is willing to pay fees to wire money
from her U.S. account in Pennsylvania—but her U.S. bank no longer
accepts wire requests from overseas.

Americans abroad are also encountering troubles with U.S.-based
investment accounts. In recent months, firms including Fidelity
Investments, Charles Schwab Corp., T. Rowe Price
Group Inc. and others have told overseas investors and
advisers they may no longer buy or trade mutual funds.

For Allen Cutler, a U.S. citizen who has lived in the
Philippines for 30 years and said he had an account at T. Rowe
Price for two decades, the restriction is “very unsettling, leaving
me with the feeling that more is to follow.”

Whole thing here.

All of this was 100 percent predictable at the time of the law’s
passage, and has been very well covered in the press (including the

news that as of today, the application fee for revoking U.S.
citizenship—which record numbers of Americans have been doing—has
been jacked up by the federal government from $450 to $2,350).

The plain truth is that U.S. politicians just do not care that
their invasive laws screw over many millions of Americans while
gratuitously pissing off friendly countries and foreign investors
in the United States, all for the joy of funding the federal
government for half an afternoon. Repealing FATCA should be on the
front-burner of any politician claiming to stand for limited
government.