In light of the United States’ tax jihad against any person born in the United States, even those possessing the dominant nationality of another nation, I would like to explore the possibility that Canada take the lead in making post-natal changes to one’s place of birth. I could perhaps legally change my middle name and have my place of birth re-assigned to Canada, and then I would be able to cross the US border as a native-born Canadian.
The Province of Ontario has now set the precedent for changing a birth certificate in order to better reflect a person’s true feelings about their gender. Whether you agree with this or not, Ontario is now recognizing transgendered people’s right to determine their own gender, even without surgical interventions. The National Post reports:
New rules that have recently come into effect allow transgender people born in the province to apply to have the document amended by submitting a letter from a practising physician or a psychologist.
Susan Gapka, chair of the Trans Lobby Group, hailed the change as a crucial step for the transgender community in having their gender identity recognized.
“We’re going to celebrate this victory — because it is a victory, it’s a giant leap forward,” she said.
“Trans people’s identification will more easily match their presentation to the public.”
Well, I’m also a trans person. I am a trans-national. So therefore, I should be able to get the government of Canada to change my place of birth to better reflect my presentation to the public. My place of birth could now be listed as “Toronto, Ontario” where I made my oath of fidelity to the Queen of Canada.
This little change in the birth certificate and by extension, the passport of Canada, could solve a conundrum for thousands of people in Canada whose connexion to the United States does not include loyalty and solidarity but only place of birth. It is a simple solution that the government of Canada could quite easily implement which would reflect the dominant and effective nationality of Canadians whose only blemish is their United States’ birthplace.
@Roger: This idiotic tax bill did not pass, …
If you’re referring to Ex-PATRIOT, it’s still a little too soon to be writing its obituary. From Govtrack: “Referred to Committee May 17, 2012, Reported by Committee (not yet occurred)”.
*WhoaIt’sSteve, “hatred spewed towards the US” is more likely that which is financed by the US in the middle east, the result of white colonialism in Zimbabwe, survivors of the Vietnam war or European neo-Nazis. What you have here is probably mostly political criticism from which the US government could benefit if it gave it an ear.
Having a US birthplace listed on some documentation wouldn’t be a problem if it didn’t result in national origin discrimination, identity theft or other security risks, such as targets of religious extremism. Yet, since such problems do indeed exist, it can be normal and understandable for people to not wish to be associated with risk for their own safety.
@Badger,
Very well said. Steve is probably a “homelander” and will never be able to understand the grievances of longterm ex-pats unless he were to permanently move outside the US and cut his own path through the wilderness.
I seem to recall Steve once referring to ex-pats as a bunch of ungrateful “whiners,” which is probably what the British thought about the American colonists a couple of hundred years ago.
The result will be the same. The colonists made a collective declaration of independence. Todays ex-pats are doing the same, albeit individually.
No self-respecting person can willingly and “gratefully” live in shackles and chains just because s/he happened to be born in America.
I wonder what theory might explain why George Clooney, Ohio union members, and rednecks are voting for a re-election.
Why would a Brazilian want to keep an extra US citizenship if he has settled in southeast Asia?
Thank you @Patrick Henry,
re; “The colonists made a collective declaration of independence. Todays ex-pats are doing the same, albeit individually.
No self-respecting person can willingly and “gratefully” live in
shackles and chains just because s/he happened to be born in America.”
Or because his/her parent was born there. I question the validity of being born abroad (ex. Canada), yet inheriting a lifelong tax burden and responsibility for any portion of the debt of a ‘foreign’ country – the US. Which the US is to those born in other countries who merely happen by chance, to have a US-citizen parent or two. Holding those born and resident in Canada or elsewhere responsible to provide revenue on demand to the US is a travesty that the US should be publicly excoriated and shamed for.
@badger
Thank you for putting into words what lies in many of our hearts. If Steve doesn’t understand after reading that, then perhaps he isn’t worthy of the effort.
