> It's so irritating to be an American that has moved overseas. Basically the only country in the world that charges taxes on money you make and spend somewhere else, just because of where you were born.
This is exactly why these people are renouncing US citizenship: They’re living overseas as citizens of another country and, like anyone rich or poor, don’t want to be paying taxes to a country they aren’t living in.
It’s not exactly unfair or nefarious. If they’re no longer living in the US and they are citizens and residents of another country, surrendering US citizenship is a logical choice.
Renouncing US citizenship is a common move for this exact reason. This article just happens to have drawn an arbitrary line in the wealth of people who renounce US citizenship and made a headline out of the wealthier subset. The wealthy are also more like to have dual-citizenship but relocate to another country, so they’d be over represented in this set.
Some are "accidental Americans" like UK Prime Minister Boris Johnson, born in the US, who discovered as a US citizen he had to pay capital gains taxes when he sold his London apartment. Australia requires its parliamentarians to have only Australian citizenship and some discovered for the same reason they were not eligible.
Furthermore, the burden of FATCA is sufficiently onerous that many banks etc. just refuse to deal with it and close the accounts of US persons. A number of long-time expat Americans, e.g. in Germany, have renounced their citizenship because they are unable to function due to this.
Alexander Boris de Pfeffel Johnson aka Boris Johnson is not as clumsy as his haircut makes him look to be. The guy keeps fit, doesn't look like Rambo but he is fit with a bit a sticky build. He is intelligent, he survived the muddy waters of politics, affairs and is prime minister.
Of course he always knew he is American dual citizen, a person like him does not handle an apartment sale himself, he has handlers and advisors. And he was in a very high income bracket for a while and it's safe to say he fell into a us taxable segment before that sale.
He is a showman and this was just the event where the tax bill was too high and he said "no more".
hah yes this. the buffoon act really makes people underestimate- and if i dare say, sympathize with him. but he's much more competent (at getting what he wants) than people give him credit for.
In the military I saw people get kicked out for being “overweight.” Interestingly, they could run circles around you for 12 miles, throw you several yards, or otherwise destroy a Physical Fitness Test.
He's also not terribly organised or rule following. He probably just thought he could ignore the US tax and no one would notice. I'm not sure if he paid in the end or got around it by renouncing his citizenship?
Yeah, it is in theory, but even small businesses incorporated abroad with US persons involved in them put huge reporting burdens on the US person. Form 5471 and friends make this stuff look straightforward. Most of the time I find my frustration isn’t about how much money I am paying in taxes, but just how much dull and confusing paperwork I have to understand. Even trained professionals who spend their whole lives doing this get confused by US tax compliance for people who have international lives. The US needs to realise how important the a positive reputation in its expat community would be for its soft power.
I've always wondered of it was possible to move to the UK by starting a business that required a UK presence and using that as a reason for an indefinate residence permit?
Nope. You cannot really sponsor yourself working for you own company, that would be such an obvious loophole.
I've been living here 3.5 years, 2 on a YM visa, 1.5 on a work visa. Unfortunately, my 2 years on YM don't even count towards the 5 required to get ILR. You can build up an entire life here & all it takes is for your work visa to be disappeared and then you have 1 month notice to gtfo the country otherwise you're "overstaying".
After 3.5 years somewhere you definitely build up "a life" there, but the UK gov offers no protections at all. Until you hit that 5 year mark they don't give a toss about you.
As long as you mean 5 years of uninterrupted work visa (YM doesn't count) where losing your visa forces to to leave w/ 1 month's notice, then sure, they have "open borders".
I assume you mean a business bank account for the banking?
Challenging, and potentially criminal.
If you have any management authority over the bank accounts owned by the business, then those accounts fall under FACTA.
Hell, if you are even just an employee, but can sign on the bank account, then you have to report it to the US authorities.
So a 'business account' doesn't get you out of the US required reporting.
Also, the implication is that you'd use this for 'day to day' banking. Using a business's funds (a business bank account) to cover personal spending is typically criminal (embezzlement).
So not a solution.
And this doesn't solve the other problems, like pension savings or other financial products.
Unfortunately if you have equity in the business, you'll get taxed. However, if you are only an employee, you get an exemption on something like $150,000 of income, housing, and other expenses. So as a US citizen, you can avoid taxes only by living outside the US, and being an employee of a non-US company. If anyone knows otherwise, please correct me as I'd greatly benefit!
nitpicking. You don't get out of taxes, you get out of paying US taxes (on earned income, you still have to pay capital gains).
But you still have to file US taxes. As an expat, you have more forms to fill out.
AND the bigger challenges are banking. You still have to find a bank willing to open an account for you, and good luck getting more complex financial services.
Well Germany also requires that you surrender other citizenships when you get a German citizenship, unless you are a German dual citizen through ancestry.
I heard rumours that this law is basically to put a thorn in the eye of Turkish immigrants minus what the EU does not allow. Is there any truth in this?
Yes, and Turkey moved to nullify this by creating a system in which if you are otherwise a valid Turkish citizen that has to give up because of a requirement from a foreign country like this, you can get on a special status in which you cannot vote, but have all the other privileges of Turkish citizenship. That status is not citizenship in theory, but practically you have everything as usual, and can participate in the Turkish social security, retirement, health system and all else. It’s called the blue card.
I think the main difference is that Turkey does not require you to relinquish your Turkish citizenship if you get another, while India does. In a way TRs system is entirely to help out with an issue a foreign country creates, while India’s is primarily an attempt to recover from an own goal — assuming you believe people having multiple citizenships is a good thing.
It got really awkward when the large minority of turkish Germans living in Germany with turkish citizenry overwhelmingly voted for Erdogan in the last elections. I'd really wish Germany was able to adopt an immigrant culture similar to the US, but the current situation is a semi-failure, but neither side of the political spectrum seems to be able to implement good policies to solve the issues.
