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Americans abroad are giving up their citizenship as banks shut down accounts

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Re: Americans abroad are giving up their citizenship as banks shut down accounts

#111

Post by waqf »

sliverstorm wrote: post #94
matthewowen wrote: post #15

The underlying problem behind all of this is that the USA's policy on taxing non-resident citizens is, fundamentally, absurd. As a permanent resident, it's the one thing that gives me pause about applying for citizenship (I know that the same rules apply to me whilst I'm a permanent resident, but I'm concerned about what happens in the future if I decide to leave the USA).

Why is it absurd? Or, from the other angle, why does it exist? (real answers please, not "becuz money-grubbing gub'mint") Considering you get to deduct $100k of your foreign earnings, it's not like they are trying to rake John Doe Expat over the coals.

You mean to imply that being double-taxed after your first $100k is fair and reasonable?

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#112

Post by sliverstorm »

waqf wrote: post #111
sliverstorm wrote: post #94

Earlier quoted context omitted.

Why is it absurd? Or, from the other angle, why does it exist? (real answers please, not "becuz money-grubbing gub'mint") Considering you get to deduct $100k of your foreign earnings, it's not like they are trying to rake John Doe Expat over the coals.

You mean to imply that being double-taxed after your first $100k is fair and reasonable?

If you own two houses, just because you aren't living at House A right now doesn't mean you don't need to pay upkeep, and doesn't mean you aren't deriving benefit from it.

Thought of differently- expats expect to be able to vote, right? Is it fair and reasonable for someone who is categorically excluded from paying taxes, to be allowed to vote?

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#113

Post by anigbrowl »

This story appears on HN like clockwork every 3 months. Why? Because the Federal register publishes quarterly figures, the articles write themselves with very little work, and there's a large contingent of people on HN who think taxes are evil. I do think the policy of taxing US citizens on overseas earnings is unwise and FACTA is somewhat unworkable, but it's worth noting that taxation of Americans living abroad (and at a higher rate, to boot) dates back to 1864, when it was introduced to defray the costs of the civil war.

http://www.treasury.gov/resource-center/tax-policy/Documents... has all the information, and you can see the little quarterly blip on the search results graph as newspapers run the story reliably every 3 months. There has been a distinct uptick since the passage of FACTA but applications seem slightly down this year compared to 2013.

http://en.wikipedia.org/wiki/Revenue_Act_of_1864

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#114

Post by GFischer »

Vespasian wrote: post #69
GFischer wrote: post #52

Earlier quoted context omitted.

Totally agreed on the European passports being overall superior (although some do come with obligations like military service for an Austrian passport for example), but they're much harder to obtain (I've been denied German citizenship). I've read about your reasons for leaving (security), and sadly, I have to agree that they're still an issue (and I'd love living in Switzerland). I think the risk can be minimized th…

Out of curiosity: If its not too personal can you share some general information what nationality you have or had while applying to the German citizenship and what were the main reasons it didn't work out.

My grandfather was born to Prussian parents which came to Uruguay and then back to Prussia, but he was born in Uruguay, and lived in Uruguay from his teens onward.

When he went to obtain a German citizenship, he was asked to bring in a lot of additional paperwork (a church birth certificate being one I think). One of my uncles went to Germany to try to obtain it, but it was in vain.

I wasn't going to be granted German citizenship unless my grandfather, and then my father, were granted German citizenship.

My grandfather was as German as they come, but due to those quirks he wasn't granted citizenship, and so I wasn't able to.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#115

Post by ggambetta »

dreamweapon wrote: post #54
ggambetta wrote: post #34

Earlier quoted context omitted.

As a fellow Uruguayan, I want to add that citizenship comes without too many obligations; no military service or anything like that. The only one I can think of is that voting is compulsory. On the other hand, I wouldn't recommend living in Uruguay; I had very good reasons to leave and I don't see myself returning anytime soon. And I'd argue any European passport is better than an Uruguay one - you can freely live an…

I wouldn't recommend living in Uruguay; I had very good reasons to leave and I don't see myself returning anytime soon. I'd be curious to know why this is the case for you.

Insecurity, basically. At some point during the last decade society kind of broke down, and the respect for human life was lost. I'm talking 12 year olds killing a store clerk in cold blood for 2 or 3 dollars, or worse [1]. This didn't happen just once; at some point there was a murder per day, in a country of three million people. The government, who are former terrorists [2] and based their campaigns on condemning the "repression" of the police, are ideologically incapable of being firm against all this (in fact, they're ideologically stuck in the 60s)

Another example: people trying to hijack a car stopped in a traffic light. In broad daylight. While a news crew was filming. And a policeman was standing 100m away: https://plus.google.com/+GabrielGambetta/posts/fbZo1YVLeet

They have also given too much power to the unions, to the point that they can legally steal a factory from their owners, for example (in a nutshell, occupying it until it goes bankrupt, and then assuming control "to save jobs") Also, just before their first term in power, Uruguay had just came out of a terrible economic crisis that affected the whole region; basically, Argentina fell, and Uruguay is too small and dependent to have avoided it (and the old government was blamed). During the last decade the whole region has improved, so the economic situation in Uruguay is quite good right now (and the new government takes credit). But the worst thing is the way they're squandering this money in sort-of-well-meaning but very badly implemented "social" policies, so when the "up" economic cycle turns into a "down" economic cycle and the easy money runs out, there will be no reserves, a disfunctional and violent society, truly pathetic education level [3],... it's a ticking bomb.

