#americansabroad can’t even get empathy from “homelander” parents isaacbrocksociety.ca/2012/12/27/fat… – How can the #FATCA attack be better explained?
— U.S. Citizen Abroad (@USCitizenAbroad) December 28, 2012
I am either a fool or an optimist but I believe that 2013 will be the year that the plight of U.S. persons abroad will begin to be heard. In anticipation of that, it is time to think carefully about and to sharpen the message. What is clear is that:
– Homelanders don’t seem to be able to understand how “US citizenship abroad” is next to impossible;
– the Democrats which have the power to do something about this don’t seem to be willing to do so. The recent “form letter” from Democrats Abroad is proof of the way that the Democrats have betrayed U.S. citizens abroad (and I am not sure why). No doubt some of you reading this will default into “The Republicans are just as bad” mode. We don’t know that. What we do know is that the Democrats are a big big problem. It may be as simple as the following mindless reasoning:
Homelanders can’t understand Americans Abroad.
Democrats are Homelanders.
Therefore, Democrats don’t understand Americans Abroad
Hell, Geez comments that he can’t even get this parents to take an interest in his plight (they might even have voted for Obama). I think the problem is captured in the following comment exchange to a recent New York Times article:
_____________________________________
- Ex-patriot soon to expatriate
- Canada
In addition to paying taxes, residents of other countries who were born in the U.S. are required to file mountains of “information returns” at great cost. Failure to file will subject the person to huge penalties – generally $10,000 per return.
Furthermore, these “US persons” are disabled from normal retirement planning and investing (including mutual funds and some pension plans). It is a huge problem which has led to an acceleration of renouncing U.S. citizenship.
For these reasons, US born children are not good candidates for adoption to non-U.S.parents.
In addition. people born in the U.S. are not desirable as:
– business partners
– marriage partners
– shareholders
– employees
The US is the ONLY country that behaves in this way. It is absurd and dangerous.
Search on google: “citizenship-based taxation” “FATCA” “FBAR” “PFIC” “renounce citizenship”
-
- Mark Thompson
- Chicago
Those born in the U.S. are automatically U.S. citizens and therefore should be obligated to comply with U.S. laws regardless of country of residency.
Of course, one could renounce your U.S. citizenship & relinquish your passport.
However, I don’t see why a non-resident U.S. citizen would think they shouldn’t have to comply with U.S. laws regardless of how other countries handle the same situation.
-
- Tom Storm
- Coolangatta, QLD. Australia
While I understand the plight The Russian Government faces with orphans, the tragedy really lies with the children themselves and I hope the Russians act in the best interests of their kids. Most American adoptive parents treasure their children and offer love, security and a life of opportunity. A Russian orphan could do a whole lot worse than be adopted by an American family.
On your other point about taxing Foreign residents – the US and Australia (for example) have a taxation treaty which avoids double taxation. If Australia taxes a US Citizen or resident the double tax agreement kicks in and no tax is due in the US on the Australian income. And vice-versa.
The US has these arrangements with numerous countries – the following IRS link is a starting point.
http://www.irs.gov/Businesses/International-Businesses/United-States-Inc…
Tom Storm
______________________________________________
What can one make of this comment exchange? I believe these three comments tell us a lot about the dialogue between US persons abroad and Homelanders.
Comment 1: Ex-patriot soon to expatriate could be found on this site. It explains the problems of US persons abroad. But, by focusing on the result it avoids discussing the foundations of citizenship-based taxtation.
Comment 2: Mark from Chicago is a bit like “Brave Jim in Houston”. He believes that US citizens should obey US law not matter where they are. His reason: you are a US citizen. This reasoning assumes that citizenship is a form of ownership.
Comment 3: Tom Storm is the Professor Ackerman of Australia. There is no problem because there is a tax treaty that prevents double taxation. This comment assumes that citizenship-based taxation is okay, but then avoids the issue by saying that because of a tax treaty there really is no problem.
Since Mark and Tom clearly assume that citizenship-based taxation is justifiable our educational endeavors need to focus on citizenship-based taxation. We need to work on how this is described. The focus needs to be on the fact that citizenship-based taxation is really code for “taxing the residents of other countries and forcing them to pay tribute to the U.S.”
I encourage comments on what should be the correct language to educate Homelanders.
When will we meet to burn blue passports?