*@badger, far be it for me to tell or even suggest what other countries shold or should not do, but if I were them, I would put my collective feet down by denouncing the tax treaties that all of them that have tax treaties with the US have accepted and signed which grant the US authority to levy and collect taxes fromUS persons who are bona-fide permanent residents of their countries.
A few of them which have controls over foreign exchange transactions currently do it indirectly by denying such persons access to US dollars to be removed and remitted abroad to the the IRS in payment of such taxes, but most of them just passively accept it as if they had no sovereign power to say NO
Why they refuse to assert their sovereignty in this matter is beyond my understanding.
@Patrick Henry
Perhaps the whining Whoaitssteve hears is because we may appear to be speaking from a defensive position. Persecution will do that to people. It would certainly be liberating to have a voice, yet the nature of our position renders many to stay in the shadows. Not wanting to ‘blame the victim’ here, but that to me is what is most frustrating about this predicament and in part allows the abuse to continue.
@Badger, Oct 14, 11.42 pm,
You explained the situation, and its many aspects, so clearly and eloquently that I think if a person reading didn’t understand, it would be because they really didn’t want to understand.
Perhaps if an American has trouble grasping your explanation, they should try reading it pretending that they’re hearing this from their next-door neighbour, a US citizen who resides in US, but was born in, say, Denmark, and Denmark was the country doing this to Danish-born Americans.
And another thing, I resent the US govt and media portrayal of everyone who chooses to be a uni-citizen of their home country as being, or having been, motivated by tax evasion or tax cheating. I think the current United States is obsessed with tax. There’s a lot more to citizenship than taxes, but I don’t think Americans today understand that. The whole thing is very crass.
@Roger, re; “Why they refuse to assert their sovereignty in this matter is beyond my understanding.”
I would like to know what Canada gets out of the current arrangement, which seems so lopsided, and which sucks revenues out of Canada’s economy. That is a very good comment you posed – and I will use it when next I speak to a Canadian politician. I am awaiting a conversation with a representative of a federal party, as a result of asking about FATCA, and I intend to ask about this as well.
Tim (or others here) may be able to speak to the history of the reciprocal tax treaty involved here – but I don’t get why the US and Canada tax treaty was not updated to reflect the issue of ‘foreign trusts’ – like the registered savings vehicles – particularly the TFSA and now the PRPP – personal favourites of our Finance Minister Flaherty, and our current Conservative government. How can a Finance Minister sponsor and promote savings vehicles for Canadians, while knowing full well how the US views and penalizes them for >1million inside Canada? How can Flaherty deliberately continue to officially promote our use of them, without adding an alert to those aprox. 1/32 here, who are deemed ‘US taxable persons’ in Canada – while being hyper-aware by now that the Canada/US tax treaty still does not even recognize the legitimacy of RESPS, RDSPs, etc. and that even RRSPs still require an annual election?
Why has the reciprocal treaty lagged so badly in addressing head on the issue of Canadian registered savings – which affect so very many households in Canada, and weigh us down in the mire of complex IRS reporting (ex. 3520/A, plus FBAR) and penalties, despite being entirely legal, registered with, and controlled by the CRA?
Why so long between substantial updating?
See:
http://www.fin.gc.ca/treaties-conventions/in_force–eng.asp#UnitedStates
United States
The Convention between Canada and the United States of America, as amended by the protocols signed on June 14, 1983, March 28, 1984, March 17, 1995, July 29, 1997 and September 21, 2007.
The Protocol Amending the Convention Between Canada and the United States, as signed on September 21, 2007.
The Convention between Canada and the United States of America, as amended by the protocols signed on June 14, 1983, March 28, 1984, March 17, 1995 and July 29, 1997.
– return –
@badger
please add capital gain tax on the sale of a principal residence to your bag of complaints about the treaty! (or is the ‘mis-treaty’).
