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U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

nytimes.com

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Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#161

Post by statictype »

sremani wrote: post #15
sschueller wrote: post #13

Earlier quoted context omitted.

And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…

They have painted the picture of these rich billionaires getting away without paying taxes, and once they got the draconian laws, they are applying it to every day Joe, who hardly make a six figure salary overseas. For a country which has no short supply of aspiring immigrants and US is actually very petty towards people who want to abdicate their citizenship.

If you make less than 6 figures overseas, then you likely don't have to pay anything to the IRS

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#162

Post by kspaans »

lisivka wrote: post #160
_acme wrote: post #143

Earlier quoted context omitted.

No, if you're not paying more than you would if you weren't a US citizen, you're not being double taxed.

But you are paying more.

You aren't paying more than if you live inside of the US. The foreign tax credit means you only pay the difference in income tax rates between the US and the foreign country. You don't pay everything you'd owe in the US (say 39% of your income), and then ALSO pay everything you'd owe in the foreign country (say 30% of your income, for a total in 69% of your income, THAT would be double-taxation).

Consider the case where you are earning enough money to be above the thresholds and in a country with higher income taxes than the US. The IRS will say that you owe X in income taxes, but will also give you a tax credit of X+Y based on the taxes you've already paid (assuming a tax treaty). As X+Y>X, you will not owe anything in the US.

Double taxation has a specific meaning and doesn't mean "paying more than one tax".

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#164

Post by lisivka »

kspaans wrote: post #162
lisivka wrote: post #160

Earlier quoted context omitted.

But you are paying more.

You aren't paying more than if you live inside of the US . The foreign tax credit means you only pay the difference in income tax rates between the US and the foreign country. You don't pay everything you'd owe in the US (say 39% of your income), and then ALSO pay everything you'd owe in the foreign country (say 30% of your income, for a total in 69% of your income, THAT would be double-taxation). Consider the case w…

a) If I pay income tax and e.g. war tax, then this is two taxes. b) If I pay income tax and then earnings tax on top of that, then it is double taxing. c) If I pay income tax to country A, then same tax to country B, then it is double taxing.

We are talking about c).

Wikipedia:

Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes).

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