The Law That Makes U.S. Expats Toxic

171–172 of 172 posts

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

#171

Post by mikeash » Fri, Oct 16, 2015, 3:31 AM UTC

hysan wrote: post #170

mikeash wrote: post #168

Earlier quoted context omitted.

If you have a phone at all, there are cards you can buy to make cheap international calls by bouncing through a local number. If you don't have a phone, well, you're stuck, but that's hardly characteristic of being abroad, and you'd have the same trouble from a shack in the mountains in the US. As for caring about your opinion, why would they care any less about you compared to any other voter?

Never knew about or seen the phone card before. Good thing to remember, but do they really have this in every country? But do note that with a shack in the mountains, you'd probably have normal landline access and even possibly cellular reception, so it's not a good comparison. I said the caring part out of frustration with the current system. I've always felt that if they couldn't map you to a US address within thei…

I've seen those cards in lots of places, but I'll admit it's far from a complete survey. People love to call home, and there are expats almost everywhere, so I'd expect they'd be available just about everywhere.

As for petitions and such, I imagine that would be much less of a factor now with the rise of social networks and such. But the views of our elected officials may take some time to catch up to that.

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

#172

Post by jake_morrison » Tue, Oct 20, 2015, 2:24 AM UTC

I am a business owner living overseas in Asia. I generally spend about $2500/year on tax preparation, between my personal return and the 5471 form that I have to file to report my company information on my US tax return. While my financial life does have it's complexity, I have to pay this simply for compliance, independent of income. The $100K/year deduction is on "earned income", i.e. salary. So if you have other income, e.g. dividends or other capital gains on real estate or selling your company, you have to pay at your full standard income rate (small company dividends are not "qualified" unless the US has a corporate tax treaty with the host country).

As a business owner, my best strategy from a personal tax perspective is that my company makes no profit - it should all go to me as salary. In the past, that has put me in conflict with a non-US partner, as it didn't match his best strategy. And it means that "profit sharing" for employees doesn't make sense.

So US tax law costs me considerable money in compliance costs and fundamentally distorts the way I run my business, for no additional tax revenues to the US.

Fundamentally, residence based taxation makes more sense. It's more direct and easier to manage. People talk about these benefits of being a US citizen, as if I don't get services from the country where I live.

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