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The Law That Makes U.S. Expats Toxic

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Re: The Law That Makes U.S. Expats Toxic

#61

Post by LunaSea »

mikeash wrote: post #41
matthewmacleod wrote: post #6

Earlier quoted context omitted.

Genuine question though – why should citizens living abroad (i.e. not using US public services) pay for those services through taxation?

They do use many US public services, though. American expats can still collect Social Security, still get to vote, still have their passport honored and renewed, are able to take advantage of US consular services, etc. They may use these services less, and certainly use a different mix than the average American living in the US, but it's not nothing.

Voting is not a service but a right and you'll have to pay for your passport renewal anyways [1]. What consular services did you have in mind that would justify this cost ?

[1] http://travel.state.gov/content/passports/en/passports/infor...

Re: The Law That Makes U.S. Expats Toxic

#62

Post by jmadsen »

mikeash wrote: post #41
matthewmacleod wrote: post #6

Earlier quoted context omitted.

Genuine question though – why should citizens living abroad (i.e. not using US public services) pay for those services through taxation?

They do use many US public services, though. American expats can still collect Social Security, still get to vote, still have their passport honored and renewed, are able to take advantage of US consular services, etc. They may use these services less, and certainly use a different mix than the average American living in the US, but it's not nothing.

sorry, but that's a silly answer:

- Social Security is collected on what I paid into the system while I was living/working in the US. Not a part of this

- Voting is a right - nothing to do with taxes

- My "consular services"? My passport renewed? I cost me $100 or something like that to get my passport renewed, and most of us never go anywhere near our "consular services" - I'm not even sure what they offer, except to business people over here via the Amer. Chamber of Commerce (which they pay an arm & a leg to join)

Re: The Law That Makes U.S. Expats Toxic

#63

Post by jawngee »

mikeash wrote: post #41
matthewmacleod wrote: post #6

Earlier quoted context omitted.

Genuine question though – why should citizens living abroad (i.e. not using US public services) pay for those services through taxation?

They do use many US public services, though. American expats can still collect Social Security, still get to vote, still have their passport honored and renewed, are able to take advantage of US consular services, etc. They may use these services less, and certainly use a different mix than the average American living in the US, but it's not nothing.

I'm an expat living in Vietnam, and all consular services cost money upfront. Collecting social security is collecting on the SS taxes you already paid, so it doesn't have anything to do with anything.

Trust me, it is as close to nothing as nothing gets.

Re: The Law That Makes U.S. Expats Toxic

#64

Post by Broken_Hippo »

Gustomaximus wrote: post #28
morgante wrote: post #17

It really doesn't make sense how the US is the only country which insists on taxing their citizens, no matter where they live. It makes American labor less competitive and promotes the insularity of American culture. I'm living abroad and you can definitely see the impact of the US tax system in the background of expats: Americans are severely underrepresented. The same salary, when offered to a British expat and an…

Not the only country. Norway will also tax citizens in certain circumstances. I believe though Norwegians can state they have left the country permanently (though can still return) and lose rights to social benefits such as unemployment payments until you have been working in the country again.

Since living in Norway, I've learned of this. It seems that the taxes are generally when you are making money from Norway - it is possible to get disability money from norway, taxed, and live abroad. You do lose the social benefit rights, but you keep your taxed income. My understanding is that they figured that in the long run, it actually saves the country money because of the lack of social services provided, and works out if one moves to a place with a strong exchange rate against the NOK.

Re: The Law That Makes U.S. Expats Toxic

#65

Post by junto »

onli wrote: post #22
pyvpx wrote: post #15

Earlier quoted context omitted.

I keep seeing people repeat this, yet I can't find any information to confirm it. you can become a German citizen and still retain your US citizenship, from everything I've read and everyone I've asked on the matter.

See http://www.einbuergerungstest.biz/einbuergerung-allgemein/do... . Germany does allow that only in special cases.

If renouncing is not allowed by the other country (i.e. Brazil), or if the renunciation is too expensive or difficult. I.e. you wouldn't want to go to Mogadishu to renounce your Somali nationality.

Re: The Law That Makes U.S. Expats Toxic

#66

Post by morgante »

onion2k wrote: post #49
morgante wrote: post #17

It really doesn't make sense how the US is the only country which insists on taxing their citizens, no matter where they live. It makes American labor less competitive and promotes the insularity of American culture. I'm living abroad and you can definitely see the impact of the US tax system in the background of expats: Americans are severely underrepresented. The same salary, when offered to a British expat and an…

It makes American labor less competitive That's the point. It means skilled American workers are less likely to work elsewhere, thus increasing the competitiveness of America by restricting the supply of skilled workers for the rest of the world. It might suck for individuals but as national policy it makes a lot of sense. Plus it raises more tax.

