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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

#91

Post by binarray2000 »

jjoonathan wrote: post #73
binarray2000 wrote: post #53

You must look at it from the perspective of the Oligarchy: Wars, regime-changes, support to "moderate" forces, spying on the world just cost money. And you cannot afford all that by only taxing those at home. You need every dollar. So, you tax the expats (8.7 million of them!). They are abroad to work after all - they MUST have earnings. As an alibi for your new revenue source, you pass a new law (Fatca) while saying…

If you asked "Average Joe who is overworked, has two jobs and CC debt" how much he was concerned about the great injustice of requiring expats earning >$100k/yr in low-tax nations to make up the tax difference, you wouldn't get much sympathy. However, it wouldn't be very honest to attribute his lack of sympathy to apathy. I imagine he'd care, and that he'd find the present arrangement agreeable.

> attribute his lack of sympathy to apathy

I wrote "the Average Joe cannot think", not "the Average Joe doesn't want to think". Other than that, I agree.

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

#92

Post by deong »

morgante wrote: post #85
deong wrote: post #76

Earlier quoted context omitted.

You're right of course, but this is mostly by design. Rightly or wrongly, the US position is that you need to pay taxes to someone . I think the intent of the laws is at least arguably reasonable, but the execution isn't great. Assuming for the moment that the US isn't going to stop taxing expats on foreign income, I do think the exclusion limit is too low by about half. Making it more like $200k would allow more hig…

> Rightly or wrongly, the US position is that you need to pay taxes to someone. I think the intent of the laws is at least arguably reasonable, but the execution isn't great. You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate. > Making it more like $200k would allow more highly paid "normal workers" to avoid the penalty, while still hitting the very wealthy purely looking at the tax d…

> You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate.

Then you'd pay a proportionately lower rate for your US burden. The overall amount of tax owed should be relatively constant.

> I think a more thorough analysis of income sources is also in order

I suspect the issue here is the manpower required to do it and/or the potential for extra loopholes. Could I start a company in Singapore that just happens to derive all its income from US sources and has me as its sole employee? Taxing by amount makes a certain degree of sense in that regardless of shenanigans, if you get money at the end, we tax that money. (Though of course, we don't actually do this in the US with things like capital gains.)

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

#93

Post by negrit »

cwmma wrote: post #74
negrit wrote: post #24

Earlier quoted context omitted.

In France we have deputies(Kind of like congressmen in the U.S.) for expats. Deputies cover region of the world(Deputies for french citizens abroad). http://www.ufe.org/fr/vos-interets/representation-parlementa... They 'make sure' our interests as expat are being covered.

well you can do that because you have national elections, none of those in America as even the presidential election is technically 51 simultaneous statewide elections (well 50 + D.C.)

I must be missing something. I don't understand why not having nation wide election prevent the U.S. from having congressmen to represent those living abroad.

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

#94

Post by gambiting »

Amezarak wrote: post #87
gambiting wrote: post #25

I said this before, but I will say it again - as a child, I dreamed of emigrating to the US and getting a US citizenship. Nowadays, I would reject one if anybody offered, and if I had one I would denounce it. Like the article states - being American abroad is now seen as liability, and I am not surprised Americans living abroad give up their citizenship just to stop dealing with this nonsense.

I really find it hard to feel sympathetic about rich Americans (only applies to income of 100k+) paying no more taxes than if they lived in America (live in a country with higher income tax, pay US nothing, country with lower tax, pay US the difference.) This seems hardly worth 'denouncing' American citizenship. Can you explain? I feel like threads like these really illustrate the difference between someone on HN and…

It's not about America per se - I would feel the same way about any country. I live and work in UK while being a Polish citizen. If Poland now asked me to pay income tax in Poland based off my income in UK, I would be very very upset - I already pay income tax in the UK, so paying it twice sounds absolutely ridiculous. On the most basic level - Poland has absolutely no "right" to any of that money. I would denounce my Polish citizenship over this if that was the case. And US feels like they do have the right to the money of their citizens, even if they made it abroad. Every single person I spoke to about this said the exact same thing - the US tax system is stupid, and it's the example of US behaving like it owns the world and its own citizens. Just because it only targets "rich" people doesn't make it any less stupid.

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

#95

Post by ptaipale »

deong wrote: post #88
ptaipale wrote: post #47

Earlier quoted context omitted.

> there will be no difference except for inconvenience. There also appears to be a factor of risk. I'm not American but have had Americans in my team. A slight procedural error, either by themselves or by the IRS, can be a huge financial and legal problem, and expose the person to litigation. It seems draconian and unfair to me. Thus the practical consequences are more than minimal.