@Roger Conklin:
“if I were them, I would put my collective feet down by denouncing
the tax treaties that all of them that have tax treaties with the US have accepted and signed which grant the US authority to levy and collect taxes from US persons who are bona-fide permanent residents of their countries.”
First of all the IRS is bringing the dream of being able to monitor and tax the income and wealth of the rich to each of these FATCA partners. This is quite a tempting morsel because it is precisely the reason why states have such difficulty increasing tax revenue by raising taxes. It is because the “rich” tax cows move their money and change their investments. Its like squeezing a balloon. But if you can set up a corralito around their wealth then you can jack up VAT to over 20% and income taxes to 75%. So all the other welfare states, especially including CANADA are not resisting the US treasury. Their rulers don’t need the revenue of the expats but they do need the revenue from 75% income taxes on the homeland tax slaves.
Second of all they don’t resist because they know what happens when a country crosses the emperor and his bankers who finance the empire. Take Wegelin bank, or UBS, or Iraq and Iran.
Third of all their banks need those freshly generated dollars just as much as the US banks do. They do not want to be isolated from the reserve currency money machine. And now they have seen the hyperinflation building up steam in Iran, one of the few remaining countries that dares defy the empire. But they also realize that the less money printing they engage in and the more tax revenue they can pluck off the tax slaves the longer their rigged game will go on.
*@ConfederateH
There is not a country in the world that levies a 75% personal income tax rate. Not even a marginal tax rate at that level, and not even when you include state, province or canton tax. And even when you add social security/social insurance/national insurance contributions http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
Even if somebody has a company and pays out profits as a dividend and then pays state (or provincial) plus federal income tax. And certainly not if you pay it as salary deductible from corporate income, even if you include payroll tax and FICA.
*@bubblebustin
please add capital gain tax on the sale of a principal residence to your bag of complaints about the treaty! (or is the ‘mis-treaty’).
“When you sell your home, you may realize a capital gain. If the property was your principal residence for every year you owned it, you do not have to report the sale on your income tax and benefit return.” http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html
The USA (up to $250,000 or $500,000) and the UK (unlimited) likewise forgive from tax capital gain on a main residence.
There are lots of anomalies such as 1031 exchanges and QDOTs under US tax law not recognised abroad. But the main residence allowance is not one of them, in many countries.
*@Roger Conklin
Tax treaties are drafted largely with industrial and commercial taxpayers in mind. Even the provisions benefiting individuals tend to have their origins in powerful lobbies such as the major accounting and tax-law firms.
It is expensive, and difficult–sometimes impossible–for many cross-border taxpayers to comply with the minutiae of the tax laws applying to them. One sometimes wonders whether the respective national Treasuries like it that way: by maintaining a climate of apprehension and keeping many or most in a situation of irregularity they collect more tax. It’s easy enough for the IRS, say, to audit a resident taxpayer but auditing a foreign-based taxpayer without domestic assets or income is unlikely to yield worthwhile additional tax revenue.
Well, Sweden has a 52-53%% marginal tax rate, and 29-35% salary-company social costs prior to the salary leaving the company. 0.47 * 0.7 = 30% to 35% take-home-pay.
Then 25% VAT.
@punktlich11
Our net gain exceeded the $500k tax credit for my husband and me, resulting in a 6 figure US tax liability and penalty on the sale of our home in Canada in 2008. Wasn’t so long ago that US tax payers could reinvest the proceeds in another home and not be taxed on it. Not so anymore. Surely this liability is a sign of some unsophisticated tax planning, isn’t it?
@Punktlicht:
“There is not a country in the world that levies a 75% personal income tax rate.”
France just imposed a 75% tax rate.
Under Roosevelt, the top rate was again raised—first to 79 percent and
later to 90 percent. In 1941, in fact, Roosevelt proposed a 99.5 percent
marginal rate on all incomes over $100,000. “Why not?” he said when an
adviser questioned him.
