This post appeared on the RenounceUScitizenship blog.
Why I'm Giving Up My Passport http://t.co/c6EdyxZR3T – AKA why it's impossible for #Americansabroad to live under U.S. laws @Jtepper2
— U.S. Citizen Abroad (@USCitizenAbroad) December 8, 2014
The above tweet references an op-ed that appeared in the December 7, New York Times. The “Op-Ed” was interesting, well written and didn’t add any new insights or information. I then researched who this person is. He is a highly accomplished author, fund manager in London. In fact I intend to read at least one of his books.
Q. Does the U.S. really want to lose citizens of this calibre?
A. They don’t care and they don’t care that they don’t care.
“Stupid is as stupid does.”
This sentiment is confirmed in:
Homelander explains why #Americansabroad are not real Americans http://t.co/IBwErsNu1k – I guess t follows that they should not pay taxes
— U.S. Citizen Abroad (@USCitizenAbroad) December 8, 2014
In the words of this Homelander:
I think the real question is what makes you an American. If you don’t live here and feel no responsibility for supporting the country, why would anyone care if you decide to renounce your citizenship? There are plenty of people in the world who WANT to be Americans. Many of them come here, contribute to the country and want to become citizens. Those are the real Americans, not the folks who inherited the moniker but seem to think they have no responsibility for the contributing anything to the country.
The “op-ed” by Mr. Tepper includes:
The I.R.S. doesn’t tax the first $97,600 of foreign earnings, and usually doesn’t double-tax the same income. So most expatriates owe no money to the I.R.S. each year — and yet many of us have to pay thousands of dollars to accountants because the rules are so hard to follow.
The extraterritorial reach of the income tax dates from the Civil War, when the government wanted to prevent Americans from fleeing to Britain to avoid taxes. This outdated and harmful relic has only gotten worse.
It’s one thing if a New Yorker creates a shell entity in the Cayman Islands to evade taxes. It’s another if an American who has spent most of his life overseas, as I have, creates a legitimate company. The I.R.S. doesn’t care about the distinction. Under a 1962 law, it treats the two companies I’ve started as “controlled foreign corporations,” subject to detailed regulatory requirements, though a majority of our employees and clients are foreigners.
Moreover, if you are an American, you can’t invest in foreign mutual funds without paying punitive tax rates. This is a blatantly protectionist measure for American funds, but it also makes saving for retirement very difficult.
Renunciations of citizenship have soared because of a 2010 law, the Foreign Tax Account Compliance Act, which requires foreign financial institutions to report assets held by American clients or face a 30 percent withholding tax. In response, many foreign banks will no longer take American clients and are terminating existing accounts. The Economist says this “heavy-handed, inequitable and hypocritical” law will cost American banks alone $800 million a year to implement. Moreover, the magazine reported, “seasoned tax dodgers are not so naïve as to hold money in their own names.”
Most of us who are overseas long term simply accept the status quo. Some may fear that renouncing their citizenship will put a bull’s-eye on their back with the I.R.S., even if they’ve complied with all laws. It does not help that members of Congress occasionally threaten to bar any Americans who renounce from ever visiting the United States again.
Like many Americans, I didn’t choose to grow up abroad. My father is from New York, and my mother, who died in 2012, was from North Carolina. They moved abroad for work in the 1970s, and ended up in a poor neighborhood in Madrid, where they ran drug rehabilitation centers. I went to an American school in Spain and recited the Pledge of Allegiance each morning. Except for two years in childhood, four years at college in North Carolina, and two years in New York, I’ve lived overseas all my life. At 38, I’ve voted in only one American election and I don’t have much connection to the United States. Almost all my friends are cultural mutts — people with hybrid backgrounds, for whom nationality isn’t the most important part of their identity. If America makes it so difficult to be American, I’ll happily just be British.
The challenges facing expat Americans abroad would disappear if the United States taxed and regulated only those who lived in America. Sadly, American politicians don’t care about Americans living abroad. It is easier to demonize us as tax dodgers than to fix irrational policies that no longer make sense in an interconnected world. The founders agreed on “no taxation without representation.” Why can’t Congress?
