She also attacks Gerard Depardieu. I was trying post a comment asking whether she still pays taxes to the US and it was too bad her hubby didn’t have to go to Vietnam(he was a draft dodger). I find Francis rather hypocritical as she had no problem in the 1960s and 1970s with her own husband trying to avoid compulsary military service but bitterly complains about Global “Citizens” trying to avoid their national “obligations”.
*My 2 cent response:
Again the article focuses on rich people who shop around for alternative nationalities in order to avoid taxes, and does not address the cases of many of us who moved abroad and became citizens in another country for other reasons.
It is important to distinguish between tax evaders like Depardieu, Eduardo Saverin, and John Templeton, who expatriate themselves in order to evade tax on earnings in the country of their nationality and residence, and individuals (“US persons”) living outside the US, who have paid tax on their income in their country of residence, who are cynically targetted in order to extort penalties for phoney baloney crimes.
I would put Eduardo Saverin in a different basket. While his case is more borderline, he lived in Singapore for multiple years, with FBAR and banks preparing to FATCA preventing him for doing business as he wished.
Depardieu, on the other hand moved out to protest the 75% tax rate that was supposed to go in effect. At that rate, you really have to wonder how many, who make much less, but still above the 1 million euro threshold are going to do the same. This is not taxation anymore, this is confiscation and stupid policy that is going to backfire.
This article only looks at one side. Most, if not all of us in Canada that have decided to relinguish/renouncehas nothing to do with tax and everything to due with the cost and life credit units of maintaining compliance.
*I am not sure all understand that the Diane Francis is herself born in the US along with her husband who skipped out on compulsary military service during Vietnam. This is what makes her a complete hypocrit.
I agree. She is mixing us ordinary apples in with the “exceptional” oranges.
The msm propping of US extraterritorial grabs into other countries is really pretty stunning. Do only idiots write for newspapers? Or just hypocrites with personal agendas?
*”This means there is a global disconnect between nation-states and their charges, hardly surprising considering that most governments are incompetent, abusive or irrational entities based on concocted borders.”
Somehow, I don’t think she meant to inlcude the US in this description, which is a pity because it sums the government up quite nicely to me.
And can someone please explain to me the difference between tax avoidance and tax evasion? If you’re avoiding paying tax you’re a tax evader to me. I know it’s probably to do with the various tax allowances, etc, but I don’t really see how they can be two different things.
*Medea, here’s the wiki view on the difference: http://en.wikipedia.org/wiki/Tax_noncompliance#Difference_between_avoidance_and_evasion
@SwissPinoy. Yes, that’s more or less what I thought, the legal loopholes that can be used make it legal tax avoidance. If governments simply made a straightforward law that said everyone, personal or business, pays XX in tax with no exceptions it would probably go a long way to solving many countries money problems.
Tax avoidance is what you pay an accountant $300/hr to figure out.
I couldn’t really tell from the article that the author is FOR citizenship-based taxation, explicitly. I see she is a die-hard conformist that hates it when something, or someone, like Depardiu comes along to challenge their beleifs.
This is still extemely murky water @Tim. In a country like Brazil, the tax rates are extemely oppressive. But I know a handful of people with assets that I hope to one day accumulate. I’ve shaken hands with a few billionaires. Taxes here are killer, but they must be have found a way to pay the lowest amount possible.
This really makes me believe that what Depardiu did was political, but more power to him and I congratualte him. After all, who is creating the jobs?
@All
Regarding the difference between avoidance and evasion. One is legal and one is illegal and then there are the grey areas!
Jack Townsend talks a bit about the grey areas that our Tax Complexity assures abuse and better treatment for the BIG Boys!
The Big Boys Get Better Treatment in Our Tax System Than Do Minnows
Grey areas aka “aggressive” tax avoidance.
Grey areas aka Romney tax avoidance. Taking advantage aggressively of every legal loop hole, brought to you by your favorite Congressman. The tax code doesn’t exist to raise revenue for government operations, it exists to assure the re-election of incumbents by raising campaign contributions in exchange for special consideration in the code.
