I don’t know about any of you but when I first heard about FATCA and IRS enforcement efforts against Americans abroad, my first reaction was to think that they were simply blissfully unaware of the consequences. Never attribute malevolence, I thought, to what can easily be explained by ignorance.
Since then my opinion has not really changed but it has been refined by what I’ve read here, by the people I’ve talked to and by my own research. Many trees have died and many bits and bytes have passed through the pipes of the Net in an attempt to educate people and lawmakers. Thus far, to no avail. And that disappoints me. Profoundly. As FATCA sails forward, my elected officials seems quite content to put their fingers in their ears and continue on as if we were all simply talking to hear ourselves talk.
Back in July I wrote a post for the Flophouse chiding the French people for having so much faith in DSK and for feeling so disappointed by his fall from grace. At that time I gave them some counsel straight from H.L. Mencken about the fickleness of the “homme politique.” I think I need to work harder on taking my own advice and that starts by re-reading Mencken’s essay, “The Politicians.” It is futile to rant about the idiocy of elected officials. We all need to remember that what they are today is what they always have been: Happily Mencken is still around in spirit to remind us of this:
Their primary error lies in making the false assumption that some politicians are better than others… I propose that it be renounced and contend that its renunciation would greatly rationalize and improve our politics. I do not argue that there would be any improvement in our politicians; on the contrary, I believe that would remain substantially as they are today, and perhaps grow even worse. But what I do argue is that recognizing them frankly for what they are would instantly and automatically dissipate the indignation caused by their present abominations, and that the disappearance of this indignation would promote the public contentment and happiness. Under my scheme there would be no more false assumptions and no more false hopes, and hence no more painful surprises, no more bitter resentment of fraud, no more despair.
Politicians, in so far as they remained necessary, would be kept at work – but not with any insane notion that they were archangels.
Victoria, what this does is it sends a very clear message that they want true “patriots” to live in America, and to only go overseas under the bidding of the US Government (military, foreign service, etc..)
It’s no secret that the US Gov. uses taxes as an incentive or disincentive. For example, US military pay taxes to America when living overseas, but should they volunteer for assignments in war zones they will be exempt from taxes. US Expats, on the other hand, have onerous reporting requirements placed upon them, and double taxation is almost unavoidable. It’s a very one-sided relationship because we receive no benefits. We aren’t even counted in the census! This is what we receive for being outside of US control.
The rules penalize every class of American who resides overseas, even for someone who has a simple low-paid salaried job. Most things that are tax deductible in America are not tax deductible overseas. God forbid that an American starts a business and creates real economic activity overseas because the rules are much more onerous. These rules existed before the FACTA, and I imagine it will continue way beyond my lifetime.
I think we as US Expats have to decide: do we want to be heavily penalized for living overseas, or do we want to live free? For me, it is as simple as that. I think what people are doing here is good – like sending letters to reporters and politicians – but I’m not optimistic. It’s no easy task to change the mindset of 300 million people when the government is clearly against you.
As I have heard throughout most of my life, “you have to go with the flow”. It’s not like I want to renounce; I just don’t want to return to America because now I have obligations overseas. But I’m not going to waste so many hours filing paperwork, or afraid to make money because I will risk double taxation. I think any level-headed US Resident Citizen could understand this. The only way out is to renounce.
I’ve been doing a lot of thinking about this, geez. I never realized how much compromising I have to do to both live in my host country and be an American.
What I really want to do is work as an independent consultant. As Mencken once said, “No matter how long he lives, no man ever becomes as wise as the average woman of forty-eight.” I’m 46, tired of working for other people and I’ve got a few tips and tricks I’ve learned over the years to make IS systems better and IS workers happier. I’d like to write more on the side – maybe a book one day. But the tax situation would be way too complex and so I’m looking for another full-time job with a company. Oh, and I can’t make too much money because then I’ll be over the FEI cap and the exchange rates might be a problem and so on.
I paid 1,500 USD last year in U.S. taxes. I will pay the same this year. Plus the fees to the tax professionals – another 500-1000 USD. That is on top of French taxes. Less money for my Frenchlings and their college funds. Oh and I’m unemployed right now so this hurts.
I’ve started closing accounts. These are accounts that were declared on my FBAR but it’s just too much trouble every year to have to hunt down multiple accounts in different places and I’m afraid to miss one. So, I’m consolidating and I’ll take a hit when I take the money out and transfer it.
And so on, and so on, and so on. But I won’t move. I’m happy here. We might expatriate again if we find some really interesting work in a place we like but I think we’ll always come back here to France.
So why exactly I am putting myself through all this? Some days I really wonder….
Don’t put yourself through it. I’m also tired of “just doing OK” for fear of getting taxed twice or having to file a bunch of hard-to-understand papers. Yes, there are tons of studies that prove that taxes influence peoples’ everyday decisions;
I bet that when I finally get around to going back to America, I highly doubt that my cousins and everyone else are going to treat me differently because I use a different coloured passport. All I have to do is pull up some of these mainstream media articles to show them. The problem is that the USG doesn’t want them to see those types of articles, so they get buried in worthless articles about the Kardashians.
Plus, given how the US loves to make everyone citizens, I doubt that anyone would be denied citizenship again if they ever want it back. From my understanding, the underlying premise for letting someone retain US Citizenship is when they are pressured into giving it up. I think that everyone who has given it up or is going to give it up has felt pressure from the recent US laws. Me though… I don’t want it.
I have prepared a short list of my reasons to renounce
Do not believe in passports of convience, therefore dishonest and unethical to possess passport of a country that I feel no alligennce to
I am ashamed of being a US citizen because of American foreign and domestic policies
The US represents the greatest security threat to Canada; through its efforts to internationalize the NorthWest passage
The US represents the greatest threat to Canadian soverentty through repeated attempts to apply US law extraterritorially
The US advocates denial of personal rights and violation of local law: FATCA as an example seeks to deny my rights to privacy and acces to basic banking services. It also requires financial institution to conduct ethnic profiling of custormers contrary of Charter of Rights and Freedom