New York-born London mayor Boris Johnson refuses to pay US tax bill http://t.co/MaKDcZnTnM via @guardian U.S. London Emb won't pay con "tax"
— U.S. Citizen Abroad (@USCitizenAbroad) November 20, 2014
Read the complete article here.
It includes:
Boris Johnson has revealed that he is refusing to pay a tax demand issued to him by US authorities – despite previously lambasting the US embassy in London over its failure to pay the congestion charge.
The mayor of London, who was born in New York and holds a US passport as well as a British one, visited the country last week to promote his book and said during an interview with NPR (National Public Radio) that he had been hit with a demand for capital gains tax.
He said the US demand related to his first home in the UK, which was not subject to capital gains tax in England.
And for the absolute and total U.S. hypocrisy:
Johnson has continually pressed the US embassy to pay unpaid fines it has incurred for the congestion charge. The embassy has refused to do so, claiming the charge is a tax and therefore its diplomats are immune. During a visit to the UK by Barack Obama in 2011, Johnson reportedly asked him for a £5m cheque for unpaid congestion charges but the US ambassador intervened before the president could answer. By last year the amount the US embassy owed in congestion charge fines had risen to more than £7m, the most of any diplomatic mission in the capital.
I guess I’d say that one person’s definition of what their moral obligations are will not be (always) that of another person.
What is Stephen Harper’s moral obligation — or even my MP’s?
@Bubblebustin
I think it is still up in the air whether Boris was actually contacted by the IRS re his unpaid taxes. His statement “They’re trying to hit me with some bill, can you believe it?” could be the imprecise wording of a person caught off guard and who doesn’t have a rehearsed response.
Unfortunately we’ll probably never really know as he has apparently gone silent on the issue, and I suspect he’ll stay that way.
@tdott
I believe that to be the case too. I just wanted to point out the absurdity of Boris telling the IRS to shove their assessment while he’s talking on public radio – IN AMERICA!
Morality? It’s every man for himself!
@Calgary re: “I guess I’d say that one person’s definition of what their moral obligations are will not be (always) that of another person. ”
I am talking about the Mayor of London, versus average Jane, not just the differing opinion of two regular, non-descript people.
Boris is a politician. He is a leader. He is a public figure. Few of us are in his position, and he has (whether he likes it or not, and certainly he is FREE to ignore it ) certain moral obligations that come with that role.
Its not a lot different than saying that a health professional has certain moral/ethical obligations to place the PATIENT above themselves. Having been a registered health professional myself at one time, I well remember the ethics courses and having it drilled into my head that patient comes first, even if it means I might lose my job over it (been there, done that).
@Calgary, I think we both agree that Harper is NOT following his moral obligations as leader of our country.
WhiteKat,
I get what you’re saying but I think that perhaps the moral obligations (written out in a document or even perceived) of an elected official of one political party might differ from the moral obligations of another political party. I’m not aware of them signing anything that would include our issue in their own / their party’s definition of a moral obligation or policy / platform.
What are the certain moral obligations that come with the role of anyone in public office and remain constant no matter which party’s candidate won the election for whatever public office? I don’t know. I think those moral obligations might differ one person / one party to another.
WhiteKat,
Just because you and I agree that our Prime Minister is NOT following his moral obligations as Leader of our country, does not mean that others persons agree with us. There must be many that believe Mr. Harper is following his moral obligations to serve as Leader of our country. He keeps getting re-elected.
I don’t know that this BoJo article has been posted yet. Don’t read the comments though, they’ll just make you mad and they’re closed 🙁
http://www.dailymail.co.uk/news/article-2843696/Why-I-pay-US-tax-says-Boris.html
@Bubblebustin – yet still may upvote or downvote comments.
