A conversation yesterday at lunch at the trendy club 55 Beach in Saint Tropez was edifying in the sense that important American and European investors living in Europe sitting around the table, all of whom supported Donald Trump for the presidency, are now waking up to the fact that the drastic downturn in support for this president will probably lead to the pendulum going much too far in the other direction — that is to say in the direction of finding ourselves with a too far left of center government. This will mean that the conservative agenda is now at serious risk and that the short complacency with the Trump presidency can boomerang into longer term increases in taxes, social spending, even greater deficits and government regulation.
This sampling of businessmen and financial leaders concluded that the weak and terribly ineffective leadership of the Trump administration in the face of the coronavirus pandemic in the United State, the continual friction with past senior advisors and the blurred connections between the president and the foreign policy and intelligence agencies, has taken the acquiescent traditional Republican establishment out of closet with a bang. What had been passed over, the withdrawal and confusion of American leadership in the world and in world organizations, the discord between the president and the foreign policy establishment, the political focus on a wall, obsession in denigrating, even three years after the election, Barak Obama and Hilary Clinton and the betrayal of certain conservative values with the one exception of the tax cut, have all become major irritants to traditional Republicans. It is dawning on at least these Republicans that the Trump takeover of the Party has meant that all the conservative eggs have been placed in one basket, and that basket may have leaks that lots preferred to ignore.
And the awareness that Trump is not defending traditional conservative values is something all the more apparent when it comes to Americans living overseas, because the one single most important issue to them, and also American commercial interests abroad in general, was and is the president's failure to adhere to the Republican Platform promise to repeal or abrogate FATCA (Foreign Account Tax Compliance Act) promulgated by the Obama administration. This is the law, that to satisfy the notion that U.S. citizens abroad escape U.S. taxation, unfairly discriminates against them by denying the right to privacy in their banking choices and requires foreign banks to effectively act as IRS agents in disclosing systematically American bank accounts.
The law considered by two French Parliament members as "banking injustice," allows U.S. authorities to impose sanctions on foreign banks that refuse to transmit data on U.S. citizens living abroad. As a result, banks outside the United States are unwilling to accept customers with links to the U.S. because they fear that the inadvertent administrative failure to disclose information can result in extraordinary penalties. It is to be kept in mind that banks throughout the world are only required to perform these tasks of reporting and in a certain sense surveillance with respect to a citizen of the United States and that the U.S is the only country in the world that taxes its citizens on their worldwide income. It is also to be kept in mind that U.S. courts have imposed penalties on foreign banks where U.S. laws have been violated in the tens of billions of U.S. dollars and that the United States can impose restrictions on banks trading in any dollar-based securities.
Americans overseas, who number more than 8 million, more than all but five States, should be able to rely on a Party Platform. They should also be able to rely on the over 50 Republican overseas associations that initially took up the fight against this injustice, but when they perceived that their leader Mr. Trump dropped following through on this objective, virtually abandoned the foremost concern of all overseas Americans.
This is an example of how those under the spell of the personality cult of the individual in power can kowtow to his personal prerogatives to the detriment of their own interests.
The Trump administration's refusal to follow through on what hurts not just Americans individually but the commercial interests of enterprises that seek to market products, join in industrial projects and establish financings of private and government programs was and is of special concern to those attending the lunch this weekend. It is indicative of an overall refusal or inability of the Trump administration to take into account and to respect, the interests of the Trump electorate itself.
When Republicans in both houses of Congress expend most of their energy on debasing those on the other side of the aisle and allow inefficiency at best, divisiveness at worst, to infect U.S. departments and agencies, the supporters of the party and its conservative principles become disillusioned and, in a certain sense, disenfranchised. They see a danger in the objective to protect the general interest and to encourage and enhance the work all of those good men and women in government who need to be mobilized to make America great and today, especially, to combat the coronavirus.
Democracy depends on voters who understand and then get out and vote for candidates who are most capable and most committed to the defense of their particular interests, those of the political party to which the voter is affiliated and then, of course, what the voter and the party consider to be the general interest.
Note Republican Platform: "Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, FATCA not only allows 'unreasonable search and seizures' but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas."
Mark L. Cohen has his own legal practice, and was counsel at White & Case starting in 2001, after serving as international lawyer and senior legal consultant for the French aluminum producer Pechiney. Cohen was a senior consultant at a Ford Foundation Commission, an advisor to the PBS television program "The Advocates," and Assistant Attorney General in the Commonwealth of Massachusetts. He teaches U.S. history at the business school in Lille l’EDHEC. Read Mark L. Cohen's Reports — More Here.
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