First import uneducated Turkish workers for unskilled jobs so they will work for cheap, and then discriminate against educated workers because you think it's being Turkish (rather than education) that makes the previously-arrived workers have trouble integrating. So Germany and Europe in general keeps getting more Erdogan voters while others just don't want to deal with racism and immigrate to other places like US or Canada.
If you really want to fix this, you have change the main demographic of Turkish immigrants, probably by offering a clear immigration path to students who come to Europe for graduate programs or such.
WOuld you care to expand on that? I'm curious what in particular about the US immigrant culture you would like to see adopted, and what about the current German system prevents that culture from developing.
Sadly I can't find good polls on some of the things I want to talk about, so this has a bit of an anecdotal note. But I've been living in a majority turkish subdistrict for most of my life, and have many german-turkish friends, as well as friends and family teaching in schools with many turkish and arab descendant kids. But first some facts: "People with a migration background", which includes their children and children's children even if they were born here, make up 21% of the population. Half of these hold german citizenship. 40% of all kids have a migrant background. 12.5% of people with a migrant background are so called Spätaussiedler, ethnic germans who migrated to Germany after WWII.[1]
Attidudes of Germans at large towards immigration are very mixed: 71% think that it leads to higher strain on the welfare state, 69% think it leads to conflicts with "the natives", 63% think it leads to problems in schools. At the same time, 67% think that it makes life in Germany more interesting, and 64% think immigration is important to combat the effects of our quickly aging population.[2]
Now on to what I think is the biggest failure, which is now very hard to correct: Many second or third generation immigrants still don't feel like they are "real" germans. There's still a strong class divide, which in urban areas also leads to segregated communities. They are underrepresented in politics (except for the Spätaussiedler) and white collar jobs, and there is whitespread employment discrimination, especially against people of turkish, arab and african descent.[3] While the current government declared a "welcome culture" in 2015 during the refugee crisis, in the heads of the majority of the population, there's still a very clear picture of how a "real german" looks and acts. - While close to half of the population admits that "Islam is a part of german culture now", they will still ask Ahmed "where he is really from", and rather hire Oscar over him.
This also partially explains why Erdogan is so popular among turkish Germans: They feel disrespected here, so the vision (delusion) of Erdogan making Turkey into this powerful and strong state is very appealing to them.
I do think things are getting slightly better, but there's a long way to go, and there's also risks of things turning really sour: Anti-democratic ideology is relatively widespread among the muslim minority, in contrast to the rest of the population, their level of religiousness stays about the same, the current money policy of the ECB leads to an enormous rise in living cost in urban areas, and the divide between rich and poor in Germany is increasing.
@markdown: +9000 for this answer! I agree: It is very thoughtful.
I re-read this part a few times:
<<
Attidudes of Germans at large towards immigration are very mixed: 71% think that it leads to higher strain on the welfare state, 69% think it leads to conflicts with "the natives", 63% think it leads to problems in schools. At the same time, 67% think that it makes life in Germany more interesting, and 64% think immigration is important to combat the effects of our quickly aging population.[2]
>>
At first blush, I think "Oh come on people, pick one side or the other!" Then I think again: Each one can be independently true. Taken as a whole, these opinions appear conflicted. This is the reality of large scale immigration: It is complex is any society.
When I think about immigration, I try to separate high-income/-education/-skill from the low- counterpart. Germany should be doing everything possible to attract the high side. It's a great place to raise a family.
Thank you for taking the time to explain your point of view.
I suppose this is just the unavoidable result of too many immigrants arriving around the same time. And when they have their own communities, they have no reason to integrate into the host culture.
Has Germany done anything to reduce the number of new immigrants coming in?
Also, I assume there is a special exception for Jewish families of German descent who were unfairly stripped of their nationality during the National Socialist period (early 1940s). There is a programme to help people re-gain their citizenship. I've read a few long-form jounalism articles (in English) about people who don't speak German
and are not German residents applying under this programme.
Pretty much anyone whose citizenship was revoked by the Nazi government, or descendants of those victims who would have had citizenship today had it not been for the Nazi government, can apply to have the citizenship reinstated. Numerically it's likely mostly Jewish families in Israel and the US, but it applies to all of the Nazis' German victims.
Doesn't the Netherlands do this as well? As a Canadian I think not allowing dual citizenship might solve a lot of issues with both the very rich and the very poor.
Only because of US laws. I have two citizenships, but one residency. In most Western countries, being a resident is associated with healthcare and pension, so having one residency is logical.
> Only because of US laws. I have two citizenships, but one residency.
U.S. citizenship carries extraterritorial benefits. For example, we're pretty good at getting our people out of thorny situations, even at great national expense. If someone isn't paying to support that, it makes sense to force a revocation decision.
Many Americans seem to believe that, but it doesn't actually seem to be the case. For instance, when Yemen was falling apart, countries like China, India, Pakistan, Russia, and Indonesia all worked hard to evacuate their citizens, many using their military to do so[1]. The U.S. response was to tell American citizens they were on their own[2]. The U.S. embassy even recommended that Americans seek assistance from India if they needed to evacuate[3].
So if anything, I'd say America is worse than other countries at getting citizens out of bad situations. But there seems to be a tendency for people to not look at what other countries actually do and just assume that America is the best.
Don’t forget the poor responses at home to disasters natural and unnatural. Katrina was only 15 years ago, and that was before mainstream myths of omnipotence were broken. Such a travesty. Such a failed social contract — esp. for common security, welfare, and wellbeing.
> I'd say America is worse than other countries at getting citizens out of bad situations
I last saw data through the UNDP about ten years ago. It's very possible that the situation has degraded. And no country has 100% coverage, far from it. At the time, however, the U.S. government was exceedingly good at exfiltrating citizens from disaster zones. Granted, it has had more experience doing this because, well, empire.
The situation was starker for low-level assistance, in which many diplomatic missions will not get involved.