[1] http://www.elpais.com.uy/informacion/ninos-mataron-amigo-hor... (two kids, 11 and 14, killed their 11 year old friend with a machete, and then went playing football)

[2] http://www.taringa.net/posts/info/15613143/Mujica-el-terrori... http://diurnarius.com/jose-mujica-de-ladron-a-presidente/ http://www.periodistadigital.com/opinion/politica/2009/11/30...

[3] http://www.montevideo.com.uy/auc.aspx?220385

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#116

Post by ggambetta »

mrfusion wrote: post #49
ggambetta wrote: post #34

Earlier quoted context omitted.

As a fellow Uruguayan, I want to add that citizenship comes without too many obligations; no military service or anything like that. The only one I can think of is that voting is compulsory. On the other hand, I wouldn't recommend living in Uruguay; I had very good reasons to leave and I don't see myself returning anytime soon. And I'd argue any European passport is better than an Uruguay one - you can freely live an…

Why don't you recommend living there? It sounds like a nice place?

My response above: https://news.ycombinator.com/item?id=8369281

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#117

Post by gyardley »

sliverstorm wrote: post #94
matthewowen wrote: post #15

The underlying problem behind all of this is that the USA's policy on taxing non-resident citizens is, fundamentally, absurd. As a permanent resident, it's the one thing that gives me pause about applying for citizenship (I know that the same rules apply to me whilst I'm a permanent resident, but I'm concerned about what happens in the future if I decide to leave the USA).

Why is it absurd? Or, from the other angle, why does it exist? (real answers please, not "becuz money-grubbing gub'mint") Considering you get to deduct $100k of your foreign earnings, it's not like they are trying to rake John Doe Expat over the coals.

It's absurd because no other country does it that way - the United States, despite the rhetoric, treats its own citizens worse in this aspect than any other country the rest of the civilized world.

If other countries behaved the same way, it wouldn't be so ridiculous- but they don't, so it is.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#118

Post by arbuge »

anigbrowl wrote: post #113

This story appears on HN like clockwork every 3 months. Why? Because the Federal register publishes quarterly figures, the articles write themselves with very little work, and there's a large contingent of people on HN who think taxes are evil. I do think the policy of taxing US citizens on overseas earnings is unwise and FACTA is somewhat unworkable, but it's worth noting that taxation of Americans living abroad (an…

This has nothing to do with thinking taxes are evil. This has everything to do with the fact that the US tax regime on overseas Americans makes life miserable for those expats. Oftentimes you finish up paying thousands of dollars for expensive tax help* only to demonstrate that your tax liability is $0 because foreign tax credits cancel out your foreign tax obligations. Besides all the difficulties with opening bank accounts as noted.

The solution is simple: the US needs to join the remaining 99% of the developed western world and switch to residence-based taxation instead of the current citizenship-based regime. In other words you tax people within your physical borders only (citizen or not), but suspend their tax obligations when they leave for as long as they leave, unless they still have income-producing assets within the borders of your country.

* Taxes overseas are not something you can just whip up Turbotax to handle. You oftentimes need to reconcile foreign tax statements with your US ones to compute tax credits. Worse, the foreign tax ones are rarely due on the same deadlines as the US ones, and foreign currencies need to be converted and so forth. The whole thing is difficult for most people but almost completely unworkable for entrepreneurs owning corporations overseas, owing to the need to file obscure and complex Controlled Foreign Corporation tax forms. Budget around $5,000 in tax prep fees per corporation for those, even if your corporation is a dormant LLC with no money passing through it.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#119

Post by GFischer »

Grazester wrote: post #102
GFischer wrote: post #73

Earlier quoted context omitted.

Yes it does, but people do it anyways. If you become a U.S. citizen, you're expected to renounce your other nationalities. Edit: The biggest case was Facebook co-founder Eduardo Saverin renouncing U.S. citizenship for the tax savings http://en.wikipedia.org/wiki/Eduardo_Saverin 2nd Edit: some discussion on Hacker News https://news.ycombinator.com/item?id=3979669 https://news.ycombinator.com/item?id=4416258

You can become a U.S. citizen and maintain citizenship of your country of birth(or others your are holding)if the country wasn't China and a few others listed in the link I have provided. Half of my immediate family have become U.S. Citizens and maintained their other citizenships. http://www.immihelp.com/citizenship/dual-citizenship-recogni...

I was told by a friend who's getting U.S. citizenship you have to take an oath renouncing other citizenship.. here it is:

"“I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen…” from the Oath of Allegiance "

http://www.newcitizen.us/dual.html

apparently it is not binding:

" the oath has never been enforced to require the actual termination of original citizenship"

http://en.wikipedia.org/wiki/United_States_nationality_law#c...

Edit: can you ask your family if they took that oath, or is the information obsolete? Until now, I thought it was an actual requirement to renounce other citizenships.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#120

Post by Vespasian »

GFischer wrote: post #114
Vespasian wrote: post #69

Earlier quoted context omitted.

Out of curiosity: If its not too personal can you share some general information what nationality you have or had while applying to the German citizenship and what were the main reasons it didn't work out.

My grandfather was born to Prussian parents which came to Uruguay and then back to Prussia, but he was born in Uruguay, and lived in Uruguay from his teens onward. When he went to obtain a German citizenship, he was asked to bring in a lot of additional paperwork (a church birth certificate being one I think). One of my uncles went to Germany to try to obtain it, but it was in vain. I wasn't going to be granted Germa…

A very interesting stroy. Thanks for sharing that!
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