Can it be done outside the embassies without getting shot at?
Possibly it is better to do in the city Squares—-some of us cannot travel to the Capitol cities where the consulates and embassies are.
Wear your US person t-shirts—-bring your US flag with the hole cut out where US Citizens abroad used to be.
It may be possible to do something to symbolize the damage to US exports caused by abusing Americans abroad.
Instead of promoting US made products, what if Americans abroad start organizing boycotts of them? It is one thing for foreigners to boycott US made products, it is something completely different for Americans abroad to do it.
Boycotts might wake up the US corporations to get on the side of ex-pats instead of conveniently discriminating against them in favor of hiring non-US persons.
http://wiki.answers.com/Q/Why_did_many_colonists_boycott_British_goods
http://rense.com/general36/boycottofamerican.htm
*@FromTheWilderness, I am afraid that, comparatively speaking, the relatively few Americans living abroad who are not directly involved in promoting the sale of US-made producs in the export market is so small that refusing to purchase made in USA products would not even produce a detectible blip in exports from the US.
Take the case of the US company that built a factory in China. It was totally equipped with imported capital equipment made in Germany. It was not a boycott of US-made products, but due to the fact that while various German firms were banging on his door to sell their products, not a single person showed up representing US producers of these kinds of products. And the German companies also have extensive networks in China stocking spare parts and providing technical support for what they sell.
Generally to purchase American products abroad you have to go searching to find them whereas imported products from other countries are much more readily available. There are exceptions of course, but this is generally true. There is no doubt that this situation exists because US tax laws pretty much dictate that American companies must hire foreign mercinaries from other countries because using US citizens is far too costly,
Suppliers from other countries are never confronted with this disincentive to export since their citizens are only subject to taxation by the country where they live and never subject to double taxation by their country of citizenship.
And citizens of other countries are not denied the ability to open bank and investment accounts in the foreign countries where they live because their governments do not demand that foreign banks violate the privacy laws of the countries in which they operate by providing confidential banking and financial information to their home country tax authorities.
It has been about a year since I found out about this mess.
1 Senator (Rubio) didn’t answer my letters or calls, the other (Bill Nelson) wrote he was not going to change. The rep didn’t answer.
I moved states, one Senator doesn’t like FATCA, the other says he will Watch how FATCA plays out. I am waiting for a representative to give a response.
I have contacted 2 or 3 medias–no response.
What are the remaining options?:
—renounce–not an option, wouldn’t be successful anyways
— enter OVDP/OVDP?: you know the answer to that
—Wait and worry?
Objectives
—US persons must find out what is happening to them. You can’t fight for common rights if people don’t know their rights are gone.
— Other parties must understand what is happening to us, so that they can lend support to our cause.
— What are the alternatives? Wait? How long? Meanwhile, did you incriminate yourself for 2010 tax year with form 8938 or are you also now in deeper sh_t each year?
@Roger,
From what you wrote above, it seems like a de facto soft-boycott has already been self-imposed, compliments of Uncle Sam.
Hmm, there must be a way to get US companies on the side of American ex-pats. Ironically it was the Hire Act with its FATCA provisions that really pushed the hiring of Americans abroad over the cliff.
@geeez,
There is a much cheaper program for citizenship in Paraguay, which is closer to your neck of the woods than Spain and it has pretty good visa-free travel–pretty much all of South America and all of Europe.
http://tdvpassports.com/
http://www.doyouneedvisa.com/passport/Paraguay
*
*@FromTheWilderness. The US citizenship-based tax policy has resulted in a massive change in corporate mentality in the US. To illustrate this when I lived and worked in Brazil my four children attended the American School in Rio de Janeiro which provided them with an excellent bilingual education in both English and Portuguese. That private school had originally been started with a substantial contribution of the US State department for children of diplomats and the American business community. Many US companies manufacturing and/or sales operations purchased shares in that school so their expatriate employees could receive an education which would qualify them for entrance into both US colleges and Universities as well as Brazilian institutions of higher learning. In 1970 95% of the approximately 1000 K though 12 students were US citizens.
It was general corporate policy in the US that one of the qualifications for appointment as CEO of a major US corporation was that the person would have spent a tour of duty at an overseas subsidiary of a US corporation. International experience was an important basic qualification for such a position. In those days the US dominated the world export market as the #1 exporting nation in the world.