I actually talked with an accountant in the US my first tax year living year, and her advice was "don't use an accountant". I have no idea if this is true or not, but according to her, the IRS's view is basically, "we know this is complicated stuff, so do your best, and if you make a mistake, no big deal", whereas if you hire an accountant and get something wrong, the assumption is that you're trying to avoid taxes.

That advice sounds to me a bit like if you go on trial for some small thing (let's say a pub brawl), and you're told "don't get a lawyer, it will make you look bad".

Perhaps it is sometimes a good advice, but it can also be a spectacularly bad one.

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

#96

Post by masklinn »

patio11 wrote: post #52
masklinn wrote: post #39

Earlier quoted context omitted.

> The same salary, when offered to a British expat and an American, is much less attractive to the American because of the 30+% tax burden imposed. There's a ~100k foreign income tax exemption and many countries have tax treaties with the US which bypass even that and give a US tax credit corresponding to the already taxed foreign income. Big issues are there are constraints on the time you can spend in the US (too m…

Big issues are there are constraints on the time you can spend in the US (too much holiday there and you're not considered living abroad) Check with your accountant for an authoritative take on the following, but since I happen to be right with a certainty approaching "Gravity exists" I'll write the correction here: There exist two tests by which you can qualify for the Foreign Earned Income Exemption. One is the phy…

Thanks, I'd checked the IRS website a long time ago but I guess I missed the BFR, or assumed you had to fit both rather than either, I only remembered the physical presence test (which you can easily breach if you work in pretty much any EU country, if you spend all your PTO/vacation time back in the US)

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

#97

Post by onli »

mikeash wrote: post #69
onli wrote: post #50

Earlier quoted context omitted.

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.

> Expats absolutely do have elected officials who are supposed to represent them.

You yourself stated above that they don't?

I got your argumentation as "I never was represented anyway, so not being represented as expat did change nothing". But the difference is that the other americans have representatives that are supposed to act in their interests. Expats have only the afterthought of being american and that one could think about them sometimes, since they vote.

Who are the elected officials who are supposed to represent them? I do not think that there is one, that is not how your system works.

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

#98

Post by wobbleblob »

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 problem isn't just the taxing, you spend several days each year trying to report correctly the fact that you don't owe anything. If you make a mistake, the consequences may be quite severe, so it's safer to hire an expert. Outside the US, experts on US tax law don't grow on trees, so you spend a lot of money on this.

By the way, you speak of giving up citizenship like it's a small thing. Once you do this, you can never get it back.

'US Persons' in the context of this law is not the same as US citizens. It may include family members or business partners of citizens, or even of family members of former residents. It even affects many people who have no personal connection to the US, in some cases even people who have no right to enter the US without a visa if at all.

Fatca requires financial institutions to find and report any such US persons among their customers, and report their details to the US. This can be problematic, not just because so many US persons aren't even aware they are considered US persons, but also because in some countries banking privacy laws make it illegal for banks to record such information of their customers. These banks are now torn between following their local law and following US law. As a result, just offering certain services to US persons may carry a significant risk.

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

#99

Post by Spearchucker »

ckozlowski wrote: post #75
gambiting wrote: post #44

Earlier quoted context omitted.

Are you serious? To me, as a person from EU, it seems insane that a country where I haven't actually earned the money would want to tax it in any way or form. That's just ridiculous. You should pay income tax in the country where you made money. And why should I keep citizenship of a country that I moved out of? Because...I want to? Because I feel like a citizen of a country even if I live and make my living somewher…

A lot of what you ask seems that it could be a personal question depending on who you ask. I certainly wouldn't presume or preach to others with regards to how they view their country, however: 1. We (I'm an expat as well) pay little taxes to the U.S. because of the foreign earned income credit. The paperwork is onerous, yes. But it's not as bad as some make it out to be, unless you're in an exceptional income bracke…

It's more than residency, it's identity.

This is the part that often (note: not always) leads to valuing an American higher than a non-American. I have real problems with that. 911 is virtually celebrated, while larger tragedies the world over are not. What makes an American soldier's life more worthwhile than a baby born with Aids in some African backwater? If you believe all the flag-waving, nationalism. Otherwise media.

And I get that small number of deaths is a tragedy, a large number is a statistic. That doesn't change the reality - a life is valuable no matter who's it is, and where that person lives.

I'm a citizen of the world. I was born in Africa, have lived in the US, and now live in Europe. I rate myself as no better or worse than anyone else on this planet, including Americans. Most of all I'm insanely grateful to not be American.

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

#100

Post by mikeash »

jmadsen wrote: post #62
mikeash wrote: post #41

Earlier quoted context omitted.

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 t…

Just because voting is a right doesn't mean it just happens by magic. Elections are expensive and that money doesn't come from trees.
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