I would suggest that we SWAT flood this CNN Article with comments about the various taxes USPs abroad face. Perhaps we can stress double taxation due to non FEIE on welfare, unemployment, disability, retirement benefits.
…some of the working poor face marginal tax rates “approaching 90% as they lose benefits attempting to better themselves.”
Readers were incredulous, asking how it could be that in a nation with a top federal income tax rate of 39.6% on individuals making more than $400,000 a year, anyone could face a 90% rate.
It is true. Marginal tax rates, especially for those below the top rate brackets, are chaotic, confusing, and all over the map.
As a result, some of the working poor face extremely high rates on their next dollar earned.
That CNN article is a good target for a SWAT drill. If people don’t have time to comment I hope they’ll at least “up arrow” comments like the one below made by NeoPrudentist (go to Discussion and sort by Newest). And then take a look for Brocker and Brocker-like comments to “up arrow” too. (Bold emphasis added by me.)
“The problem is ultimately that our tax system has become so ridiculously complicated that three groups of people don’t understand it anymore:
1) Congress: when they admit they aren’t reading the laws they’re voting on we have a major problem. They talk about how language gets “slipped in at the last minute” when really this means “I didn’t read it, but I signed it and no one told me it was in there!
2) Tax Preparers: I’m a licensed CPA in two states. I’ve taken several taxation courses from two professors who prepared tax returns professionally as their primary occupation. They told us “we use our program to prepare the returns, can research specific questions in tax law, but no one knows the law overall”.
3) The IRS: Both professors told stories from audits that show the guys running the IRS and the auditors don’t know tax law either. The tax preparers said half the time they are defending a client in an audit they are explaining tax law to the auditor. By the time the explanation’s over, the auditor packs their briefcase and closes the case.
So no one really knows what the impact of the current tax laws, much less what a new law is going to do to people in general. That’s why I love when people like Obama say “this will only impact those whose income is over $250k”. Then lo and behold, my taxes went up when I was making nowhere near that much.
The system has gotten so out of control that we have more tax laws (just tax laws) than other nations have laws in general. In other words, if you stack up all the tax law books against all the law books of another country, just our tax laws are longer. It’s time to start over with a simpler system, find one that works, then LEAVE IT ALONE so we don’t pile new laws on top of old and bring ourselves back to where we are.”
Should have mentioned that JDT has a comment up on the CNN article and I prepared one too but then decided I really don’t want to register with Disqus. If anyone wants to use it (all or part) it’s fine by me.
Many people don’t realize that the US tax code has 72,000 pages (over 4 million words). There is no one human being capable of mastering that amount of complexity. If American homelanders think they have it bad then they should be made aware that Americans living abroad face even more complexity than they do. The USA taxes according to a unique system called citizenship-based taxation. (The only other country in the world which taxes its diaspora is Eritrea and the USA hypocritically admonished this tiny African nation for doing this.) So Americans abroad file and pay taxes to the country in which they are living AND to the USA where they may not have ever lived or even visited (citizenship can be obtained via an American parent). Their Country X income which is earned, taxed and saved in Country X is essentially double-taxed because of US citizenship-based taxation. (IRS “exclusions” do not always zero out the US tax.) But it isn’t so much the tax money Americans living abroad send back to the motherland, it’s the cost of paying tax preparers, the potential for crippling penalties for any errors made and the time required to complete 1040s and a stack of additional “information forms” which makes inclusion in the US Tax and Form Club a real burden.
@ JDT
Thanks for posting that for me. Saw your name, “up arrowed” immediately, and then when I read the comment I realized I’d kind of upped myself. Oops! I like the idea of SWATing articles which leave a door open to insert something related to the overseas tax filer’s dilemma. Just Me is a master at doing this. If he had a nickel for every comment and tweet he has made, his OVDI payment would be covered by now … but then the IRS would probably tax away all those nickels. Which is best — larger, mostly disinterested, MSM outlet — or smaller, lesser read, outlet with some awareness of FATCA, etc.? Is a comment in the larger outlet one lonely voice in a crowd? Is a comment in smaller outlet one lonely voice in an empty room? I personally think, lonely voice or not, we have to keep trying in both venues. However I must say I don’t feel very comfortable in comment sections outside of Brock because I’m always afraid I’ll mess up and write something misleading, even though that isn’t my intention. I’ll keep trying though.
@Em, nothing wrong with giving yourself a thumbs up! I admit I do it all the time, but only because I actually like my comments better than most other people’s. 🙂