Then came the Tax Reform Act of 1976 which so horrendously increased the US taxation on US expats that hundreds of thousands of them came home. There were several US companies, like General Motors for Example, that had their Latin American headquarters in Rio de Janeiro. Sears Roebuck had major department stores in Brazil’s principal cities. The immediate result was that hundreds of thousands of US citizens were sent back home or returned on their own because the additional compensation they would have to have received in order to survive made theme fro 3 to 5 times more costly than citizens of any and every other country. GM transferred its Latin American headquaet4ers to Coral Gables, and Sears shut down or sold its retail stores in Brazil, as did many other American owned corporations with a presence there. I was one who came home.
Today the American School in Rio de Janeiro still has about 1,000 students, but 85% of its students are non-Americans. And about half of the remaining 15% have dual US-Brazilian citizenship.
It became to costly to send US expats abroad that US corporations, by and large, avoid it like the bubonic plague. No longer to the leaders of American corporations have any real exposure to the international market. The unique US policy of US citizenship based taxation is, in my opinion, largely responsible for the destruction of the US corporate interest in having anything to do with the world export market. The US is still #1 in the world in GDP in terms of manufacturing, but first it slipped to 2nd place behind Germany (with an econo9my between 1/4th and 1/5th the size if the US as the largest exporter and now the US is #3 behind China. I have little hope that this can ever be turned around as long as our tax policy continues to brainwash Corporate American that the world export market just isn’t worth it. The don’t understand it and have to hire foreign citizens from abroad and move them to the US in order to acquire this understanding.
*@FromTheWilderness, there’s a de facto boycott by many of us US expats on
travel to the US, though I don’t know how much impact that has on their tourism revenue, or if it’s even noticeable. A broader travel boycott might be easier to organize than a boycott of US made products. Besides the expatriate tax issue there’s also the danger from widespread gun ownership in the US that could motivate people to avoid tourism there until things improve.
@Roger,
Thank you for the explanation in a historical context. You are one of the few Americans living in the homeland who really understands the issues.
Products are quite difficult to be seen. Money can easily be seen—-Wash DC would have to be idiots (they are) to not see that non-resident aliens and US persons overseas have 2 choices—-either send Everything except $9999 back to USA, or to get all of their assets as far away from USA as is possible.
A protest action needs to be planned.
AnonAnon,
I personally avoid purchasing US made products where I live. Perhaps its my own form of silent protest against the injustices levied upon Americans abroad.
I would prefer not to get into the gun ownership debate. As a modern day pioneer of sorts, I am probably on the other side of the fence from most others on this site. Therefore I would rather save that issue for other blog sites.
*@AnonAnon, I am sure that there indeed already is a boycott of US expats who live within easy driving distance of US – Canada border who have been accustomed to driving south for the day to do some shopping at US shopping malls and then head back home. Now that dual nationals have to show passports to enter the US the showing of a Canadian passport which indicates the person was born in the US may well be causing many to decide it is not worth the risk, given the IRS jihad againsts expats living abroad to make sure they are paying every penny they owe to Uncle Sam. This no doubt is already being felt alonng the US side of the border, but until and when non-expat Canadians adhere to this boycott the resulting effect will likely be minimal. This would have to be for national sovereignty reasons rather than personal tax reasons.
Perhaps those of us who live in the US should be asking our Congressman and Senators to investigate why Homeland Security border control personnel are so lax in allowing dual Canadian-US citizens to enter the US using Canadian passports since the law clearly states that US citizens with dual citizenship absolutely must use US passports when entering and leaving the US.
Using foreign passports rather than US passports is strictly enforced on flights to to the US from other countries. They are simply denied boarding if they do not present a US passport or a CLN with their foreign passport. Why should US citizen dual nationals living in Europe, Latin America, Mexico, the Caribbean, the Middle East and Asia be treated any differently than US-Canadian dual citizens who live next door in Canada?
I have no interest in creating unnecessary difficulties for US-Canadian dual citizens living in Canada, but it might well increase the focus on negative impact US citienship-based taxation has on dual citizens in Canada and their vital contribution to the US tourist industry. Living in MIami as I do, I am well aware of the presence of Canadians who come here to enjoy the mild winter weather and flee the frigid north during the winter months. There are several real estate brokers here who specialize in both English and French speaking Canadians.
