The Law That Makes U.S. Expats Toxic
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Re: The Law That Makes U.S. Expats Toxic
#2I suspect that the U.S. taxing its citizens abroad has a lot to do with it being the world's richest country and not wanting people (billionaires and such particularly) to be able to easily escape their tax burden by moving abroad.
Re: The Law That Makes U.S. Expats Toxic
#3The government's actual "solution" to this problem has been to raise the fee of renouncing citizenship, from $450 to $2,350. No problem for wealthy people who want to avoid tax, but quite a large burden on everyone else.
I plan to become a German citizen eventually, because I'm probably going to retire here. But thanks to Germany's disallowance of naturalized dual citizenship and America's tax complexities, that requires weighing a huge number of problems. At least my German bank (DKB) didn't kick me out.
Re: The Law That Makes U.S. Expats Toxic
#4Related rules have also made holding US accounts more difficult for Americans overseas. I had my retirement accounts frozen by their previous custodian: "Sorry, our regulator doesn't let us deal with Americans overseas." I'm unsure whether that was sincerely "doesn't let us" or meant "would require a paperwork burden we find unacceptable relative to the money you few guys make us" but either way I was given thirty days to move very-much-on-the-books money to another US financial firm.
It's annoying as heck, particularly as the burden falls mostly on folks who are coloring squarely within the lines. I pay enough for an accountant that I know with $10k of financial engineering the problem goes away for forever, which makes me think the guys with $30 million in untaxed capital gains that they're really worried about are probably not getting meaningfully inconvenienced by this policy.
Re: The Law That Makes U.S. Expats Toxic
#5Maybe I'm wrong, but america is not the only country who taxes globally. Spain is taxing globally also.
Re: The Law That Makes U.S. Expats Toxic
#6I suspect that the U.S. taxing its citizens abroad has a lot to do with it being the world's richest country and not wanting people (billionaires and such particularly) to be able to easily escape their tax burden by moving abroad.
Genuine question though – why should citizens living abroad (i.e. not using US public services) pay for those services through taxation?
Re: The Law That Makes U.S. Expats Toxic
#7"Unfortunately, no single member of Congress represents these American constituents who together would rank, if a state, 12th in population size after New Jersey and before Virginia. By virtue of living abroad, they are second-class citizens, paying onerous tax burdens without representation."
Compare this to Switzerland that considers its citizens living abroad part of the "fifth Switzerland" (there are 4 official language regions in Switzerland). They can vote online (in some Kantons/States) and participate in government programs to keep in touch with or learn about their roots. All without taxation.
Of course, people here complain about citizens living abroad voting in local elections... Representation without taxation!
Re: The Law That Makes U.S. Expats Toxic
#8"By virtue of living abroad, they are second-class citizens, paying onerous tax burdens without representation."
This seems pretty ironic to me given the "no taxation without representation" principle.
Re: The Law That Makes U.S. Expats Toxic
#9The government's actual "solution" to this problem has been to raise the fee of renouncing citizenship, from $450 to $2,350. No problem for wealthy people who want to avoid tax, but quite a large burden on everyone else. I plan to become a German citizen eventually, because I'm probably going to retire here. But thanks to Germany's disallowance of naturalized dual citizenship and America's tax complexities, that requ…
There's also an expatriation tax if your net worth is greater than a certain amount ($2,000,000) or you've averaged over a certain tax liability for the last five years ($139,000). The tax also applies to pensions, stocks, etc. based on their market value on the day you renounce.
Re: The Law That Makes U.S. Expats Toxic
#10"Unfortunately, no single member of Congress represents these American constituents who together would rank, if a state, 12th in population size after New Jersey and before Virginia. By virtue of living abroad, they are second-class citizens, paying onerous tax burdens without representation." Compare this to Switzerland that considers its citizens living abroad part of the "fifth Switzerland" (there are 4 official l…
I don't agree with what that quote is saying. Americans living abroad can still vote, and therefore are still represented. It's true that Americans living abroad don't all have the same representatives, since they're represented by the elected officials from where they're registered to vote in the US, but that's a far different thing from saying that they have no representation at all.