If you come across the data please share it, it would be worthwhile seeing what exactly they're talking about and if the data matches your memory of it. I didn't come across it in my (very limited) search, but I did find this analysis that suggests U.S. citizens fare worse than citizens of many other countries[1]:
> According to a database compiled by New America from public sources, since 2001, American hostages taken captive by terrorist, militant, and pirate groups have been more than twice as likely to remain in captivity, die in captivity, or be murdered by their captors as the average Western hostage. Forty-three percent of American hostages died, remain in captivity, or remain unaccounted for, compared to an average of 19 percent for all Westerners.
It's because USA has a policy of not paying any ransoms or making concessions to the hostage takers (unlike most other western countries). I'd assume this might also result in Americans being targeted less often than people from other countries (I haven't see any data on this).
The US is also very good at issuing travel warnings that are very explicit about the risks [1] I am not aware of the DoS ever going from 'its all ok' to 'see ya, y'all on your own now!' Anyone that was in Yemen prior to 2/15 had (or should have) a very good idea of where things were going.
At the early onset of the Covid-19 pandemic started, many countries sent special planes to repatriate their citizens either from the Wuhan region, or from other countries where they got stuck because of a sudden borders close. The US also organized flights, but I was personally very shocked to learn that they charged close to $1,200 for those trips, although it was clearly a case of force majeure. That was the moment I thought that Americans don't actually get their tax money worth in terms of government support, while being subject to taxation on their worldwide income even when not residing in the US.
To be clear, most if not all countries chartered special flights for free. Later on, some more flights were organized with the help of airline companies, but those were paid.
Likewise in China, I had Italian friends whose embassy helped arrange covid vaccines for Italians living there while the US embassy was no help whatsoever to their citizens. At least among expats, the US embassy has the reputation to be the least helpful embassy to their citizens.
If non-PC thoughts are against the rules, post those rules in the acceptable use policy. I don't think it's hateful to critically discuss BLM. I do think it's hateful to say "x group is bad", but that's not what I read.
I believe BLM to be led by Marxists and that is backed up by objective evidence. I'm not sure why that's controversial. It's also objectively true that George Floyd had a criminal record. Again, I'm not sure why that's controversial. One can be very socially aware and also recognize those two facts. It is indeed problematic that Floyd pointed a gun at the abdomen of a woman whom he thought was pregnant during a home invasion robbery, or that he had significant amounts of narcotics in his system when he died. That doesn't make his death justifiable, it's just the real life complications of a real life case (which tend not to be overly clean). When did we get afraid of objective facts?
EDIT: Downvoters: explain why. Simple Q. What is it about facts you don't like?
It doesn't take Einstein to understand that George Floyd could just be anyone in that scenario.
To focus on his personal history is simply irrelevant and is in disrespect of the judicial branch and the principle on the separation of powers. No one is contending the truthfulness of his criminal history, but he didn't die as a result of that, he died as a result of the disregard of human life by an officer of the executive branch.
Even if you don't like BLM, which is okay, it stretches too far to claim it a terrorist group.
Please don't just reduce it to 'facts you don't like', facts won't get you banned, but those claims the OP made are more than that.
I don't have the feature to downvote you, but it I did then I would. Here's why: what is an "objective fact"?
Are those statements you made relevant to the death of George Floyd? The answer is no.
He was a criminal who made mistakes - for which he served his time. Stating your "objective facts" appear to diverge attention elsewhere and in particular to paint George as the guilty party that warranted the police response that he received. Did he deserve that?
He begged for his life while being kneed to the throat for over 10 minutes. He then died on the floor by a police offer. There's some objective facts for you pal.
Further, there was no "real life complications of a real life case" he was literally murdered. That's the point and is why the police office is serving jail time!
Please take some time to consider what and WHY you wrote what you did. Do you think that he deserved death? Why?
> Are those statements you made relevant to the death of George Floyd? The answer is no.
They were in the judgement of a coroner. Not enough to mean murder wasn't called for, but it's obtuse to not observe that Floyd's drug load was past the lethal level for most people.
> Stating your "objective facts" appear to diverge attention elsewhere and in particular to paint George as the guilty party that warranted a cold bold death sentence. Did he that?
No, and when did I argue that? I never said he deserved to die. He should have been transported to jail and then tried for his crimes, not killed.
> He begged for his life while being kneed to the throat. There's an objective fact for you pal.
Anyone with any experience with corrections finds statements by suspects like this laughable at best. With him it was perhaps true (you physiologically can't speak if you can't breathe, but I don't deny he was killed). With someone else, it was because their wrists hurt because of those shiny bracelets they earned by committing crimes. I believe essentially nothing that a suspect says about their comfort, because the majority are accomplished liars. This is what they do. It is literally their occupation. I also believe Floyd was killed. Can you fit those two concepts in your head?
> Further, there was no "real life complications of a real life case" he was literally murdered. That's the point and is why the police office is serving jail time!
His drug consumption was absolutely a complication with his trial. Why would you think it wasn't?
> Please take some time to consider what and WHY you wrote what you did. Do you think that he deserved death? Why?
I don't think he deserved to die. I wrote what I wrote to illustrate that Real Life is hardly clean. There's nothing class-, race-, or otherwise-based in what I wrote. Objective facts.
So you agree he was killed and didn't deserve to die. You are just annoyed that such a "fuss" was made about it, and that he was black has nothing to do with it.
When did I ever say that? I am annoyed someone was blocked/banned for quoting facts. I don't think Floyd needed to die at that point in time.
Why are you so hell-bent on painting me as a racist? I've said nothing of the sort. I've never said anything apologetic towards the actors in Floyd's death. I've not even made a statement on his death at all, other than his drug use complicates things (which I think anyone would agree upon).
Sure seems like you're out to get someone. Why? What makes you so hungry for blood? I did nothing to irritate you.
The Unites States needs a dose of Marxism. Things are bad here for the working class. We have more than enough resources to do better and bring our society up to par with other developed countries.
Ha, nooooo. Your deluded worldview has been proven false. Kindly bugger off with it.