Grasshopper, today’s riddle is this: how does one defend the indefensible?
@ a
Well said. I am constantly stunned reading blatant hypocrisy and gross ignorance of otherwise intelligent journalists. Normally these people have years of experience checking facts and writing thoughtful articles about other subjects, whose conclusions, even if wrong, seem to at least be level-headed and well reasoned. But as soon as subjects like citizenship and extraterritorial taxation come up, they leave their brains at the door. They distort or misstate facts, use wrong argumentation, and their conclusions are muddled to the point where you ask yourself if they even thought out anything on their own for more than 5 seconds.
Could this be evidence that professional journalists as a group have become incapable of independent analysis and are now just entertainers pandering to the crowds? What does this say about society?
MSM judgement of expats and extraterritorial taxation is little better than the trial scene from the movie Idiocracy.
“Justice was not only blind, but rather retarded as well.”
It is indefensible for the Canadian government to throw Canadian citizens to the wolves of the US government (i.e. those dual Canadian/US citizens). Canadian citizenship, if it means anything, must require via law (statute and common law) and treaty, the Canadian government to treat all Canadian citizens equally. FATCA and the US government action to enforce it results in certain Canadians (i.e. dual US) being denied liberty, property and freedom when they have followed and complied with all Canadian law. I would implore Isaacc Brock to bring this to the attention of the Canadian people and government and to just say NO to FATCA.
@Just Me, good point. Grey areas are often loopholes that hasn’t been closed by statute yet. We had this thing with flow-through shares in Canada where a person could buy them and claim the loss and give them to charity and claim the tax deduction. I think it turned into a net benefit to the shareholder just through the taxes saved. This was a loophole and it was closed last year by the Harper government. Pity. I was thinking about using it.
Now, if tax evasion is a crime, then Templeton, Saverin and Depardieu are not tax evaders on the face of it. That could be a libelous claim and one should have proof before suggesting that someone has committed a crime. We actually want to avoid libel on this blog, so I wonder if it is possible to prove that these men are actually tax evaders–instead of people who chose to expatriate to avoid taxes. Nothing I’ve seen suggests that they have evaded taxes at all. Perhaps Arrow would know whether claiming that public figure is a tax evader could be libel.
Part of thing is that I’ve been accused of being a tax cheat on more than one occasion. One person who called me that was a regressive “progressive” or perhaps an illiberal “liberal”. I am thus a little sensitive when people call me a tax cheat, though I’ve never brought a lawsuit against anyone. Most of the time it is probably just a cheap shot that doesn’t damage a person’s reputation–well, in the case of Depardieu and Saverin, nothing more damaging than anything else that is being said about them, like “pathetic” and “despicable”.
@Petros
I hear you and I think you are right. Just like the outrage on Romneys ‘effective tax rate’, I avoided ever calling him an evader. IMHO, he was just very good at using every legal tax allowance or strategy, designed by his tax lawyers and CPAs, to arrange his affairs to assure he paid the lowest rate possible. Without evidence of actual ‘illegal’ Tax evasion, you have to be very careful to avoid that charge. However, I would not be surprised that he got into the grey areas, which arguably are legal until ruled they are not.
I would think, most Americans get the notion of evasion and avoidance muddled in their mind with they grapple with the unfairness they perceive in how we are taxed. What they do know, is that the Tax Code complexity makes it easier for the BIG Boys to somehow pay less taxes than they do, or at least they think that is the case. That doesn’t seem fair, somehow even knowing how subjective the term “fair” is.
When the “fair” discussions start, I often argue that most US middle class folks don’t realize how low their effective tax rates are, (on a world scale is that fair?) as they either don’t figure it correctly, or they don’t really understand the concept. IMHO, is should NOT be figured against an AGI. It must be figured against a Gross Gross income to include (add back in) all exclusions like deferred income, non taxable interest, losses allowed against gains or 401 Ks exclusions and all items 23-37 on the 1040. My point is, Americans don’t really realize how much money they make on a Gross level, and how that gross is taxed differently in countries like NZ/AU then it is in America.