“In it he [Obama Sr.] talked about concentrations of wealth at the top and how you
can bring those down. He recommended state confiscation of land and he
also recommended heavy taxation up to a limit, but theoretically he said
there’s nothing wrong with a 100 percent tax rate as long as the money
all went to the state,” D’Souza observed.
@pacifica, re; “I resent the US govt and media portrayal of everyone who chooses to be a
uni-citizen of their home country as being, or having been, motivated
by tax evasion or tax cheating”…
And that deliberate misrepresentation, coupled with the lack of an effective voice, as @bubblebustin identifies, is why we continue to be actively endangered.
The IRS uses that convenient propaganda language of ‘cheats’ and ‘evaders’ as a deliberate strategy: to deflect scrutiny, legitimate criticism, and public attention; and to defend and obscure what it is actually doing. There is no defensible reason why substantial numbers of individuals who are already tax compliant where they live or were born (outside the US) should be exposed to onerous filing, double taxation and dangerous pitfalls merely based on being born, or conducting normal lives and banking outside the US, via the plethora of complex and labyrinthine ‘reporting’ forms and issues (like FBAR, 3520/A, PFICs, etc.) – especially where NO actual US tax is owed. We should not need to hire expensive specialized crossborder experts in order to be safe from inadvertant errors, omissions, and life altering penalties, and to stop from being taxed by two different governments.
The public statements from the IRS and Treasury about those abroad who ‘aren’t paying taxes’ deliberately avoids any acknowledgement that we already pay taxes – where we live and earn. They also deliberately avoid mentioning that for those actually living abroad, and having to bank locally, our bank accounts and savings are entirely legal, transparent to our home country governments, and are already post-tax here. It is a deliberate and conscious ploy of the US, IRS and Treasury not to make any of the obvious and critical distinctions between those living inside the US, and those living abroad. And even those inside the US have legitimate reasons to hold bank accounts in other countries. This is really about protecting the interests of US banks, sidestepping double taxation provisions of tax treaties, and working around the FEIE and Foreign Tax credits to invent and enforce an alternate revenue claim on us.
If this was not the case, the IRS would have no reason to continue to oppose the FOI requests for a breakdown of the penalty revenues collected in the OVD programs, and for stats on how much was from information form reporting penalties rather than actual US tax assessed and owed. The IRS is hiding that information because it would demonstrate that they have created quicksand traps to capture penalty revenues based on forms, rather than on actual US taxes owing. They’ve done nothing to make it easier to comply with the forms, and ignored their own GAO and TIGTA reports, and the reports of US tax and law professionals identifying the significant problems with FBARs and FATCA forms and the heightened potential for innocent error – ex. http://www.accountingtoday.com/news/NYSSCPA-Wants-IRS-Clarify-Foreign-Asset-Reporting-62354-1.html http://www.gao.gov/products/GAO-12-403 ”
Reporting Foreign Accounts to IRS
Extent of Duplication Not Currently Known, but Requirements Can Be Clarified”
GAO-12-403, Feb 28, 2012″
The IRS knows that its ‘education efforts’ re the FBAR – that it was required to undertake by Congress, were pitifully inadequate, and not directed to the actual millions of potential filers of these forms from ‘abroad’: see the list enumerated in ‘Education and outreach activities encouraging filing compliance’ from http://www.treasury.gov/tigta/auditreports/2010reports/201030125fr.pdf. “New Legislation Could Affect Filers of the Report of Foreign But Potential Issues Are Being Addressed” Reference Number: 2010-30-125 . The IRS chose to fund enforcement, and skimp on ‘education’. It in fact pretends that enforcement IS education. They say “The Internal Revenue Service’s role in combating the area of nonfiling
is that of outreach, education, and enforcement of the tax laws”. Well, there has been precious little evidence of ‘outreach’ or ‘education’ for those abroad – but no shortage of Shulman’s proud “relentless and myopic focus on priorities” – that is to say, enforcement only. The shameless cancellation of the IRS help sessions at embassies and consulates in Canada and elsewhere, at the same time as they were urging all non-filers abroad to fess up and join the OVD programs are concrete evidence of their actual priorities.
