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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

#111

Post by cwmma »

negrit wrote: post #93
cwmma wrote: post #74

Earlier quoted context omitted.

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.

seats in congress are apportioned to states who then figure out how to divide them up, so while in theory a state could make an overseas district it's not something that could be done on a national level without some heavy modification to the constitution.

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

#112

Post by mike_hearn »

ckozlowski wrote: post #82
rurban wrote: post #56

Earlier quoted context omitted.

It is a big one. Many expats had to resign their US citizenship to avoid this silly law. Double taxation only exists in Aethopia and the US. Read this blog: http://www.overseas-exile.com/ Protection? Yes, maybe that's the reason. To support the US military efforts and budget. On a side-note: If I would applied to the US greencard, and then decided to move back to Germany, I would have to pay double income taxes. To G…

Not necessarly disagreeing, but when you say "many" (And that 266% increased made headlines everywhere), I feel it needs some context: 8.7 million abroad. 3,417 renounced citizenship. Or, .039%. I'm going to take a stab at this and guess that's some of the 1% right there who had millions stashed abroad. Maybe the tax law was painful to them, but for the rest, it's hardly a crisis.

The statistics on renunciations may not be correct. There are lists of people published who renounced, but every time I read a story about FATCA I keep coming across comments posting by people who claim they gave up their citizenship and never appeared on these lists.

The real question is how many people would like to give it up, but can't, because obtaining citizenship where they live is extremely tough and because the US is unusually vindictive towards people who try and renounce. They can even retroactively undo your renunciation if they decide you did it for tax reasons.

Seen from one angle, US citizenship looks a lot like modern slavery. You're born into it, it's difficult to escape, you get no benefit out of the relationship and no matter where in the world you run to your 'owners' will demand a slice of the fruits of your labours.

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

#113

Post by VLM »

mikeash wrote: post #36
lnanek2 wrote: post #23

Earlier quoted context omitted.

You seem to be agreeing with the quote. Note it doesn't say no one represents them. It says no single member. Influence spread across all members isn't really going to get much work done for them as if they had their own specific to their problems who considered it their job to represent them and talk about them, etc..

I agree with the first part and disagree with the second part. I agree that no single member of Congress represents these people. (Hard to disagree, since that's just a simple objective fact.) I disagree that this somehow equates to "without representation." We can do this for any issue which is not related to state/district borders. No single member of Congress represents urban Americans, or rural Americans, or WoW…

"No single member of Congress represents urban Americans, or rural Americans"

Clearly you are unfamiliar with the level of gerrymandering we have implemented, which makes it feel unfair when a distinct property owning group (say, retirees in Costa Rica) don't have their own gerrymandered pet politician just like the yuppies or inner city poor or rednecks have in congress.

Unevenly enforcing a corrupt system feels worse than merely having a corrupt system.

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

#114

Post by mike_hearn »

deong wrote: post #79
rurban wrote: post #56

Earlier quoted context omitted.

It is a big one. Many expats had to resign their US citizenship to avoid this silly law. Double taxation only exists in Aethopia and the US. Read this blog: http://www.overseas-exile.com/ Protection? Yes, maybe that's the reason. To support the US military efforts and budget. On a side-note: If I would applied to the US greencard, and then decided to move back to Germany, I would have to pay double income taxes. To G…

To be clear, you wouldn't actually pay double-taxes (I think -- if you make more than $100k, it depends on if the Germans and Americans have a treaty over it, but most countries do, I think). You'd have to file twice, but the US side would consist of forms that say you don't owe the US government anything because you already paid more to the Germans than the US would have charged.

Double taxation does happen pretty regularly, in particular, the USA often doesn't recognise various types of European investment and pension instruments and that causes complications. It's a really byzantine system that shouldn't even exist at all. People who live outside the USA get nothing from the US government, so they should pay no taxes. Every other country has this figured out.

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

#115

Post by seanmcdirmid »

deong wrote: post #26
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…

I'm also an American expat (Iceland), and for a lot of people, there will be no difference except for inconvenience. If you make less than about $100,000 per year, you exclude that income from US taxes completely. You still have to file a 1040, but you just declare the income on one line and negate it five lines later. You send the IRS the completed form showing you owe $0 and you're done. And if you make more than $…

You can't really work in Hong Kong, Singapore, or Switzerland making over $100k without milking the housing deduction given that income taxes are lower than the states.

If the country has no taxes, the foreign income exemption doesn't work. Also, it maybe doesn't work if you are going to get a job in Iran, Cuba, or North Korea...there are certain standards to meet.

