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Why expat Americans are giving up their passports

bbc.com

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Re: Why expat Americans are giving up their passports

#41

Post by vetinari »

youngtaff wrote: post #33
madaxe_again wrote: post #17

So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "nor…

>He doesn't want his hard earned wealth pissed away by clueless bureaucrats. Yeh, but guess he likes driving on roads and making use of many of the other public services taxes pay for

Well, I guess that he cannot avoid the taxes on fuel either.

Re: Why expat Americans are giving up their passports

#42

Post by arto »

jacquesm wrote: post #32
arto wrote: post #26

For those looking to renounce their U.S. citizenship, Mike Gogulski has chronicled and documented the whole paperwork-heavy process on his blog: http://www.nostate.com/about/ In his case, after submitting the paperwork and burning his passport on YouTube, he chose to not get another citizenship, which means he's now stateless.

Being stateless is not a good thing. It might seem that because you're member of none you are superior to all but having citizenship is not just a tax burden, it also allows you to partake in a lot of activities (such as travel, commerce and so on). Getting bank accounts and other goodies when you're stateless is rather troublesome.

> Being stateless is not a good thing.

That's wholly a matter of individual preference. I know Mike Gogulski personally and I can attest to him being quite happy having made the choices he did, and no longer being part of what he perceives as an evil empire. The tax question never factored into his decision, it was moral questions that preoccupied him.

Re: Why expat Americans are giving up their passports

#43

Post by crdoconnor »

ascorbic wrote: post #34
crdoconnor wrote: post #13

>Her voice cracks and her eyes well up. She is in the process of relinquishing her American nationality. Soon she'll visit the US embassy formally to renounce her citizenship, she says, under duress. >"I'm very proud of being an American. It's what I am when I look in the mirror. >"If it weren't for Fatca [the Foreign Account Tax Compliance Act] and the decision by the bank, I'd never be doing this. Never ever. It's…

" Jane has lived and worked in France for 30 years drawing what she calls a "humble" salary. She has filed a tax return every year even though she earns significantly less than $106,000 a year." Hardly the 1%

She isn't the reason this article appeared in the BBC (it's effectively a reprinted press release, cf. Paul Graham's submarine).

She also earns a good salary and is dropping citizenship basically in order not to have to fill out a form once a year.

Either that or she's expecting a pay raise from her "humble" salary and will have to start paying a small amount of US tax.

Either way, my sympathy dial isn't moving.

Re: Why expat Americans are giving up their passports

#44

Post by jacquesm »

arto wrote: post #16
Swizec wrote: post #8

Earlier quoted context omitted.

Does it have such a premium? Having an EU passport works preeeetty well too.

Indeed: https://www.linkedin.com/pulse/top-10-most-powerful-passport...

And many countries have collaboration efforts going where one countries consular services will aid the citizens of another (usually neighbouring) country if they have no representation themselves.

For instance many EU countries embassies will give aid to the members of other EU states that do not have local representation.

One of the most important things embassies do is to give aid to citizens of their countries charged with crimes abroad.

Re: Why expat Americans are giving up their passports

#45

Post by madaxe_again »

youngtaff wrote: post #33
madaxe_again wrote: post #17

So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "nor…

>He doesn't want his hard earned wealth pissed away by clueless bureaucrats. Yeh, but guess he likes driving on roads and making use of many of the other public services taxes pay for

Actually, doesn't own a car, and spends most of his time in third world nations doing said philanthropy - but I'm not here to talk about his relative merits, just that fatca is ineffectual.

Re: Why expat Americans are giving up their passports

#46

Post by josh_fyi »

rtpg wrote: post #36
timthelion wrote: post #24

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a…

To my knowledge there's treaties with the vast majority of countries to avoid double taxation if you're not making more than a very large amount of money ( filed taxes last year and ended up with a giant goose egg)

There are treaties with some countries, but most of these treaties have "reverse loopholes." E.g., on any freelance income, a 15.5% Social Security tax from the first dollar, with no exemptions. Also, you pay the higher of both countries taxes for each kind of income. E.g., if the US has lower taxes than the other country in general, but higher taxes on cap gains , you pay the US the delta on the cap gains.

Re: Why expat Americans are giving up their passports

#47

Post by pmontra »

Every form I see about financial matters here in Italy has a checkbox that I must tick to state I'm not a US person. No financial institution wants to deal with them because of FACTA. An unintended consequence for sure and I hope they'll fix it. Still it's telling about the general attitude of lawmakers all around the world.

Re: Why expat Americans are giving up their passports

#48

Post by mbesto »

jacquesm wrote: post #12
peteretep wrote: post #3

America is one of the few countries that could get away with this, as being American has such a premium. It'd be nice to see them use their clout to force through legislation that stopped companies from playing silly beggars with their offshore profits if they wanted access to US markets.

What premium is that over say being the holder of passport from the UK, NL, DE, FR, ES, IT, CH, SE, DK, NO, FI, BE or any one of a host of other countries that don't have such crazy tax rules?

The US economy and quality of life commands that premium.

Note - My fiancee is British and I've lived for 4 years overseas in the EU (UK 3 years, DE for 1). As the tax code as an American begins to squeeze more and more, I've become more reluctant to "pay" that premium, but there are indeed aspects of American life and opportunity that don't currently exist in the EU.

Re: Why expat Americans are giving up their passports

#49

Post by girvo »

youngtaff wrote: post #33
madaxe_again wrote: post #17

So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "nor…

>He doesn't want his hard earned wealth pissed away by clueless bureaucrats. Yeh, but guess he likes driving on roads and making use of many of the other public services taxes pay for

I don't think madaxe_again is disagreeing with you there.

> and the evaders keep on evading

Re: Why expat Americans are giving up their passports

#50

Post by xxs »

toni wrote: post #31
masklinn wrote: post #19

Earlier quoted context omitted.

The problem isn't citizenship-based taxation, it's an odd concept but it's been there for a very long time, there's a relatively high standard deduction and IIRC your local income tax is also deductible. Expats have dealt with that for more than a century. As the article points out, the problem is FATCA which doesn't come close to fixing the issue it's supposed to fix (income tax evasion) and completely breaks expats…

Let's say I am an American citizen living in France. Why US government doesn't close a tax treaty with French and demand 20% of the total amount I pay for all the taxes annually in France?

Cause that's robbery.
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