I tried to reply to the initial comment but haven’t been accepted Please seem to like his comment which is sad.
The comment is quite valuable. Although mean spirited and ignorant it does focus on the real question which is:
What is the meaning of citizenship and what is a citizen?
Many people object to FATCA and U.S. citizenship-based taxation because they don’t consider themselves to be U.S. citizens.
I put in an original comment and reply to the one up there. Not there. In my first comment I referenced dot isaacbrocksociety dot stopfatca and dot fatcalegalaction . Maybe that has something to do with my comment not showing.
The Homelander is simply thoughtless and hurtful. Thinks he is displaying some sort of loyalty and assumes anyone who doesn’t agree to be a tax slave doesn’t deserve to be called “American.”
There’s the practical aspect and then the philosophical one. I for one, would like to know just exactly how does one take the “American” out of someone who is such by birth, culture & environment? That remains, in spite of technically having citizenship or not.
It seems to homelanders like this, we are only valuable as taxpayers. The author’s contributions are completely irrelevant to insecure morons like him. Unfortunately, without any change in legislation that would prevent Americans of all kinds from wanting to renounce their US citizenships, we have to assume that the US has a similar mentality. The US doesn’t deserve to have smart people as its citizens. Renounce with the satisfaction of knowing that you aren’t a moron and are doing what any reasonable person would do under the circumstances!
@Tricia + person has no idea what US is subjecting US persons living elsewhere to, and has not got the idea that they get no services from the US.
The post by Mr. Tepper is excellent. He explains that a lot of people are “cultural mutts” with “hybrid backgrounds” in our interconnected global world. Many superficially white-bread Americans have multicultural backgrounds if you go back a few generations: Irish-French-Polish-German-Native American, for example. Therefore, the U.S. policies make no sense in today’s world. In a global business, business partners of OTHER nationalities cannot afford to have an American on board as a minority owner of only 10%, because that would make the ENTIRE business subject to IRS forms and penalties. How fair is THAT?
As for that lame comment by the Homelander, I’d like to say: There’s piles of people in the U.S. don’t contribute a single dollar to the IRS because they can’t (or won’t) work, or make “too little”. There are also all kinds of people running illegal businesses right there in the U.S. whether through mafias, gangs, or backyard stills, plus the U.S. has by far the largest (and costliest) prison population in the world. What are those HUGE numbers of homeland Americans contributing to America (or the planet, for that matter)?
Don’t criminalize and demonize U.S.-born folks who contribute to the countries where they live, are responsible toward the people they work with, and take care of the people they love. Being responsible to others is often the Number One reason Americans have to give up citizenship.
Jonathon Tepper, like Boris Johnson, are well worth reaching out to.
@JC
You are right and I was reacting in the same manner,
I have edited my comment.
Thank you for reminding me…….
I think they are only letting comments through that think expatriates are evil.
It would seem that way, Neill 🙁
@Neil The article is pro position of US person overseas, why wouldn’t they let comment through that support that position?
My last thought is that they only like real names. I don’t see any standards for commenting on there.
Here is my #3 which combines #1 and #2:
Taxation without representation, without services, with complex burdensome compliance, and with excessive potentially bankrupting compliance penalties IS tyranny.
Why has US citizenship become a burden and threat when it should be about liberty and an enabler to pursue one’s dreams? The US wants to tax the retirement, education, and disability tax deferred accounts in other countries, yet then provides no retirement, education, or disability benefit.
For Americans living overseas it is America that has become unAmerican and no longer a nation that stands for ‘liberty and justice for all,’ especially in regards to its treatment and punishment of US citizens living overseas as if they are property of the US.
In years gone by Americans thought that one of the weaknesses of communist governments were barriers to keep people in – as in the Berlin Wall. JFK famously said we don’t need a Berlin Wall to keep our people in. Regan told Mr. Gorbachev to tear the Berlin Wall Down. Since then America has increasingly built a financial Berlin Wall to try and keep its citizens in by punishing those who live and pay taxes outside the US.