Every single developed country practices capitalism. Every one. The Scandinavians practice Democratic Socialism precisely because they have a surplus to spend on social programs (largely due to a combination of oil money and a lack of a semi-permanent underclass), none of which sounds particularly socialist to me.
>we're pretty good at getting our people out of thorny situations, even at great national expense. If someone isn't paying to support that, it makes sense to force a revocation decision.
how many American get into that kind of shit storm? it seem like this benefit isn't worth the taxes that you pay
How many Americans actually end up with real tax liability from a foreign country? Probably need to answer that before we determine whether it's "worth it" because my understanding is most people don't.
At least from those expats posting here, the issue isn’t the actual real tax liability, but the burden of having to show the IRS every year that you don’t think you have a tax liability.
It is awful - I'm glad you never had to deal with. It provides little revenue and causes a huge amount of hassle and makes living overseas way more difficult.
American expat here - agreed with the other expats - it’s the filing that really, really sucks. Like really. Breaking the difficulty down in terms of priority.
1 - just trying to work through what all might possibly be owed and not owed to US as well as the country(ies) one operates in.
2 - Identifying through which paperwork to declare it, while also ensuring income / business reporting is copacetic with the tax regime of the country that same is actually earned in. As a business owner, (many operating overseas are looking after a business) I have to complete corporate accounts (which costs $$$$ and takes forever) before I can file American income tax for the same accounting year.
3 - the value of the tax liability itself is a distant third in terms of hassle than any of the above. (I’ll include in this bucket the fact that Americans are taxed on income earned abroad, putting us at enormous disadvantage for work opportunities vis—a-vis peer expats who come from other countries)
And how about they make this service opt-in. I was born in the US but I have had nothing to do with the place for 95% of my life and I don't want their help. Why must I fill out their paperwork every year or pay them money to opt-out (which I can't even do anymore because of the current backlog).
Perhaps the revenue is not very great but if there were a blanket exception I think you’d suddenly find a lot more people gaming then system to not technically be US residents and thereby escape large amounts of liability.
Most countries don’t tax citizens living abroad on foreign revenue, and just forget about them once they become residents elsewhere (unless they still have income from their country of origin).
That's pretty easily dealt with through residency thresholds. We do this in the UK, counting people resident for tax purposes if they spend more than so many days in the UK in a given year. I would be very surprised if the US doesn't already do this to determine non-citizens tax status.
That's how state taxes are dealt with in the US and a number of people go to great pains to make sure they stay exactly the number of days in some high-tax state that lets them skirt liability. I'd be surprised if similar things didn't happen in Europe but I don't pretend to be as familiar with what goes on there.
If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently.
I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a bank account - even if you are a citizen of that country. The rule is simple: If you have ties to the US that could require you reporting your bank account to the IRS, then you cannot open a bank account.
First hand experience (US citizen): When you open a bank account overseas, they ask you if you are subject to FACTA (US passport or green card). Then you are given a multi-lingual form that explains all about FACTA, and require you submit your passport (for scan/photocopy) and to sign a form acknowledging the bank will end your account details annually (at least!) to the US IRS. I confirm this is true multiple times -- different banks, different countries. Surprisingly, even ones where the service is 100% non-English (read/write/speak!), they will still bring out multi-linguage forms and do a bunch of pointing to confirm.
Funny story: Overseas, I can remember going through anti-money laundering training. The week after, I went to open a new bank account. When I told them I was a US citizen, the account rep said -- without missing a beat -- "Do you want to report?" Jeez. That question alone is probably enough to get that bank into trouble! Obviously, that person failed their own FACTA training...
> FATCA also requires such persons to report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR')
What's ridiculous is that it also "requires" foreign banks to report details of accounts by US holders - even if the bank has no relation to the US.
Find me a bank in 2021 that doesn't clear US dollars. That is the big gotcha. This is one of the ways that the long arm of the US Treasury applies force is by restricting US dollar clearing if any banks in a jurisdiction refuse to comply. Literally: They would say to a developing country: Get that local bank in order, or we will not allow any one in your country (central bank or businesses) to trade or clear any US dollar transactions. Remember: Most US dollars overseas move by SWIFT transactions.
Because they apparently require foreign banks to report it.
Now, how do they actually enforce that supposed "obligation"? I do not know.
But it doesn’t surprise me. The US has already enforced it’s laws on foreign companies' dealing abroad merely because they had used dollars in their transactions.
They haven’t enforced it yet (for the banks, for non-compliant Americans, they have). But they’ve signed treaties with many governments to allow this, and they threaten foreign banks with fines related to any US dealings.
I'm aware of restrictions in France and Pakistan from coworkers on H-1 visas from those countries. Note that both probably do provide a way to open it if you go through some lengthy "exceptions" process, but it wasn't worth the hassle.
Basically, ever since the IRS required you to report foreign accounts (2007 or 2008), some countries have made it harder for people based in the US to get accounts. They see it as an indirect means to collect intelligence by the US.
Well there are a handful right here on this comment section. I'm a Brit and have known maybe half a dozen US citizens reasonably well here in London over the years, at least two of which renounced US citizenship for tax reasons while I knew them. It's definitely a thing.
According to another post you do not owe tax on income below $108k so that’s probably not going to affect most filers, though I’m sure an anomalously high number of HN users are earning six-figure salaries.
That is only applies to so-called earned income, you still owe taxes on all of your other income. And many people earn considerably more than $108k.
Furthermore, even under tax treaties, it is not uncommon for some part of your income to be double taxed due to differences in recognition and classification of income and foreign taxes paid. Americans often have to pay more taxes than if they only had to pay taxes in either country separately.
And this is on top of the onerous reporting overhead and other difficulties.
Many people earn a lot more than that. I agree. Where I disagree is that I don't see what's unjust about asking them to pay tax for a system they benefit from.
Faulty assumption; Americans who live abroad do not benefit from the US system: social security/disability/retirement, health programs, military, public infrastructure etc. pp. is provided by the country where they live.
