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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

#121

Post by matthewmacleod »

mikeash wrote: post #41
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?

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.

That's a fair point. I wonder if there's a better way to structure that than the existing income tax?

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

#122

Post by rayiner »

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.

I filed five returns last year (4 states and 1 federal) and I didn't even leave the U.S.

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

#123

Post by dangjc »

rurban wrote: post #56
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…

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…

The flip side is that foreigners who invest in America aren't taxed at all. At least in Singapore, I know people who invest in the US stock markets and pay not a single cent in capital gains taxes or dividend taxes (Singapore does not tax these). I'm not sure the citizenship based taxation makes the most sense.

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

#124

Post by nraynaud »

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 never thought of that, every representative gets elected under a different rule. You could still do something like the Samoa, and get it organized by the State Department. That wouldn't fly with an actual voting power, but for consultative representation, I think that would be good enough. I guess for actual voting representation, either one State should grab them, or make a federal level election for "others" (where probably Samoa and friends, DC and other troublesome situations could be handled as well).

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

#125

Post by [deleted] »

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…

[deleted]

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

#126

Post by dangjc »

mark_l_watson wrote: post #107

My wife and I had been planning on buying a home in either Belize or Costa Rica but gave up this plans because of FACTA. Too bad because I really like Central America and was looking forward to a major lifestyle change from integrating into a local rural community. Really a messed up law and messed up policy. I do understand why our government did it: not good for the economy to have older people spend their social s…

You really changed your life plans because of FATCA? Are there really no banks in Central America willing to work with Americans? I'm in Singapore, and though I've had to close one bank account due to it, I've had no problems with my others. Filling out an FBAR the first year took me a couple of hours to figure out, but every year after it took me like 10 minutes.

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

#127

Post by dangjc »

My general experience with FATCA has been quite mild. I've been in Singapore for 5 years, and I had one investment account that had to be closed, but all my bank accounts were fine. The FBAR took me a few hours to figure out how to fill out the first time, but every year after it only took 10 minutes to update the numbers. The laws about starting a business are much more onerous. If I become a founder/shareholder/director of a company not incorporated in the US, there are all sorts of painful compliance requirements that are basically there to make me rather incorporate in Delaware or something. Net net, I sense that except for a few unfortunate cases, most of the pain of compliance with FATCA is coming from those who it was meant to target: wealthy tax evaders. This article did appear in the WSJ...

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

#128

Post by mark_l_watson »

dangjc wrote: post #126
mark_l_watson wrote: post #107

My wife and I had been planning on buying a home in either Belize or Costa Rica but gave up this plans because of FACTA. Too bad because I really like Central America and was looking forward to a major lifestyle change from integrating into a local rural community. Really a messed up law and messed up policy. I do understand why our government did it: not good for the economy to have older people spend their social s…

You really changed your life plans because of FATCA? Are there really no banks in Central America willing to work with Americans? I'm in Singapore, and though I've had to close one bank account due to it, I've had no problems with my others. Filling out an FBAR the first year took me a couple of hours to figure out, but every year after it took me like 10 minutes.

Yes I did. My wife and I had a pro and con sheet for reasons to move and reasons not to move. FACTA tipped the scales, so to speak, and we decided to not do move.

I am still a little sad about our decision though. I think that life is more interesting living in different places, doing different kinds of jobs, etc.

BTW, I didn't want to move for financial reasons as much as wanting a low key lifestyle. There is something about Central America that makes me feel great just hanging around. Anyway, my wife and I live in the mountains of Central Arizona, and I also love our lifestyle here, so life is good.

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

#129

Post by RP_Joe »

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 $…

What about social security taxes?

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

#130

Post by patrickmay »

"The best solution is for the U.S. to join the rest of the world in taxing based on residency rather than citizenship."

As a former expat, this would have made my life significantly easier. The current U.S. tax code is appalling in its overreach.

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