If you want to avoid tax cheats, get rid of the IRS and just get all your money from sale tax. Other than that, it's an invasion of financial privacy and everybody who vote for the law should be persecuted for treason.

John Matonis just wrote an article and addressed FATCA in it:

 - http://www.forbes.com/sites/jonmatonis/2012/10/04/bitcoin-prevents-monetary-tyranny

Forbes- "Bitcoin Prevents Monetary Tyranny"
 - http://bt.irlbtc.com/view/115445.0

Given the tremendous costs of compliance for even one countries FACTA-like laws, the chances of reciprocity actually happening seems very low to me.

Firstly, most countries don't have the ridiculous citizen-based taxation the US has, so there's nowhere near the same level of issues with foreign tax evasion. Secondly when US banks realize they've been signed up to figuring out the citizenships of every single one of their customers, they will squeal and the USG will let them off the hook. This will not violate any of the agreements that are being signed because they merely "allow" for information sharing, not actually require it, and agreements signed by the US Treasury have no force of law. Congress won't pass any laws that require US banks to give information to foreign governments, and other countries won't try the viral withholding tax trick either given the lack of incentive (point one).

At any rate, the impact of these sorts of tax issues on Bitcoin (and vice versa) is almost zero. You can't really hide assets in Bitcoin unless you plan to live your retirement largely within the Bitcoin economy, which would make you probably the most optimistic risk taker in the whole world.

The legislation applies to banks worldwide dealing with US Citizens.  Theoretically of course, other nations don't fall under US jurisdiction and wouldn't have to comply, but the USA has been strong arming countries around the world into compliance.  They've hit nearly every "tax haven" and convinced them that it's better to cooperate.  They have agreements from Switzerland, Panama, Belize, Caymans and most other well known offshore banking jurisdictions.

You reversed the letters.

Not FACTA - Fair and Accurate Credit Transactions Act of 2003
FATCA - Foreign Account Tax Compliance Act of 2010

 The US has so many laws they are running out of abbreviations.

http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)
http://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

An interesting factoid.  Belize has refused to comply with the provisions of FATCA.  They also don't respect the authority of any foreign courts when it comes to subpoena of financial information.

Oh damnit.  Sorry, and thanks for pointing out that my google-fu is weak (and also, thanks for linking to the appropriate "newer, actually new new law" in question)

... Bloody dyslexia.

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Edited to add:

more easy-good to remember more-better and fun-like if we call it:

FATCACTUS: Fair and Accurate Credit Transactions... (FATC) + ACT + US

I loled. Kudo's for such a great comeback after earlier epic sillyness

Edit: Oh, just saw the update. So basically you just exponentially increased your fail? Well, extra kudo's for that tbh!

I disagree and think the impact is material. Bitcoin is moving the Freeline in all three areas of cost (money, time and privacy) and therefore currently in charge of the currency market change.



FATCA increases the cost of using USD for both tax compliant and non-compliant by (1) increasing privacy and time costs by having to spend time filling out reports of foreign financial accounts and disclosing the balances. These costs are born by both the tax compliant and non-compliant.

In terms of money, for those that are non-compliant the penalties and increased probability of being caught evading taxes raises the cost or risk adjusted cost in terms of money. But even for the tax compliant Bitcoin reduces the money costs in terms of processing fees and risk adjusted counter-party risk (bank failure, MF Global type embezzlement, etc.).

Because Bitcoin is moving the Freeline and is in control of the currency market change therefore it will continue pulling in capital and increasing the network effects which increases the probability that you could 'live your retirement largely within the Bitcoin economy'.

Economics guides behavior and behavior shapes culture. Bitcoin has fundamentally changed the economics of the currency market and is begininning to have an effect on individual behavior. As network effects take place and individual behavior begins changing on an increasingly exponential scale this will result in a change of culture. And it is this fundamental change in economics that is the real threat from Bitcoin to the establishment.

Yes, 100 times. Also, any intimation of that threat by any establishment entity will only increase Bitcoin's viability and further decrease the value of their paper. For them to counter Bitcoin at all would require a scorched earth policy on the net. I don't think they're willing to do that yet.

Great job on Wenzel's show, btw. I think he'll come around if he hasn't already.