I would love to read comments and opinions from North of the Border on this.
That reminds me of a quote from Abraham Lincoln (I think):
“The best way to get a bad law repealed is to enforce it strictly.”
Now that the tax part of the fiscal cliff is over, the Ways and Means committee is highlighting tax reform in its website again, specifically its international aspects. Chairman Dave Camp is also talking about it again. The debate is still focused on corporations, but the discussion draft does say “individual tax reforms to be provided”. There is an email for comments about international tax reform: wmtaxreform@mail.house.gov. I sent my comments last year, I’m thinking about sending my bill draft now, and maybe more of us should send comments too.
@Roger,
I live with 100km of the border (as do most Canadians) and I don’t know when I’ll feel comfortable going to the US. It’s not that I’m afraid of getting hassled at the border – that seems unlikely.
It’s that since I found out about this whole thing in late 2011, because of the immense problems that today’s US has caused me and my family, and its meanspirited, desperate attitude towards citizenship and taxation, the US just feels creepy, so I just prefer to avoid the place. It just seems like a different country than it was. I’ll probably mellow out and get over this (I sure hope so!) and I’m certainly not saying that all Americans are meanspirited. But it’ll take a while to get over it, and until then I’ll vacation elsewhere.
Re passports. I never had a US passport. Prior to 2009, although born in the US and always answering truthfully when asked “Where were you born?, I always entered the US on my Canadian id (when asked to show id — years ago they didn’t always ask car passengers) and I never had a problem or even thought I might have a problem.
At any rate, I haven’t been to the US since 2009 – we were planning a weekend trip in late 2011, but shortly before that planned trip I read an article in the newspaper and realised I had to straighten out my citizenship, which I now have. But I’ve really lost my desire to visit the US.
It’s like I’m not boycotting for the sake of boycotting — although I say that’d serve ’em right! — it’s they’ve just made it feel like an unpleasant country that I have no desire to go to. The end result is the same for the US economy, and unfortunately for the merchants and economies of the US border towns.
When a website for retired US Federal Employees writes IMHO fairly objectively about taxation for Americans abroad and expatriation it may be an indication that the cat is finally starting to come out of the bag:
FedSmith.com: “Taxes and American Citizenship”
http://www.fedsmith.com/2013/01/02/taxes-and-american-citizenship/
From the article:
“This provision [exit tax] is sometimes referred to as “America’s Berlin wall” as it is obviously intended to keep wealthy Americans from exiting the country.”
“A similar system was apparently used by Germany in the 1930′s when it implemented a ‘departure tax’ to discourage Jews who wanted to leave to escape the clutches of the Nazi government that was rapidly exerting its control over the country at that time. Perhaps it is ironic that the exit tax was part of the Heroes Earnings Assistance and Relief Tax Act of 2008.”
“The number of Americans leaving is predicted to grow larger when the final figures are calculated for 2012.”
“There is also a long waiting list in some U.S. embassies of Americans who are waiting for an appointment to renounce their citizenship.”
“Many Americans living abroad were not aware of filing requirements for U.S. tax purposes. And, with the new IRS reporting requirements, living abroad as an American is now more difficult as many institutions do not want to take American accounts as complying with the American reporting requirements are too expensive and too difficult.”
“Last year, for the first time, Canada held a ceremony for Americans giving up their citizenship and becoming Canadiens.”
The article is worth the read and perhaps also worthy of some comments.
*I wonder if I should resubmit the comments I submitted to Camp’s Hearing Committee in May 2011. What do you think? The commitee made them available on the internet at that time.
@Roger,
Your comments are always most welcome.
Just to straighten things out in the FedSmith.com artcle, the Reichsfluchtsteuer (Reich Exit Tax) was implemented in 1931 by President Hindenburg during the final days of the Weimar Republic (before Hitler even became Chancellor) as a capital control mechanism aimed at stemming the outflow of money during the worldwide Great Depression. The law was actually only repealed in 1953 by the Bundestag as the allied-administered occupation zones already had in place other more effective capital control mechanisms in post-war Germany.
During the early years of Hitler’s government, Germany actually had a policy of encouraging Jews to expatriate, although this was not cheap (see Haavara Agreement) and the Reichsfluchtsteuer was seen as a very useful way of collecting revenues when many were being forced to leave. It was still possible for Jews to leave Germany during the early war years, until Himmler passed a decree forbiding it in late 1941.