What's the embassy doing for me as an American citizen living abroad who uses none of their services (except passport renewal but that's only because of the other ridiculous rule that US citizens must travel there on a US passport). Why am I paying for it?
What if you live in another town and are paying for that fire department? Just kidding. But really if you live in a country which has a tax treaties with the US, you also can offset your taxes with taxes paid to a foreign country anyway, so even for high-earners nothing goes to the embassy. If you do use the embassy, you generally do pay them fees of course.
The embassy is for maintaining relations with foreign countries, not just passports and birth certificates (and pricey notary services). That seems like a sideshow. When it comes to services for the public, they appear to spend most of their time dealing with visa applicants, based on the crowds and lines I've seen. They also do offer assistance for missing persons abroad; if you have a relative that goes missing abroad the embassy will investigate. That seems nice of them. I assume other developed countries' embassies are basically the same though.
Sorry, maybe I wasn't clear, I don't ever use the services they provide and I won't because they are provided by the other country I am a national of. I have no links to the US. Zero.
Why not? I could just as well say that someone making $50k in Arkansas shouldn't have to subsidize consular services for someone making a quarter million a year abroad. They're not really paying "full price" either given the large exemption.
The US has an interest in maintaining embassies and consulates independent of its expat population. And we often pay for whatever services we get there, so you aren’t subsidizing us.
Additionally a government should think about practicality and fairness before it implements policy. It is impractical and excessively burdensome to try and tax residents of countries that aren’t the US. Despite your stated beliefs elsewhere, it does not take very much income or bizarre situations to wander into dicey tax situations that are frightening for the expat. A small business (which is taxable in the US if you net more than about $430) can mean difficult filing in the US. I don’t earn all that much, and I’ve spent a lot of this summer working on my US taxes for no purpose other than to have them piled up somewhere, unless some IRS agent decides to make my life much more difficult.
Well, wehther it's alright or not, whether it is accurately characterized as 'getting screwed' or not, at least it's only the ones who can most afford it.
Perhaps you are being sarcastic in the parent comment, but United States "screwing" its successful people and forcing them out means that these successful people will no longer contribute to United States, but to their new home country instead.
Without their contributions the Unites States will be less successful, thereby "screwing" everybody in it.
This trend within United States is especially ironic and alarming considering that United States gained its success specifically by giving home to persecuted people from other countries with capacity for success. Conversely, other countries, some obvious examples being Nazi Germany and USSR, were not successful specifically because they forced out their successful people.
I mean, am I supposed to feel sorry for high-income people because they have to pay tax to continue to benefit from US citizenship and US embassies? I don't really, nor do I consider it getting "screwed." I think it is only fair that well-to-do expats should pay into the system like everybody else. If they don't want to, I welcome them to take the article's lead and give up their citizenship.
If it was just getting taxed up to a point I think you'd have a reasonable argument, but looking at the torturous nonsense they have to go through to the point where even US banks think the costs of having them as clients isn't worth the hassle, it's clearly way beyond that. Also, many of these people don't actually owe any tax at all, or relatively small amounts, but it's ridiculously difficult and costly to prove it.
I mean what is the objective? Raise tax revenue from ex-pats, or drive them out of US citizenship? What's actually happening seems to be the latter, not so much the former. Surely that's a serious policy failure.
After not living in the US for a few years, your view of the US is quite disillusioned. They don’t want you to come back and live there. The need to keep everyone thinking the US is the best. /s
The thing is, many of these expats aren't even "paying into the system" anyway. I have to file US taxes but can deduct what I pay in taxes in my country of residency, which is higher than I'd pay in the US; as a result, I don't actually owe any US taxes. But, like another commenter said, I have to pay thousands to someone to figure out how to even file all this stuff. In other words, some local accountant is making bank, not the IRS.
The people who have complicated taxes also usually have complex income sources and generally higher incomes. If you just get your wage the tax forms are relatively straightforward. Being international complicates things but you'll notice people are talking about the headaches associated with running their businesses, capital gains, etc.
It doesn’t take much for an American residing abroad to have complicated taxes. I work a salaried job and am trying to save for retirement and that puts me into the complicated bracket because of the rules on pension taxation in my country of residence vs the US. Our options for investment are very limited, compared to every other resident of the country. My local brewery was doing a grassroots investment campaign and I couldn’t even buy £20 worth of shares to support them because as a US person that was forbidden.
Yeah, while you could argue that the IRS should do pre-filled electronic returns, the reality is that if you have a W2 and a couple 1099s, doing your taxes is pretty straightfoward.
As you say, it's more complex income sources and potentially deductions that lead to big accountant bills.
And you mention 1099s, i.e. self employed. Well, if you run a sole proprietorship as an expat, you still have to file US self-employment tax forms, and there are also QUARTERLY filing requirements with penalties for non-filing.
Or you need to get the paper certifying that your country has a totalization agreement with the US (not all do).
And since 1099 isn't a thing in EU, you have to file the US 'small business' tax form, which is actually 3-5 forms.
so as an expat, even what should be very straight forward turns into a massive mess.
Sure. Yes, I was assuming a US citizen/resident working for an employer who has income from a few basic sources and is taking standard deduction--which actually describes a lot of people. (And I was mentioning 1099s mostly in the context of a brokerage account.)
Most of my knowledge of it comes from all the threads about Intuit's and H&R Block's lobbying regarding what IRS could and could not do to simplify tax filling.
If you don’t me asking. If it is as straightforward, what actually is the point in said lobbying?
Many people don't realize it's straightforward to fill out a 1040 form and assume they need to buy specialty software or go to a tax preparation place like H&R Block. Naturally they're not going to tell them otherwise.
Serious question, what benefits do you think US citizenship and US embassies provide over and beyond what pretty much every other western country provides to their citizens?
As multiple people have explained, preparing the required paperwork each year is a major expense and hassle, even if you do not owe any tax.
Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid.
Googling, just the first one that comes up, suggests that median income for "software developer" in USA is $86,523. Meaning half make less, half make more. $100K is the 75th percentile, meaning 75% make less. (https://www.ziprecruiter.com/Salaries/Software-Developer-Sal...)
Some people that work in especially high-paid sub-industries have a mistaken idea of what typical "technical enough to frequent this web site" (?!) people make.
And even if most software developers did make over $100K, it could still be a lot of money? The median income in USA as a whole looks to be about $52K, with $100K being about 83rd percentile (83% of USA makes less than $100K).
I don’t think that zip recruiter data is accurate, apparently the average engineer salary in Sunnyvale is 100k, where I can see new grad salaries are above 120k and do that doesn’t take into account bonuses or stocks.
We can all quibble over the exact numbers but I think the point is well taken: not only does a six-figure salary place you pretty high among American workers overall, but it also puts you in a better spot than many developers. Not everybody gets to work at prestigious tech companies
> Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid.
Sorry, what? Exactly how much technical ability does it take to frequent a website? You have the strangest delusion I've seen on HN and that's saying something.
I just ran a search and found the median US personal income is around $35k. $108k may be low for a tech job but most people don't have high paying tech jobs.
I’m self employed, and had a green card, I paid the accountant 700€ to file the US tax form and paid a couple thousands dollars in taxes because I hit the minimum tax rate.
Which is not what happened, given that he died after he got home. Again, not seeing how this is different than blaming the ambulance because you died in the ER.
What taxes? When I lived outside the US my wife and I would have to make more than ~$300k USD per year before any US tax obligation kicked in. And that was living in a lower tax jurisdiction.
In a country with higher taxes and a tax treaty you could earn $1M per year and never pay the IRS a dime.
That’s only relevant to a tiny percentage of American immigrants who travel/work in conflict zones and unfriendly countries.
It could even be said Americans are more at risk in those countries for being American and no other reason. So for people outside of that there won’t be any benefit.
> only relevant to a tiny percentage of American immigrants who travel/work in conflict zones and unfriendly countries
I know a (thankfully small) handful of cases in which Americans' kids were arrested in a friendly country. The State Department provided invaluable support. (Recommendations on legal counsel, prudent next steps, relevant authorities' phone numbers...nothing nefarious, just context and support.)
I am under no illusion that I, with my resources, would get that sort of access. But it exists, and probably benefits U.S. international business concerns. Since this article concerns itself with rich overseas Americans, I think it's relevant.
I think you're under the impression this doesn't happen with other countries too. That's the job of embassies. Obviously the State Department has more funding and resources, but that's really only relevant to how big of a trouble you got yourself into.
One thing the US has is more bargaining power to force early release of some people accused of crimes (like Liangelo Ball in China, Anne Sacoolas in UK). That's significant leverage, but again: most people will never find themselves in that situation. But even then it's not like other countries will not imprison you if you're American.
Ok, but they're also not very sympathetic. I don't feel sorry for anybody who can afford private security that he has to pay if he wants to hang on to the benefits of US citizenship.
> U.S. citizenship carries extraterritorial benefits. For example, we're pretty good at getting our people out of thorny situations, even at great national expense.
Are we? I’ve been told to use my other passport if ever in a situation like that. Are there any stats that support either case?
That's nothing unique american and quite standard for western democracies. Way more important than military force is legal support and diplomatic weight, to get you extradited, if you end up in your host countries legal system for whatever reason, which is the way more likely thing to happen.
It's not unheard of, that dual citizens renounce their more or less vaguely authoritarian citizenship when it's too dangerous to live or visit there with a dual one. Since then the other state has no obligation to intervene and is even blocked from reigning into the affairs of another nation.
I needed to laugh really hard at this because it encapulates the US citizen's mind so perfectly. Partly because the US lives in my head rent free.
Is it because every single US diplomatic relation is in one way or other tied to the military?
If a jibali captures an operator then fair enough. The US is very preachy about their soldiers. But for a civilian to think about that as a benefit is just wild.
Yes, but we can actually make it happen (relatively quickly).
Last year, Navy SEALs from the Navy's Special Mission Unit parachuted in the dead of night to save a missionary. When's the last time the armed forces of Brunei did that? Or DRC? Or Azerbaijan? The answer is never. Intent != capability. I'm sure Paraguay wishes they could put commandos on the ground anywhere in the world in hours, but the fact is that they can't.
Being American is like having an American Express Card: membership has its privileges.
The Romans might not have been able to air drop centurians into battle overnight, so yeah, you might wind up a martyr for Rome, but when they eventually did get there vengance was a mofo.
> For example, we're pretty good at getting our people out of thorny situations
How thorny a situation has to be? Because I'm aware of a case when an American couldn't bring his own children to the states because his ex wife didn't consent to issue them American passports. Petitions, letters to the embassy and his congressman, nothing helped. A 3rd world country his ex wife's a citizen of had no issue with consents, it just issued passports allowing her to get the kids and leave the country they were residing in.
Most Western countries have some level of extraterritorial benefits. At least in the UK they're nominally "paid for" by the cost of the passport. If you're a dual citizen with another country you have no obligation to get a passport - but shouldn't expect help without one.
But they don't have a MEU sitting off conflict zones waiting to leap into action. The United States will literally send the Marines to save a citizen. A person from, say, Ecuador probably doesn't enjoy the same amount of risk coverage.
You've been watching too many movies, I'm afraid. The reality is (and it happened in Yemen recently) that the US will just shrug and tell you to go ask some other country for help. No MEUs set foot in Yemen when things went south there.
The last I heard, the Houthis let the Americans go.
