On March 18, President Obama signed the $17.5 billion Hiring Incentives to Restore Employment Act (HR 2487), or HIRE. On page 27, it includes an ominous provision that will affect Americans with foreign bank accounts over $50,000.
The Offset Provisions (Subtitle A, Foreign Account Tax Compliance) require foreign banks “to deduct and withhold a tax equal to 30% of — (i) any pass-thru payment which is made by such institution to a recalcitrant account holder or another foreign financial institution which does not meet the requirements of this subsection.” The banks must also provide full details about the nonexempt account- holders to the IRS. If the provision is deemed illegal by a foreign nation, such as, for instance, Switzerland, then the bank in question is required to close the account.
Accounts under $50,000 are exempt. Who else is exempt? Apparently anyone the Obama administration wants to be. Included in a section entitled “Exception for certain payments” is an exemption for “any other class of persons identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.” What are the odds that a telephone book’s worth of Democratic elites and their funders will be deemed “low risk”?
Americans have a choice: remain in the United States or follow their money elsewhere.