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Wealthy people are renouncing American citizenship

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Re: Wealthy people are renouncing American citizenship

#631

Post by mellavora »

ghaff wrote: post #499
emodendroket wrote: post #472

Earlier quoted context omitted.

The people who have complicated taxes also usually have complex income sources and generally higher incomes. If you just get your wage the tax forms are relatively straightforward. Being international complicates things but you'll notice people are talking about the headaches associated with running their businesses, capital gains, etc.

Yeah, while you could argue that the IRS should do pre-filled electronic returns, the reality is that if you have a W2 and a couple 1099s, doing your taxes is pretty straightfoward. As you say, it's more complex income sources and potentially deductions that lead to big accountant bills.

Or simply the fact of living overseas.

And you mention 1099s, i.e. self employed. Well, if you run a sole proprietorship as an expat, you still have to file US self-employment tax forms, and there are also QUARTERLY filing requirements with penalties for non-filing.

Or you need to get the paper certifying that your country has a totalization agreement with the US (not all do).

And since 1099 isn't a thing in EU, you have to file the US 'small business' tax form, which is actually 3-5 forms.

so as an expat, even what should be very straight forward turns into a massive mess.

Re: Wealthy people are renouncing American citizenship

#632

Post by anticristi »

rsstack wrote: post #473
aarchi wrote: post #454

Earlier quoted context omitted.

Well Germany also requires that you surrender other citizenships when you get a German citizenship, unless you are a German dual citizen through ancestry.

Imprecise but not incorrect: https://en.wikipedia.org/wiki/German_nationality_law#Dual_(o...

I heard rumours that this law is basically to put a thorn in the eye of Turkish immigrants minus what the EU does not allow. Is there any truth in this?

Re: Wealthy people are renouncing American citizenship

#633

Post by pacomerh »

BeetleB wrote: post #525
emodendroket wrote: post #321

Earlier quoted context omitted.

That’s a hassle but it seems hyperbolic to call it absurdly cruel and the other things people here are saying.

If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a ba…

I don't understand how the IRS can know what you do in foreign banks

Re: Wealthy people are renouncing American citizenship

#634

Post by jleyank »

gautamdivgi wrote: post #508
academia_hack wrote: post #42

It's so irritating to be an American that has moved overseas. Basically the only country in the world that charges taxes on money you make and spend somewhere else, just because of where you were born. Thanks to IRS regulations, 90% of investment firms will just reject me outright rather than deal with the paperwork. Getting someone to help file my inordinately complex taxes costs thousands of dollars more than I act…

Could it be because you're eligible for social security even if you don't reside in the US? I'm not sure about medicare or unemployment benefits.

My understanding is that US-ian expats can collect Social Security while outside the country (not sure if it can be deposited, as we're not doing that). Medicare has no meaning outside the US but we're eligible. Non- (and I assuming renounced) citizens can't get Social Security unless they live in the US, I think. And don't forget there's also a foreign tax credit as well as the Earned Income exclusion.

Re: Wealthy people are renouncing American citizenship

#635

Post by anticristi »

bee_rider wrote: post #496
andi999 wrote: post #106

Earlier quoted context omitted.

One should actually be a bit careful to state such intent. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)

From that article: "The wording of the statute is embarrassing. How can an alien renounce U.S. citizenship? In what capacity would said alien do so officially? One assumes that a court of law would find the language incoherent and unenforceable ... This is the way we legislate at 5 o'clock in the morning 4 days before adjournment." Nice to see lawmakers falling to the specter of trying to get that commit in for the n…

One could actually say they push code, although "code" in this context means law.

Re: Wealthy people are renouncing American citizenship

#636

Post by jleyank »

leppr wrote: post #606
mjevans wrote: post #563

Earlier quoted context omitted.

>>>>Protect by a world superpower military and diplomacy, >>That's the argument the British crown once made for taxation without representation. ... IIRC Those living outside of the US still have the right to cast votes for President, and are not compelled to pay non-federal taxes. An argument might be made for non-state citizens to at least have a single representative and senator they can vote for. >>>> (social pro…

> If you're also a US citizen, please vote to get this fixed. Where/how can US citizens vote to modify the social security system?

I thought US expats could vote where they last lived in the US in Federal elections... President, Senate and House.

Re: Wealthy people are renouncing American citizenship

#637

Post by skatkartoffel »

emodendroket wrote: post #472
ElFitz wrote: post #441

Earlier quoted context omitted.

From what I’ve read, the US is possibly one of the worst countries to have to file taxes with, paperwork-wise. And that’s for the simple scenario of someone actually living in the US. But is also is another issue altogether. How US citizens can bear with this and the lobbying that spawned it is beyond me.

The people who have complicated taxes also usually have complex income sources and generally higher incomes. If you just get your wage the tax forms are relatively straightforward. Being international complicates things but you'll notice people are talking about the headaches associated with running their businesses, capital gains, etc.

It doesn’t take much for an American residing abroad to have complicated taxes. I work a salaried job and am trying to save for retirement and that puts me into the complicated bracket because of the rules on pension taxation in my country of residence vs the US. Our options for investment are very limited, compared to every other resident of the country. My local brewery was doing a grassroots investment campaign and I couldn’t even buy £20 worth of shares to support them because as a US person that was forbidden.

Re: Wealthy people are renouncing American citizenship

#638

Post by mellavora »

jimkleiber wrote: post #282
academia_hack wrote: post #42

It's so irritating to be an American that has moved overseas. Basically the only country in the world that charges taxes on money you make and spend somewhere else, just because of where you were born. Thanks to IRS regulations, 90% of investment firms will just reject me outright rather than deal with the paperwork. Getting someone to help file my inordinately complex taxes costs thousands of dollars more than I act…

When I lived and worked in East Africa, I know that most, if not all of my income, was not taxed back in the US because of the Foreign Income Exclusion Act. Basically, for foreign earned income anywhere below ~$80,000 at the time, I didn't have to pay tax, which the limit is now around $108,000 or so. However, as you point out, that doesn't seem to apply to dividends and capital gains and other types of income [1]. I…

The problem isn't paying tax, it is

1) filing, which is enormously complicated, and 2) severe restrictions on what financial services you can access.

Re: Wealthy people are renouncing American citizenship

#639

Post by worik »

FACTA

Rouge state that is using its economic might (and implied brute force) to bend foreign banks to their nefarious will

For one thing they are cornering the market on industrial scale money laundering. Making American states the last place standing where unattributable companies can be formed.

End of empire - a dangerous time.

Re: Wealthy people are renouncing American citizenship

#640

Post by ucha »

azinman2 wrote: post #608
junon wrote: post #596

Earlier quoted context omitted.

Ehhh not sure about that. America doesn't have high taxes compared to many other places to live. This isn't as clear cut as I think you think it is.

Then you’re refuting the basic premise of the article, which is that the ultra wealthy want to avoid taxes. Why else would Eric Schmidt want to become a citizen of Cyprus, which then also allows him to live elsewhere in the EU? It’s certainly isn’t to end up laying more in taxes than he would in the US.

Being a citizen of Cyprus gives him visa free travel and work options in Europe. As he hasn't renounced US citizenship, he certainly isn't taking advantage of that for tax reasons. The article seems to imply otherwise, but that's basically what bad journalism is... strongly suggesting an incorrect interpretation of facts while still "telling the truth".
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