Navy SEALs from the Navy SMU parachuted into Africa in the dead of night to save a missionary kidnapped from a known conflict zone, killing 6 of 7 combatants (one wonders if they let the last guy go to spread Fear amongst his fellows). Perhaps some of you had different experiences (and/or perhaps the State Department really, really wanted you to leave), but that doesn't erase the rescue of Americans such as this man:
We sent the best of the best in to save him. Not the JV team, the varsity. Before you whine, ask yourselves if perhaps there was some motive to telling you that nobody would help you if you didn't leave. Maybe they were trying to manage their risk.
>That could have been just Trump pandering to his base.
That's pretty weak, you have to admit. Wouldn't Obama send the same men in to save a citizen? I think he would. This is undeniably what our military is for, what those special mission units are for, and what those operators live for. They went in to do God's Work, and luckily this time it worked with no Good Guy casualties. Why would you doubt this?
> How come no SEALs have parachuted to rescue Jeffery yet, huh? Reinforces my theory that it was just election-time pandering by Trump.
Maybe because they don't have actionable intel to find and fix him? Maybe because the Bad Guys weren't so stupid as to use something that would show up on our various SIGINT collection platforms? It's not always a great big Trumpian conspiracy.
> But how did they get out? Who picked them up?
The Omani military, our allies. I suspect more than one person on that flight didn't have an Omani passport.
I remember being in Kenya before the election that followed post-election violence previously (scores dead). Ambassador said point blank, "You need to take care of yourselves. We only have a handful of marines and they'll be spending their time protecting or destroying classified documents."
No, they absolutely will not. I won't go into details but I can tell you from personal experience this is unequivocally false. The USA will in most cases do exactly nothing for their citizens in distress. Even the local US embassies will refuse to get involved in almost all cases.
You know who did get involved in our situation when I was with a group of mixed citizens from USA, UK, EU etc...? The UK and Denmark. France, the USA and Germany all did nothing at all.
This myth that the USA will save citizens from any situation needs to die. It's untrue and dangerous since it encourages Americans to do stupid things because they are convinced the Marines or Seals will come save them.
Except the Marines and/or SEALs do come to save people. Perhaps there are political complications you aren't mentioning. Perhaps you got into trouble in a nation with a halfway-functioning government (so diplomacy trumps men with rifles).
It is provably true the US does send armed forces in to save citizens, and it is obviously true that many other countries simply lack the ability to do so. That isn't a license to be stupid, but it is a differentiator between countries with true power projection capabilities and those who don't have the same.
Personal anecdote: my brother was robbed in Mexico of everything including shoes. He went to the embassy for assistance. He was give some McDonalds coupons and told to use them when he got across the border. He even asked them to check against police records, knowing that he had an outstanding misdemeanor warrant. No go. No help. At least one of the persons at the embassy was honest and told him that embassies only help government officials, rich, or public figures. Fortunately he eventually found a way to get in contact with us (much, much later). In the end the way to get back is to just try to push through a border gate so that you'll get arrested. Then they'll be forced to confirm your identity.
> U.S. citizenship carries extraterritorial benefits.
Since we are stepping out of playing world police, we have stopped doing that FYI in the past 15-20 years incrementally so. This ain't the late 20th century anymore.
The US can’t be bothered to help its citizens living abroad with vaccinations even though it has expiring doses. Other countries have done so, AND without the tax compliance demands.
So let’s drop this extraterritorial benefits stuff. No benefit the US has provided has been worth the worry, anger, and tedium of trying to be tax compliant in a situation where it’s impossible to be truly compliant (thanks to how irreconcilable foreign arrangements often are to US tax law).
What circumstances are those? There are a ton of homeless Americans where I live and the embassy doesn't do anything until they commit a crime as far as I know.
If there is an act of war or natural disaster, the U.S. is good at extracting its citizens. There is also a decent precedent of negotiating to release people taken hostage or held prisoner by unfriendly regimes. (Or causing a fuss when Americans are harmed in a friendly country.) That, in turn, has a deterrent effect.
For Americans with access to legal counsel and the State Department, the benefits expand. Rich, overseas Americans thus present a unique free-rider problem.
For example, Israel goes to extremely great lengths extracting its citizens in trouble (search Operation Entebbe), and no, they don't charge you any taxes if you reside permanently abroad.
Such a gruesome story: Kenyan sources supported Israel, and in the aftermath of the operation, Idi Amin issued orders to retaliate and slaughter several hundred Kenyans then present in Uganda. There were 245 Kenyans in Uganda killed and 3,000 fled.
Amin first escaped to Libya, where he stayed until 1980, and ultimately settled in Saudi Arabia, where the Saudi royal family allowed him sanctuary and paid him a generous subsidy in return for staying out of politics.[18] Amin lived for a number of years on the top two floors of the Novotel Hotel on Palestine Road in Jeddah.
Movie The Last King of Scotland is Based on the events of the brutal Ugandan dictator Idi Amin's regime as seen by his personal physician during the 1970s.
You don't have to go that far back. See the recent Surfside tragedy. Israel sent an elite rescue team and set up relief centers to assist displaced persons, regardless if they were Israeli or not.
> U.S. citizenship carries extraterritorial benefits.
Not sure about actual benefits. The US passports is one of the worst when it comes to travel. Many countries have stricter entry rules only for US citizen, or require at least a higher Visa fee in comparison to other Western nations or outright don't allow US citizens entry at all. I found my Austrian passport to be actually extremely beneficial. Most powerful passport is still from Singapore when it comes to extraterritorial benefits.
In terms of getting people out of thorny situations, countries which don't have citizenship based tax laws are also pretty good at that, if not even better, because the US has in fact a lot of scarred relations with other nations whereas other Western nations have it easier to get a country pull some strings in order to get their people out.
> The US passports is one of the worst when it comes to travel
100% wrong! US passport is ranked 7th best in the world. You need very few visas and get waved through customs faster than visitors from most other countries.
Mostly because the gap in international political reach and leverage, respective economic situations and means are too huge for there to be a point.
Also because I suspect the population here to likely be mostly from Western countries. Cf dang’s comment[1] stating that 50% of the userbase is from the US
Will I think it is relevant because the fact that the passport holder benefits from all that makes it one of the best by any reasonable standard, unless you arbitrarily ignore all the worse ones and then say it's the "worst of the best," so to speak.
