The Committee for a Responsible Federal Budget (CRFB) is currently having a nice little chat about how it can best use the Foreign Earned Income Exclusion to double-tax non-US economies.
The Foreign Earned Income Exclusion, it says, “is designed to prevent a US taxpayer who moves to a high-cost country from paying more taxes than a similarly situated taxpayer in the US, since the standard deductions are not adjusted for a higher cost country.” Oddly, it makes no mention of compensating individuals who pay more taxes in other countries so that everyone pays the same.
Since they allow comments and might publish mine, I contributed my 2 cents, for what it is worth:
In 2001, during the dot-com crisis, I couldn’t find work in the US and thus moved to Switzerland to work instead of collecting unemployment checks or food stamps. I did not move because of taxes or to pay less or more in taxes, but rather to earn money to pay debt interest, to buy food, to buy clothing and to buy shelter. I migrated to acquire the basic essentials required for survival.
11 years later, local banks warned me that they were rejecting Americans due to US policy, preventing me from refinancing my mortgage. In America, this is known as national origin discrimination and national discrimination is a US federal crime. Nevertheless, the VA and HUD stated that they do not assist Americans living outside of US jurisdiction who become victims of US federal crimes caused by US policy and American politicians showed no interest or concern in American issues beyond US borders.
Both of these mentioned issues are unknown to both sides of the argument and yet both are the core subject. Foreign policy like this should be created or heavily influenced by Americans living abroad who understand the issues. Stateside Americans will never understand the issue well enough to make fair judgments since they lack the foreign exposure. The great lack of expat influence on US foreign policy is the reason why the US continues writing foreign policy with damaging impacts.
The idea of opposing national origin discrimination is to prevent the creation of 2nd class citizens by treating everyone equally. When living in a country, one generally attempts to integrate to be one with country so that one will be treated equally as anyone else. With this policy, one is focusing on treating individuals unequally, discriminating against them in their jurisdiction due to their national origin. This creates a huge conflict for expats who want to be viewed and equally treated as locals. Unfortunately, I lack the words in explaining this conflict properly. The best way for a stateside American to understand this is to move outside of US jurisdiction so that they can then learn to understand the practice of national origin discrimination through its implementation by US policy. It is fun to say that everyone should be taxed equally, but impracticable on a global scale since no jurisdiction is equal to US standards.
The idea of migration is generally to work instead of relying on government aid. Dual citizenship, commonly misunderstood by the US government, simplifies this process by making it easier for individuals to work where their skills are needed. I saved the US government money by moving to a low tax jurisdiction which needed my skills that America didn’t want. Yet, the US government wrongly views this as being a “cost” since it doesn’t understand the core issues of migration and citizenship. This “cost” view of citizenship conflicts with the popular “good riddance” opposition against dual citizenship which commonly argues that expats are not worthy Americans. The services that Americans abroad provide to America are invaluable and generally not recognized by the homeland.
Living outside of America, I do what any migrant to America does or should do, and that is to integrate, being a part of the nation who’s services one uses and who’s protection one needs. Being a part of one’s habitat nation means opposing 2nd citizen status, which requires opposing national origin discrimination, just as such is opposed by US federal laws. Integrating and respecting US federal laws thus requires one to oppose discrimination caused by US policy and such opposition, under existing conditions, obligates one to renounce US citizenship since one cannot be a 2nd class citizen in violation of federal US laws prohibiting such. A local of a jurisdiction must treated the same as any other local of that jurisdiction, regardless of national origin/citizenship.
Thus, I am no longer an American citizen today because I obeyed and respected US laws while complying with the interests of US policy makers who do not understand the true consequences of US policy outside of US jurisdiction. Several days ago, my son, with his near 500 years of American heritage, was born without US citizenship due to this confliction of US policies.
Something like this should never happen. No real American patriot would allow this if they understood the situation. America must make every effort to support and assist its citizens living abroad, especially when renunciations are irrevocable, when they have no representation, when they are discriminated against by US policy, when they are not treated the same as any other American, when it seeks to double-tax their earnings, prevents them from migrating with exit taxes, burdens them with filing complications and even threatens them with banishing.
Let’s face it, folks. US policy makers are just not qualified to discuss US foreign policy. This whole discussion is a joke. My advice to US politicians is for them to become expats so that they will gain a better understanding of this topic. Until then, abolish foreign policy and focus on local matters.