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

#116

Post by mike_hearn »

michaelt wrote: post #86
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 really doesn't make sense how the US is the only country which insists on taxing their citizens, no matter where they live. Brit here and I disagree - the American system seems a lot fairer. Taxing on residency rather than citizenship creates a bizarre system where if you're a millionaire you can enjoy all the benefits of being a British citizen, but you can be "domiciled abroad" in Belize, Seychelles, Monaco, or…

I'm also British. The American system is insane and catastrophically unfair, which is why you keep seeing news stories about how horrible it is.

The British "non dom" system is unique to the UK and is not any particular feature of residency based taxation (which is how every country in the world works save America and Eritrea). And there are constant rumblings about abolishing it or reforming it. I suspect non-dom status will eventually go away, but residency based taxation will stay.

At any rate, no country other than America has any chance of implementing such a policy. To make FATCA work required one of the most draconian laws that's ever come out of a democracy. Most people don't understand it at all. The law says that every financial institution in the world must obey the USA. This is enforced by not only taxing US assets, but because many institutions don't have any US assets, forcing those that do to recursively apply penalties to all their trading partners who aren't in compliance. A big part of the cost of FATCA isn't even reporting Americans to the IRS. It's keeping track of every firm you trade with and whether THEY are reporting their customers to the IRS ...... and then violating your contracts with them by withholding payments until they fall into line.

I see a lot of people saying things like, well, the threshold is high enough that all I have to do is paperwork. Or "it doesn't seem so bad really". I find this to be naive. Here's what can easily happen next:

• The threshold is lowered. As expats have no meaningful representation or organisation as a group, taxing them is effectively free money.

• The FATCA recursive enforcement infrastructure is extended to mandate global compliance with other US laws, by making banks impose penalties on any company or person that Congress doesn't like. People get upset as they suddenly realise that US law now takes precedence over their local laws.

FATCA is literally a totalitarian takeover of the entire global financial system by America. They don't care if people have to violate local laws in order to obey. The view of Congress is that American law supercedes all local law. It's the formal establishment of a global American empire.

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

#117

Post by chadscira »

mike_hearn wrote: post #112
ckozlowski wrote: post #82

Earlier quoted context omitted.

Not necessarly disagreeing, but when you say "many" (And that 266% increased made headlines everywhere), I feel it needs some context: 8.7 million abroad. 3,417 renounced citizenship. Or, .039%. I'm going to take a stab at this and guess that's some of the 1% right there who had millions stashed abroad. Maybe the tax law was painful to them, but for the rest, it's hardly a crisis.

The statistics on renunciations may not be correct. There are lists of people published who renounced, but every time I read a story about FATCA I keep coming across comments posting by people who claim they gave up their citizenship and never appeared on these lists. The real question is how many people would like to give it up, but can't, because obtaining citizenship where they live is extremely tough and because…

Thats crazy! I had no idea they can "undo your renunciation". Sounds like slavery to me ;).

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

#118

Post by AlisdairO »

matthewmacleod wrote: post #6
TazeTSchnitzel wrote: post #2

I 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?

There's probably a legitimate point to be made that countries typically spend a large amount of money during an individual's formative years that they don't pay back until they've spent a significant length of time working, so they have in essence pre-used a lot of those services.

I wouldn't personally advocate that stance - I think it's problematic with respect to consent - but I can see that in the case of extremely high emigration rate the viewpoint might be very tempting.

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

#119

Post by matthewmacleod »

crdb wrote: post #72
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?

The key is to look at the current budget: https://en.wikipedia.org/wiki/2015_United_States_federal_bud... It can be split into three families of spending: - defense, which benefits you globally via Pax Americana, free trade routes etc. and should you require it, "Captain Phillips" style rescue. - "socialism", in the form of benefits that everybody has to pay for and that you can receive if you trigger certain situati…

Ah, education is an interesting point.

The question is why don't other countries tax their citizen abroad?

I assumed that the general consensus was that it all balances out at the end of the day – countries don't tax their citizens abroad, but do tax noncitizen residents who have income in the country. Either approach isn't all that bad, but it's interesting to think about how it can realistically be handled where individuals can hold multiple citizenships. My partner is dual US/UK, and completing a US tax return when you haven't lived in the country in decades is expensive and time-consuming.

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

#120

Post by usrusr »

Broken_Hippo wrote: post #48
mikeash wrote: post #10

Earlier quoted context omitted.

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.

I'm an american living in Norway. I can vote for president, sure. Supposedly I am allowed to vote in the district I last lived in the states, but trying to get any of this done is difficult, especially since the state I live in requires proof of address for voter registration. I understand the likelihood of the representatives there to care about any issues I have is pretty minimal. After all, americans living abroad…

“Supposedly I am allowed to vote in the district I last lived in the states, but trying to get any of this done is difficult, especially since the state I live in requires proof of address for voter registration.“

Makes me wonder what would happen if a significant number of expats would agree on some low-population state to remotely take over. How far could bureaucratic friction be increased to fend off that kind of "attack"?

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