And I would argue that it’s like comparing professional Formula 1 drivers’ performance to that of professional kart racers. Or a five stars hotel to a motel by the highway.
But I see your point, and we’ll probably have to settle on agreeing to disagree.
Residency, at least for overseas tax purposes, generally is presumed to transfer whenever (and wherever) you spend 180 days of a year somewhere, so you by definition can't have multiple residencies (unlike nationalities); you can have residency rights/permits in multiple places, but once you become resident somewhere you cease to be resident at your previous country of residence.
Can you live without residence? Say I'm sailing around the world. My home country could be thousands of miles away, pretty much unreachable in a practical way. Should that still count as my residence?
ding You've just discovered another hidden trick that the ultra-wealthy use to minimize their tax-burdens: in each year, they travel and ensure they do not reside long enough in each country to be considered resident fir tax purposes.
It's not really a trick if you don't use the services, especially healthcare or education system. I'd be all in for nomad tax at something sane like 10% or some trade pact that you can get healthcare and edu for free anywhere in the world (already the case within EU).
What do you mean? You pay in the country you live/work in. You get back your pension wherever you are, from every country you've worked for in your life. Sounds pretty fair to me
A pertinent example of the kinds of people this amendment was apparently intended to bar from entry to the US:
"One example discussed was Kenneth Dart of Dart Container, who had become a citizen of Belize and then attempted to obtain a diplomatic visa to serve as Belize's new consul in Sarasota, Florida."
> The Department of Homeland Security has stated that they cannot obtain the information required to enforce the amendment unless the former U.S. citizen "affirmatively admit[s]" his or her reasons for renouncing citizenship, and so from 2002 to 2015, only two people were denied entry to the United States on the grounds of the amendment.
"The wording of the statute is embarrassing. How can an alien renounce U.S. citizenship? In what capacity would said alien do so officially? One assumes that a court of law would find the language incoherent and unenforceable ... This is the way we legislate at 5 o'clock in the morning 4 days before adjournment."
Nice to see lawmakers falling to the specter of trying to get that commit in for the next release, along with the rest of us.
If you dig through legislation it begins to look like a Git repository, with patches adding and removing parts of the content and branches that if successful generate their own patches as well.
Legal documents aren't code, but they do share many of the same principles and constraints - GIGO applies to both programs and contracts...
> The IRS publishes a quarterly list of the names of people who have renounced their citizenship or given up their green cards, but it only includes people with global assets over $2 million
It may be an arbitrary line, but if so, it's the IRS drawing it.
It seems like no one actually knows what the list represents.
> Gibbons expected that the list would include only "a handful of the wealthiest of the wealthy" motivated solely by taxes; however, the people named in the list turned out to have a wide variety of motivations for emigrating from the U.S. and later giving up citizenship, and few were publicly known to be wealthy.[7]
> ...In contrast, Andrew Mitchel, a Connecticut tax lawyer interviewed by The Wall Street Journal for its reports on Americans giving up citizenship, states that the list is required to include all former citizens. [15]
Why does the IRS publish the list of people renouncing citizenship? And why does it filter for people with global assets over $2M? I feel like I am missing something for this to make sense.
> The IRS publishes a quarterly list of the names of people who have renounced their citizenship or given up their green cards, but it only includes people with global assets over $2 million
This claim is total crap. The list includes all US citizens who renounce their citizenship, regardless of their net worth. [1]
You also cannot renounce your citizenship for tax dodging [2]:
> Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect on their U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information).
So plan to become rich after renouncing (and without the IRS noticing).
E. TAX & MILITARY OBLIGATIONS /NO ESCAPE FROM PROSECUTION
Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect on their U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information). In addition, the act of renouncing U.S. citizenship does not allow persons to avoid possible prosecution for crimes which they may have committed or may commit in the future which violate United States law, or escape the repayment of financial obligations, including child support payments, previously incurred in the United States or incurred as United States citizens abroad.
I read that as saying "If you owe the IRS money already, renouncing your citizenship isn't going to get you out of paying it".
>So plan to become rich after renouncing (and without the IRS noticing).
Do you have any other sources that corroborate this? I've certainly never heard of the IRS coming after someone for money they've earned after renouncing citizenship, except perhaps in complex cases involving international companies.
> You also cannot renounce your citizenship for tax dodging
You just pay an exit tax, which is a percentage of your total wealth. The exit tax only applies if your total wealth is over 2 million (or less than that if you haven’t been filing properly).
You are mistaken about the cause of the the Boston Tea Party. It was not about taxation without representation; it was about lack of taxation on tea from the East India corporation (which the King and his friends had a financial interest in). Many of the people protesting were owners in the local tea companies who's product was suddenly undercut because the King did not want to lose money on teas that were not selling in England.
The "no taxation without representation" was a slogan applied after the fact.
Not all of them and even if you are eligible to vote, some states make it nearly impossible to request a ballot. I’ve been removed from the registry multiple times and had to fill out an emergency ballot which didn’t even get counted in the 2016 election.
> This article just happens to have drawn an arbitrary line in the wealth of people who renounce US citizenship and made a headline out of the wealthier subset. The wealthy are also more like to have dual-citizenship but relocate to another country, so they’d be over represented in this set.
This is exactly why these people are renouncing US citizenship: They’re living overseas as citizens of another country and, like anyone rich or poor, don’t want to be paying taxes to a country they aren’t living in.
It’s not exactly unfair or nefarious. If they’re no longer living in the US and they are citizens and residents of another country, surrendering US citizenship is a logical choice.
Renouncing US citizenship is a common move for this exact reason. This article just happens to have drawn an arbitrary line in the wealth of people who renounce US citizenship and made a headline out of the wealthier subset. The wealthy are also more like to have dual-citizenship but relocate to another country, so they’d be over represented in this set.