It is the IRS, Treasury, and Congress who are evading their responsibilities to those they insist have a lifelong duty to the US as ‘taxable persons’ ‘abroad’, demonstrating at best – their deliberate and ‘willful blindness’. It is only reasonable that those exposed to this arrogant and unethical overreach would seek to remove themselves and their families from this very real threat. It is not ‘evading taxes’ to protect oneself from the unjust and unethical application of capricious and confiscatory laws. Should we be compelled to allow ourselves and our family to be annually placed in harm’s way – for life?
What duty of care does the IRS, Congress and the US Treasury owe us as citizens – though we live abroad? How well are they performing that duty – if at all? A commission is being proposed by Representatives Carolyn Maloney and co-sponsor Michael M. Honda, to ‘study’ our situation – and the US will be asked to spend a paltry sum (3 million per year over 2 years) – to produce a report that they no doubt will never act on (if the commission is even funded at all) http://www.nytimes.com/2012/07/31/us/politics/presidential-commission-sought-on-us-expatriates.html. Remember that President Jimmy Carter attempted to assist citizens abroad, and identified significant issues, including taxation in his 33 years ago, in his “Report on Equitable Treatment of United States Citizens Living Abroad” United States Citizens Living Abroad Letter to
the Speaker of the House and the Chairman of the Senate Foreign
Relations Committee.
August 27, 1979 http://www.presidency.ucsb.edu/ws/?pid=32797
The US, Treasury, and the IRS have no interest whatsoever in bringing any of this to light. That “..Timothy F. Geithner, the Treasury secretary, praised Mr. Shulman’s
efforts, saying that he “has helped make the nation’s tax system more
fair, efficient and effective.”” http://www.nytimes.com/2012/10/11/business/douglas-shulman-head-of-the-internal-revenue-service-to-step-down.html?partner=rss&emc=rss&_r=0 is to underscore that we will find no justice or fairness from the US Congress, Treasury and the IRS. Other than Nina Olson, the Taxpayer Advocate, all indications show that the IRS is not interested in applying ‘fairness’ to the situation faced by US taxable persons living outside the US – and that includes their treatment of compliant ‘filers’, who face the same dangerous complexities year after year, and the exponentially growing annual expense of obtaining professional assistance.
We have the internationally recognized right to choose citizenship, and if we choose not to remain citizens of the US, we should not be impeded or have to buy out our freedom for $450. plus 5 years IRS ‘compliance’ – which comes at an incalculable cost for many – and may become even more difficult to achieve.
The IRS will not even deign to explain what exactly ‘5 years compliance’ means, or to clarify the situation of those who renounced decades ago.
@bubblebustin – I’ll call it the Canada/US Mis/Treaty from now on – love the turn of phrase.
As far as I can see, the Obama campaign has mentioned zilch about Romney’s offshore bank accounts for some time.
*@Badger, in a nutshell there is no consensus as to what constitutes fairness. What the legislators who write US tax laws consider as “fair,” is 180 degress out of phose with what those with US citizenship who live abroad consider as fair, and vice versa.
I cast my lot with those who live abroad and will maintain this position until I breathe my last breath, but the Levins, Schumers, Grasslys, etc. in the US Senate take a totally opposite position.
@Roger
and how many in the US media revel in the keel hauling of USP’s abroad over those aforementioned career barnacles in Senate.
Regarding Barry’s mention of baseball Mitt’s accounts, of course the sh_t flows in waves, but he would have had to admit that it is his own administration that is in charge of the IRS—– and if anything had been wrong with Mitt’s accounts, it would have been Barry’s Merry Men in the IRS who should have caught it. So, if Barry were to damn Mitt, then he could only be daming his own Executive Branch.