Most expats I know end up sending substantial sums back to the US, either directly or indirectly by moving back their and spending their accumulated savings.

Re: The Law That Makes U.S. Expats Toxic

#67

Post by ckozlowski »

deong wrote: post #37
rlpb wrote: post #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.

I'm an expat, and the quoted statement is nonsense. I'm eligible to vote in the US with an absentee ballot, and I have a congressional district based on my last address in the US. Certainly my representative doesn't particularly care, because there aren't that many of us living abroad, but to say I'm therefore without representation is no different than saying I'm without representation as an Atheist (my voting distr…

My guess is that the author was trying to say that we (I'm an expat as well, Germany) probably aren't a core constituency as some of our brethren at home might be.

Nonetheless, I still agree that it's incorrect, and strangely enough, I thought the author's own mention of the bipartisan support of FACTA reform is evidence enough of this. Spread out among constituent states, our impact is probably insignificant. On a national (federal) level, it certainly can be. We're large enough (as he notes) to be a significant body, and we have an oversized impact compared to the rest of the population with regards to how America is perceived in the rest of the world. It's good to know they're examining the issue. I'm sure it had good intentions in the beginning, and I'm confidant they can make some improvements.

Re: The Law That Makes U.S. Expats Toxic

#68

Post by deong »

TimSchumann wrote: post #38
patio11 wrote: post #4

Related 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 da…

> with $10k of financial engineering the problem goes away for forever As an American this upsets me greatly to hear. I feel it makes living abroad, especially to families of average means in this country, almost an impossible feat. I also wonder if only leaving the country for short duration vacation/business contributes to the "We're the best country ever!" mentality here and the "Wow, look at those weirdos over in…

If you're "of average means", then you can simply color within the lines, do exactly what the law tells you to do, and almost certainly have no problems at all. You only need the $10k to successfully cheat.

Re: The Law That Makes U.S. Expats Toxic

#69

Post by mikeash »

onli wrote: post #50
mikeash wrote: post #32

Earlier quoted context omitted.

That's a completely different issue, though. I live in the US and none of the electable choices represent me!

You have at least some which on paper are supposed to represent you and your region. Expats don't, and that was the point made in the article. The general issue of indirect democracy not representing the will of the voters is a fundamental one and not solvable, also goes to far for a discussion like this. Side remark: JFKs Profiles in Courage is a great book on the topic.

Yes, that was the point made in the article, and it's the point I disagree with. My members of Congress represented me just as much when I lived abroad as they do now. Expats absolutely do have elected officials who are supposed to represent them.

Re: The Law That Makes U.S. Expats Toxic

#70

Post by _rknLA »

rayiner wrote: post #40

Is taxing expats abroad really a problem? First, there is a large baseline exemption and most expats abroad don't pay U.S. taxes. Second, if you're intending to permanently leave the U.S. why should you keep U.S. Citizenship? And if you're intending to come back, is it really unfair to tax you? American citizenship has real benefits, especially if you're rich enough to pay expat taxes. The U.S. protects you and your…

The crux of the issue in the article's title assertion, that "US Expats are toxic" isn't because US Citizens personally have to deal with filing extra taxes; it's because the foreign institutions are also required to file paperwork and go through the hoops. I'm a US citizen living in Germany. When I open a bank account, the US doesn't "just trust" what I report to them, they also require the bank to validate my filings, creating extra paperwork and costs for the bank. Some banks in Germany will refuse to open accounts for Americans because the extra cost and paperwork tips the cost/benefit equation to the point where it doesn't make business sense to serve American customers -- they cost more to do business with than it's worth.

To address the "why should you keep US citizenship?" question: If you move abroad, you won't be able to get citizenship in the country that you reside in for a number of years (depending on where you go), and in many cases, your US citizenship is what makes it easy to get a work visa or residence permit in that foreign country in the first place. So, even if you actually intend to renounce your citizenship, you still have about 5-10 years of living abroad and dealing with the tax implications before you can become a naturalized citizen in the place that you move to.

I'm not trying to argue whether it's fair or unfair to impose the tax on citizens living abroad, just that the logistics don't make the proposal of renouncing ones citizenship so simple.

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