Anyway, I see that PBS’s “Need to Know” ran a program Friday night called.The Tale of Four Tax Returns ‘Trying to comprehend the incomprehensible.’ This was homeland story focused on US tax returns in Jersey. Think how complex it could have been if they included a comparison with American’s abroad. It would have been beyond understanding! LOL
As a side note, I have a contrarian view of the article Tim posted.
I of course disdain the “fix” the this lady believes in. At least she put her view clearly on her sleeve, and not hidden in some nuance like “experts believe” crap I often see.
However, I think more stories like this, actually serve the cause of awakening folks to the arguments that heretofore have been submerged and don’t make into the public discourse. It opens opportunities for argument and discussion, and that has a lot of value. I moves the topic out of specialized advocacy blogs like this, unto the public square. It makes us hone our arguments, and forces us into the debate to counter the CW narratives that are out there. The more of this, the better! Because ultimately, you have to win the argument with a broader audience, and without these opportunities, it is hard to stand on the street corner with a bullhorn and get attention to your message that the “World is coming to an End”.
Also, I can not fault the final statement, which I think is correct:
As I see it, we have two mega trends occurring simultaneously. One is the movement (migration) of people (for whatever reason, legal or illegal) that many in the US are frantic to stop. The other is the continuing technological advances in BIG DATA and inter connectedness that leads down the path to the total surveillance state. The FATCA gotcha GATCA (say that 10 times fast) goals are part of this phenomena.
And frankly both are forces of nature like the tides, and very hard to stop or resist. However, IMO they are in conflict, and like a storm at sea, with conflicting currents, when they collide, they make for a very turbulent sailing. In the real world of offshore passages, I have been in that wash machine chaotic sea, and it is NOT comfortable. Neither will be the the clash of these trends.
*When I was offered a job many years back that would require me to move from the US to Peru, I was interested because of the job, not because it might be an opportunity to escape US taxes. But before I accepted it I had enough sense to not simply compare my compensation in Peru with that in the US, but to also find out what my situation would be with respect to both Peruvian and US income taxes. So I accepted that job with my tax eyes wide open. I knew I would have to file tax returns and pay taxes to two countries simultaneously under very different tax systems. Because Peruvian taxes back then were substantially higher than US taxes, my foreign tax credits totally offset my US tax obligation. But I knew from day one that I would have to file tax returns with both countries.
I can assure you that evading taxes was not anywhere on my list of objectives in accepting employment abroad and I doubt if it is for the majority of Americans who live and work abroad.
*I lost my job in the US during the dot.com crash. I sent my resume to many head hunters and over a hundred companies around the US, organized using a job-search web site that I had designed for myself, but most just sat on my resume, comparing it with the hundreds of others. Eventually, some did respond, but by then I was already working for my new employer in Switzerland who doubled the pay. I’ve been working in Switzerland since, get 5-6 weeks of vacation per year, instead of 2 in the US, would have to give a 6 months’ resignation notice, instead of the 2 week notice in the US, and renounced US citizenship while being unable to picture myself working again in the US.
Thus, it would be heavily insulting to suggest tax evasion in my situation.
@Roger, and @Swisspinoy, so many of the commenters never ever address the issue of being BORN in Canada, or another country, yet being forcibly defined by the US as a US taxable person through inheritance via a parent. Or being an accidental, who just happened to be born in the US, and left as an infant or child.
Hard to accuse those categories of babies and children of relocating, and living abroad for evading US ‘tax’ purposes, but the US never wants to address any of that – because it exposes FATCA and US-extraterritorial taxation as the lies and unjust arrogance that they are.
