Well, it’s a step in the right direction, but the execution is clumsy and some of its consequences are damaging and profoundly unfair. It should be reformed.The underlying issue is transparency in international banking. We currently have a situation in most advanced economies where poor people and small businesses pay their taxes and rich people and corporations don’t. This is one of the key reasons that the gap between rich and poor is growing so rapidly, to the point that it is beginning to threaten the social fabric.Look to the French Revolution to see what happens when a small group commandeers a nation’s wealth while the poor citizens suffer. This is a primary driver behind the rise of dangerous populism in the US and elsewhere. The last time this happened on such a scale was the 1930s…The main mechanisms for large-scale tax evasion are moving capital to low-tax jurisdictions and hiding behind overseas banking privacy laws. As an international community, we need transparent banking so all nations can begin to tax the wealthy. The alternative is rampant unfairness, where the poorest carry the full burden of the state. With the US being such an important market, they have used their muscle to begin breaking the logjam and take a first step towards transparency so the rich can’t squirrel away their money abroad and avoid paying their fair share.The problem is - they seem to have used a chainsaw where they should have used a scalpel. The US is the only developed nation that taxes people based on citizenship rather than country of residence, so expat citizens have to pay US tax as well as taxes to their country of residence. This is a crazy policy, but was unenforceable until FACTA secured the data from overseas banks.Now this bizarre law is being enforced. They have made life truly miserable for genuine expats who are living and working abroad. They have made business from US citizens so burdensome that most overseas banks and brokers simply turn it away. And expats are faced with the prospect of paying tax to both the US and to their country of residence, which seems grossly unjust, not to mention counterproductive.Making it impossible for US citizens to live and work abroad is a terrible idea. Apart from the infringement of liberty, it will reduce US soft power.FACTA is also damaging US relations with their allies. The US bullied overseas banks into providing the IRS with information, and secured agreement from participating Governments by promising reciprocity from US banks. There was never any real intention of reciprocating, so the arrangement is lopsided and and based on a knowing lie. US States such as Delaware are fast becoming the world’s most secure haven for tax dodgers, which is hardly a recipe for improving US prestige and influence.And there is also the issue of the Accidental Americans - people who were born in the US but who left as infants and have never lived, studied, worked or voted in the US. They are being hounded for huge amounts of back tax, and their lives are being blighted. The US has made it virtually impossible for them to renounce this accidental citizenship, so they are trapped. This is totally unjustifiable and a scar on the good name of the USA - especially from a country founded on the principle of “No Taxation Without Representation”. It’s very lucrative and the victims can’t vote, so Congress is cynically turning a blind eye and doing nothing to remedy the unfairness. Let’s call this by its proper name - it’s barefaced theft.As an international community we need to work together to deal with large-scale tax avoidance and tax evasion. The alternative is a world dominated by a tiny oligarchy of super-rich individuals and corporations. FACTA is an important first step, but it’s badly structured and needs urgent attention. Unfortunately this type of highly technical legislation is clearly beyond the capacity of the the baby Cheeto currently occupying the Oval Office, so don’t hold your breath.