Comments still open here:
Boris’s dilemma: relinquish his US passport or pay American tax
http://blogs.spectator.co.uk/coffeehouse/2014/11/boriss-taxing-dilemma-relinquish-his-us-passport-or-pay-american-tax/
Re: double taxation. I’m certainly not an expert but for example it used to be that if you got disability insurance and claimed your monthly fees as a deduction but ended up disabled and receiving payments; those payments would then be taxable. If you didn’t claim the deduction the payments would be tax free??? Isn’t that similar…
From the UK 2011 Census
Born in the USA 177,185
Of those…
UK Passport 57,417
US Passport 106,364
No Passport 3,003
Other Passport 10,401
Born in UK but Carry US Passport 7,312
Born in neither UK or US but carry US Passport in UK 12,654
Number US Persons in UK 177,185 plus 7,312 plus 12,654
According to IRS number of tax returns filed from UK 31,599
This could mean;
a.) US Persons in UK all have large families with six plus persons as dependents on each return
b.) US Persons in UK have said BUGGER OFF.
It is possible that those in the UK will back Boris – because of disdain for the US, as well as seeing the absurdity of taxing someone in the UK based on having lived in the US till the age of 5.
And as UK trusts get a load of the amount that FATCA certification is eating into their entirely UK based assets – EVEN WHEN NO POSSIBLE US connection exists – then I think they’ll cheer anyone who tells the IRS and Treasury to take a hike; ex. “… New US tax measures, aimed at helping American authorities collect tax from their overseas citizens, are leaving innocent Britons out of pocket….. Although it was established for wholly innocent reasons, this trust along with an estimated 100,000 others now falls within the far-reaching scope of FATCA.
Once the review is undertaken, if the accountant is satisfied the trust does not need to fulfil any further obligations under FATCA, there are no further costs – and no information will be passed on to HMRC or the American authorities. “This whole process seems extraordinary,” said Mr Stewart. “The trust just has a property inside that is not providing any income so I don’t understand why it needs to be reviewed, simply to satisfy regulation introduced by another country.” …….accountancy firms are also carrying out reviews and are charging for their services, with “initial review” fees ranging from £200 to £500….for those people who have set up trusts. They will be contacted irrespective of whether there is any suggestion of a US connection and, as with the Stewart family, they may have to pay their accountant to undertake a review. About 100,000 trusts could be affected including those set up to look after children’s assets or reduce inheritance tax.
The purpose of FATCA is to put the onus on the world’s big finance firms to check whether any of their customers are dodging tax owed in the US. If firms don’t oblige, their US operations will be hit with a 30pc tax. The UK divisions of firms have hastily complied – at customers’ expense. ” http://www.telegraph.co.uk/finance/personalfinance/tax/11050777/British-families-billed-500-to-prevent-Americans-dodging-tax.html
Who says that “only” US citizens and USdeemedtaxablepersons are affected by FATCA? Clearly these legal, local UK trusts with ZERO US connections are paying hefty fees to satisfy the US – and there is absolutely no reason why they should be.
@Cheryl & Duke of Devon
Cheryl, want to make sure I am understanding you correctly.Does this example fit what you are saying? If not, can you add what is needed to see?
*You are working for an employer.
*An amount is deducted from your gross pay in order to purchase disability insurance.
You are not taxed on the amount that is deducted. The govt does’t get its chunk. From a tax point of view, this is a form of tax deferral. You are receiving employment income used to buy something and you are not paying tax until you draw on the amount, (similar to how an RRSP works).
When you receive payments, they are counted as other income and then are taxed. Why should you receive income that you have not been taxed on? I don’t understand how this is double taxation.
Duke, I know I left out the 1116. I hadn’t seen any indication of what he might have in terms of the unearned income. Plus the whole business of FTC is so complicated I just didn’t want to go there. What I wanted to do was float numbers, rather than just the idea, that Boris was going to pay. Go for the shock value. I don’t think Homelanders and others unsympathetic to our situation have any idea at all, of how much this could be. They just think “Rich guy.Tax cheat.” Given his delinquency and likely investments, I figure he is still going to owe outside FEIE. & FTC. I did try to indicate it was a very rough idea. I should have pointed out purposely leaving out FTC. This was wrong. Apologies.
I am still having trouble following the logic concerning the double taxation. Please read and show me what I what I am missing. I am not trying to be difficult. I simply don’t understand what you mean.
I am buying a house in Canada. I pay tax on earned and unearned income.
(I don’t live in the US & not being able to deduct the interest has no effect on my tax situation)
I likely don’t owe tax due to FEIE/FTC. Even if I am wealthy and pay, this is on income I have at this point in time. I may be using some of it to buy the house/pay the loan but it is taxed once; i.e., now.