And that goes for the comments and tact that the Democrats Abroad FBAR/FATCA Task Force takes in the recent memo to members, http://isaacbrocksociety.ca/2013/01/15/demsabroad-is-out-with-a-memo-on-fatca/ – with their repugnant advice in closing: “……that IRS compliance will likely involve a financial cost associated with the privilege of living abroad”, which presupposes that US taxable persons in Canada ever even lived in the US, or were born there. If you were born or grew up outside the US, then only US residents think you’re ‘living abroad’. I think that DA taskforce must be made up of myopic people who are not in the categories of ‘accidentals’ or those born dual, though they might have children that are. Someone really needs to confront them – and ask them if they say that lame stuff to their own children who never lived in the US at all – and don’t feel any qualms about using that ridiculous rationale. How do they justify to their own children, face to face, why they can’t help them pay for university with a RESP, or save with a TFSA – just based on an inherited and now punitive status?
It is evident in all the IRS and US propaganda, that they deliberately do not want to talk about those born dual abroad or as accidentals – or those who were stripped of the US status after taking on another citizenship, as per the US law of the time – because it makes US claims even more obviously and ridiculously unjust and arrogant. They just keep repeating that this is about tax evaders – because they know how effective that is. Look at how the media just repeats it too.
And it was disheartening to see panelist Robert Goulder ? (Tax Analysts) http://isaacbrocksociety.ca/2013/01/18/big-tax-law-conference-later-today-will-discuss-fatca/ – justify FATCA on those same deeply flawed grounds – that tax evasion necessarily followed in it’s absence – which he said with such adamant and almost religious fervor in his tone – not as a thoughtful and critical analyst, but as a kneejerk homelander. Always the US navel gazing – and never acknowledging that we already pay very real, and high taxes to the our home country which actually gives us services and rights where we live and may also have citizenship. As if the only tax that counts is the US one – layered on top of what we’ve already remitted.
Funny how these guys are supposed to be such talented thinkers, but they’re ready to swallow the IRS and Treasury line without any critical analysis – as if it is likely that every one of the 6-7 million people deemed by the US to be ‘taxpayers’ up and left the States en masse for the sole purposes of not paying US taxes. As if Americans never have children, or marry anyone and live lives anywhere else. Funny that they think we were born with a copy of the Internal Revenue Manual in our hands, but they don’t even know anything about their own citizenship laws, or about the actual filings required under FBAR and FATCA. And, you could see that if they were talking about corporations, oh, they could all consider different theoretical scenarios, but if they were talking about ordinary individuals, any objectivity or ability to think went right out the window. Also really glaring for me, when I see these academics, or the US government and IRS lawyers making pronouncements about our tax duty to the US, is that they represent an elite – with expensive US university degrees, and well paying jobs, but for us minding our own business, living ordinary lives, at all different income levels, all we have to do to fall afoul of the BSA FBAR, it only takes a sum total of $10,000. in savings. What is that sum in terms of what they are used to having on hand?
Went abroad to evade taxes? No, I’m just another accidental emigrant. I went abroad in the early 1990s primarily for the chance to improve my US career prospects and secondarily for a sense of adventure. I hired on as a local employee with no thought given to the US tax implications. Fortunately, a US CPA in the company filled me in about the time that the first year’s returns were due and I hurriedly contacted the IRS office in Paris to send me the Federal forms (pre-internet days). After the first or second year, I began using a CPA in the US to file my tax return and FBAR (which didn’t have a name and the CPA called something like “Detroit Treasury form for your foreign bank account”). I continue to use this CPA for my US taxes due to their complexity but prepare my own local taxes even though the forms and instructions are not in my first language.
I began to read the IBS website about six months ago after being informed that the area bank, where I had had an account for many years, wanted to terminate my account simply because I was an American. I was enraged to be discriminated against based on my citizenship and have been complaining since then.
Did I go abroad to evade taxes? No. I went abroad to improve my job prospects in the US but did not return. I’m just an accidental emigrant, of which there are scores and scores.