@CH Forever,
Thank you for the detailed historical clarification/explanation. In any case, the Reich Exit Tax was a revenue grab from those who were on the way out the door which was also in the process of closing and ultimately did close (in a most ugly way).
And it all began in a industrialized democratic nation that was in serious financial trouble. Are there any parallels starting to unfold here?
I have not visited the US for many years. We were just starting to discuss a trip to a US destination when we discovered that my birth in the US to Canadian parents came with a huge hidden price tag. Have scratched off any US destination from my travel wish list. Even when I get free from this mess, I can’t imagine at this point ever wanting to visit that country again. Too bad they won’t notice the loss of my business.
@Roger Conklin
It would be interesting to run into one of these Florida realtors and see how much they know about the substantial presence test.
I’ve been to south Florida many times and there was a notable change in the attitude of the black people we came across, a detectable spring in their step. Have you found this to be the case too? I’ve found most Americans to be very friendly, but I have a growing concern about being exposed to gun violence there. Now the NRA would like my elementary school Catholic nun to pack heat. Tell me, if we are to go on the premise, as the NRA suggests, that violent video games have been a major contributor to the motivation behind these massacres, wouldn’t increasing the competition level by having armed teachers and security people at schools and such, serve as more of an attractor to these ‘gamers’?
@FromTheWilderness, Now you scared me. Germany really was a democratic country before the 1930s, with a large population and a very developed economy. The combination of a deep financial crisis, perceived threats by enemies and grossly exaggerated nationalism led to capital control of those wishing to leave, a large increase of military power, a gradual erosion of personal freedom, and ultimately the catastrophe of which we know. Except for the last part, all of these points have already happened in the US in recent years. I still cannot believe that the last part could happen in the US, but this is really scary.
@FromTheWilderness
One could draw many historical parallels here, however the logic of the American political system and culture will dictate how events uniquely unfold. In my view:
1) The US dollar will continue to debase as long as American legislators only understand the language of votes and donations; the fact that never in history has a great power been able to effectively address fiscal woes in another manner is not comforting. This is why I keep the bulk of my assets where I live, in Switzerland (although no currency is safe when the major ones debase, the CHF will probably be the least worst option given the very responsible way the Swiss run their affairs; just to give you an example, a CHF-denominated interest-free checking account at a local Swiss Cantonal Bank would have given you a higher USD-return on investment during the past decade than America’s “top performing” actively managed funds or even the Swiss Market Index when priced in CHF; in light of FATCA, why the need for investment accounts when the local Swiss Milk Maid with her simple checking account is beating hands down the world’s best investing gurus).
2) A debasing currency has always been prejudicial (at least mid to long-term) to a nation’s economic well being. An economically modest America will be one less prone to engage in unilateralism and less able to command global clout and influence when wanting to enforce its laws extraterritorially. Think of America’s fiscal woes as a constructive evolutionary step to creating a new 21st century global Westphalian-like model of international economic and political affairs quite similar to the multipolarism and balance of power that characterized post-1648 Europe.
3) The US tax code has been developed unrepresentatively and at it may very well only end up being reformed in the same fashion. The US may soon exhibit a key charateristic of early-stage emerging markets = Reliance on exports to fuel economic welfare due to low domestic consumerism. This may very well force the country to align its tax code with international norms so as to compete for economic survival, despite what many uninformed homelanders and legislators may want.
4) Expect America to be very protectionist in the coming decades; “American Exceptionalism” may well be a continuing driving force in justifying this. A US passport, viewed by many today as a toxic liability when living abroad, may be very valuable in the not-so-far off future by foreign companies wanting access to the world’s newest emerging market in North America (think about the need to secure agricultural commodities and other precious natural resources).
In essence, the best long-term strategy may very well be to “ignore the crowd” when it comes to Expats’ desires to renounce US citizenship. Sure it may relieve us of immediate IRS unpleasantries, but the way the US tax code is structured is rotten and unworkable. Rotten and unworkable systems eventually wither away, like the Reichsfluchtsteuer.
please lift Shadow Raider’s comment to a new thread?
January 2, 2013 at 7:54 pm
This is the first item with potential for real implementation.