.
I sell my house for 500,000. I paid 100,000. My gain is 400,000. The US deducts the $250k exemption from the gain (has not been taxed yet) which leaves $150k. No capital gains tax paid in Canada. The 150K is not money I have received prior to the sale.It is over and above what I paid in the first place Where is the double taxation?
I presume whatever you are seeing that I do not is similar to this? I pay income tax on money I use to buy things for which I also pay sales tax. There are little overlaps depending upon the situation.
Canada ,UK, and USA all want to give a tax break to first time home buyers.
Canada and UK decided to do it by not taxing capital gain on principle residence. There are limits designed to frustrate flippers.
The US does it by making mortgage interest deductible against income (up to a point). There are serious arguments against both systems ( see mortgage interest deduction on Wikipedia.
Call it what you like. If not double taxation how about unwarranted taxation or whatever.
I hope he doesn’t pay . It’s the best publicity we’ve had so far.
@ Calgary re: “What are the certain moral obligations that come with the role of anyone in public office and remain constant no matter which party’s candidate won the election for whatever public office? I don’t know. I think those moral obligations might differ one person / one party to another. ”
From my way of looking at a ‘moral obligation’, it is expressed more in terms of generalities than in certainties, thus giving rise to ‘ethical dilemmas’ – what SHOULD I do in this particular, unique situation?
Regardless, my point continues to be that certain people, based on their vocations usually, have moral obligations that arise directly because of their role in society, and the incumbent potential to harm or help other people while in these roles.
Quite surreal to talk about certain innate moral obligations or ethical dilemmas of elected officials anywhere while I watch Ferguson, Missouri! None of that seems to matter there or in statements from the White House. No moral obligations going on there.
I’m too old and cynical so I could go on quite a rant on the lack of moral obligations I’ve seen in my lifetime, but that’s not for here, and I cannot judge what Boris Johnson’s moral obligations are or are not or should be.
I hate to sound so cynical, but it’s every man for himself, and if you happen to attach some morality to someone’s decision and their’s happens to be the same as your’s then that’s great. If not, then tough luck.
@Duke
I see. Thanks for explaining.
I agree. I hope he remains defiant. His case could change a lot of minds.
@Bubblebustin,
Are you the female version of USxCanada?
Actually, maybe USxCanada is a woman – not sure why I presumed a ‘he’.
@tricia, you said
“I am still having trouble following the logic concerning the double taxation. Please read and show me what I what I am missing. I am not trying to be difficult. I simply don’t understand what you mean.
I am buying a house in Canada. I pay tax on earned and unearned income.
(I don’t live in the US & not being able to deduct the interest has no effect on my tax situation)
I likely don’t owe tax due to FEIE/FTC. Even if I am wealthy and pay, this is on income I have at this point in time. I may be using some of it to buy the house/pay the loan but it is taxed once; i.e., now.”
Tricia: About double taxation on your house in Canada, because taxes are higher in Canada I cannot get credit for mortgage interest from USA. I cannot deduct mortgage interest because there is nothing to deduct from since owed zero taxes to that stale doughnut down south. Meanwhile Uncle Sam demands 20% of the profits from my sale of my place whenever I do sell it.
@Kermit
Thanks! I think I get what you mean. Canadian taxes are high so no deduction.(This does not amount to any sort of taxation on your house- nor does it matter at all that US residents get to deduct mortgage interest.). But you get a big deduction later in not being taxed at all on the capital gains from sale of your principal residence.
The US is opposite. The only time we are affected is on the portion of gain they think we should pay. It sucks but again, it is not direct double taxation.
Ginny Hillis’ letter to Boris Johnson gets published in Forbes:
London’s Boris Johnson Gets Help In IRS Fight
http://www.forbes.com/sites/robertwood/2014/11/25/londons-boris-johnson-gets-help-in-irs-fight/?utm_medium=twitter&utm_source=twitterfeed
A number of independent tweets to the mayor of the above Forbes article.
Ginny’s letter to BoJo is awesome! Kudos to the Woodie for publishing it.
The ball is now in BoJo’s court. Will he have his Churchill moment and join the fight against Nazi (I meant US) tyranny?