Just picture this it used to be $0 to renounce US citizenship then $400, now $2,350 with wait list over six months in Toronto to do so. The new FATCA laws have their own additional penalties and consequences as in banks overseas dropping US citizen customers.
Speaking as someone who still says “Ya’ll” occassionally I will thank the commenter to not tell me what an American is. lol.
The allowed a comment with the name of “Query”. I posted something along the lines that a responsibility to being a real American is to support Americans living abroad instead of stabbing them in the back.
@Atticus, I noticed you spelled ‘cheque’ wrong twice in on comment recently too!
Happenings. There are 4 comments. These are “verified” commenters with a history of comments. The rest are held up for moderation. Under their guidelines they say that they will post comments under pseudonyms.
Please comment on the editorial on the NY Times itself. Most people there are haters, and do not understand the real concerns of expats. Expats should get on the NY Times board and comment.
@ JTepper
Some comments are being held up in moderation at the NY Times (see JC’s comments above). Hopefully they will start appearing soon. Great article BTW. Sadly, the homelanders who obviously don’t understand life beyond the borders seldom accept enlightenment from expats.
@JTepper. Thanks for submitting your piece! I am an online subscriber to the NYT. My comment is awaiting moderation. Hopefully posted soon.
Yes, the US really does want to lose JTepper2 as a citizen. FATCA, CBT, Financial Crimes Enforcement Network, PFIC, and all the rest are irrefutable proof. The dumb-ass homelander comments just reinforce it. Every country has it’s share of idiots but a lot of them in the US are running the government.
Too bad his Consulate appointment is January 2015 rather December 2014. Because of that it will add another tax year and he will be well into 2016 before his nightmare is finally over.
Anyone want to bet right now on whether or not he shows up on the name and shame list?
I would like to comment but it does not appear that they are allowing comments to the Op-Ed.
https://twitter.com/USCitizenAbroad/status/541932814217007104
“From the mouths of Homelanders: Why #Americansabroad should renounce U.S. citizenship http://isaacbrocksociety.ca/2014/12/07/does-the-u-s-really-want-to-lose-jtepper2-as-a-citizen-renunciation-of-u-s-citizenship-jan-2014/comment-page-1/#comment-4706078 … – Time is of the essence!”
_______________________________________________________________________________
What strikes me about the comments to Mr. Tepper’s renunciation of U.S. citizenship left at the NYT article is that:
1. Many of the comments strike me as people with a lot of potential brain power and the ability to understand this situation if they chose to do so; but
2. Collectively and substantively they are among the most ignorant, factually incorrect, irrelevant and vindictive comments I have seen for a long time.
Oh and I can’t resist noting this comment from someone who claims to be a U.S. tax professional.
What should be inferred is this:
Renounce U.S. Citizenship and be free! The sooner the better! I suspect that time may be running out on this opportunity.
@JTepper with respect to your comment:
Your article was very good and expresses the views of many who read this blog. But, part of the goal of this blog is to educate others. In order to achieve this goal, the focus on “comments” is more important than the focus on the/your article.
@JTepper, I think the majority of the “Homelanders” that have replied on the NYT article are vindictive jingoistic crap-flinging monkeys; they don’t want to understand nor are they the slightest bit inclined to hear other viewpoints when the least amount of brainpower expenditure can be resolved to the lowest common denominator of “Don’t like the rules…get out.” The sooner we get rid of the blue passport with the eagle on the front, the better – at least for those of us with the money to be able to do so…the rest will end up having to live enslaved to the IRS or live in hiding fearing any close proximity to the border.
@JTepper: Excellent article … and in the New York Times, no less! Well done! It is indeed a great pity to see so many of the usual “don’t let the door hit you …” comments. You have stated our case so very well!
@USCitizenAbroad: You might want to edit your headline so the date reads “January 2015”. When I first saw the posting I thought it was about something almost a year old.