Prologue – November 2014:
Boris @MayorOfLondon Johnson interviewed on Diane Rehm show about his U.S. capital gains tax bill http://t.co/JPqoHzb05H
— U.S. Citizen Abroad (@USCitizenAbroad) January 23, 2015
Boris Bows – January 2015:
London mayor bows to ‘outrageous’ demand to pay US tax bill – http://t.co/MuJY3rV3Ka http://t.co/ylcQPe8RJN via @FT
— U.S. Citizen Abroad (@USCitizenAbroad) January 22, 2015
The article from the Financial Times includes:
Mr Johnson has previously said he wanted to renounce his American citizenship but that it was “very difficult to give up”.
The clearance of his debt to the US government should remove the major obstacle to him renouncing his American passport, but his spokesman refused to comment on whether he would now do it.
Mr Johnson’s decision to pay up was taken grudgingly but will ensure that his visit to the US — intended to drum up investment for London — is not dogged by questions about his tax affairs.
All US citizens, including those with dual citizenship, are legally obliged to file a tax return and pay US taxes wherever they are living. Capital gains tax on the sale of a primary residence is not applied by UK tax authorities, but is levied in the US.
Mr Johnson’s troubled relationship with the land of his birth emerged last November on a tour of the US to promote his new biography of Winston Churchill, when he revealed he had been hit with a demand for capital gains tax.
Asked whether he would pay it, he said: “No is the answer. I think it’s absolutely outrageous. Why should I? I haven’t lived in the United States since I was five-years-old. I pay my taxes in full in the United Kingdom, where I live and work.”
London Mayor Boris Johnson is the author of – The Churchill Factor – a book about Winston Churchill. While on tour in America, Mr. Johnson announced that he would NOT pay a U.S. tax bill on the sale of his London residence. This announcement was particularly newsworthy. After all, the plight of Boris Johnson is the same as the plight of any “U.S. born person” who has tried to live outside the United States. They will learn that the U.S. regards them as “property” and not as “persons”. Those born in the U.S. do NOT have rights as human brings, but have only such rights as the U.S. allows.
Boris has bowed. He has acknowledged U.S. jurisdiction over him.
What does this mean for Boris? What does this mean for the U.K.? What does this mean for the world?
The end of the beginning …
I am reminded of an oft quoted remark by Winston Churchill:
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
The article generated a number of comments of interest, including:
Well done Boris. You are a great model for other politicians to follow. Great to see that he has put the interests of his adopted country ahead of his own selfish interests. May he go far?
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I was so hopeful Mr. Johnson would have had the courage to stand up to this bullying and protect assets that belong in the UK. He was the poster child for the hypocrisy being a UK citizen placed against the backdrop of the American Revolution. The scene I wrote had him dumping Starbucks coffee in the Thames! Guess the 7.6 million US deemed tax slaves living abroad must look for another hero.
Such a shame, he was perfect and I actually thought he had the guts to do it.
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The US scheme (in both the US and UK senses of the word) taxes not only US citizens resident in other countries but also the countries in which they reside. Why these countries put up with this virtually unique transfer of their national incomes to the US is beyond me. They should pass laws forbidding the payment of such taxes.
Boris is NOT only the latest casualty, he is the greatest casualty …
Boris Johnson is the latest casualty of those with the bad luck to have been “Born In The U.S.”
The “Boris Johnson Chronicles” have provided:
– low grade entertainment (I am sure that there are plenty of “envy specialists” in around the world who believed that Boris should be punished “just because”)
– hope for those 7.6 million persons attempting to live their lives outside the U.S., with diminished value based on their “IRS Discount” and subject to “IRS Persecution”
– pain for Boris Johnson and his family (I feel particularly sorry for the family – don’t marry a U.S. citizen!)
– publicity for the U.S. policies of attempting to levy taxes on the residents of other countries
AND ESPECIALLY
– confirmation of the obvious fact that the U.S. believes it has ownership over anyone born in it’s borders.
The clear lesson and message for all “U.S. Born” people …
Boris Johnson has “bowed” to President Obama, the U.S. Congress and the IRS. He has bowed deeply, respectfully and humbly. He has publicly agreed that he is subject to U.S. control wherever he may live in the world. He has assisted the President Obama in transferring “after tax” British capital to the U.S. Treasury. Mr. Johnson’s decision must be respected.
After all Boris Johnson never chose where he was born.
That said, Boris Johnson has agreed to become a conduit to facilitate the transfer of U.K. capital to the U.S. Boris has “set an example”for all U.S. born people. He has confirmed that their obligations to their “Birthland” are primary, permanent, and should receive priority.
The message is clear: If even Boris bowed, what hope is there for me?
It’s the end of the beginning. What should this mean for Boris and his future? What’s the next step?
I certainly understand WHY Boris agreed to pay his “tribute”. Yet, Boris Johnson is one of the few people with the resources and moral capital to fight the immorality of U.S. tax policies. But, he didn’t. If Boris didn’t, how could anyone else?
But, let’s not forget that:
Likes the quote: "To those whom much is given, much is expected." http://t.co/toSOJ35HDv via @goodreads
— U.S. Citizen Abroad (@USCitizenAbroad) January 22, 2015
Boris Johnson is the Mayor of London. He is a U.K. politician. It’s reasonable that he be held to a reasonable standard of behavior. Boris Johnson simply cannot be in a position where his is required to obey the laws of a foreign power. Boris has bowed. He has acknowledged his helplessness and his servitude. He has confirmed that he will both:
– accept that the U.S. has jurisdiction over him; and
– comply with whatever U.S. demands of him.
The conclusion for Boris Johnson is that …
Boris Johnson must resign his position as Mayor of London. He simply cannot both be the Mayor of London and the loyal and humble servant of the United States of America. One cannot both be the “Mayor of London” and assist in the transfer of U.K. capital to the U.S. Treasury. It’s a sad thing. But, the conclusion is inescapable.
Salvation lies only in renunciation of U.S. citizenship …
Boris must publicly announce his intention to renounce U.S. citizenship. He must then follow through in a public way. His obligations to the people of Britain demand nothing less. Only after he has renounced, will he be able to proudly say:
The name’s Johnson, Boris Johnson.
Without a CLN, he is nothing but U.S. property. It is not possible for him to serve in British Public Service.
The broader conclusion is that …
No Governments can allow “U.S. Born” people to run for or serve in public office. To do so is to cede the sovereignty of the nation to the United States of America.
The broader implications of a “U.S. place of birth” need to be considered by all governments.
In line with USX’s ‘Americans in Canada’ post, for those of us with a more Canadian centric view:
Fuck All The Canadian Americans
That’s, for anyone reading WhiteKat’s comment out of context,
FATCA =
…another to be added!
@Calgary411, I thought that was self-explanatory. 🙂
@WhiteKat,
I too was still thinking about the “Americans in Canada” thread by usxcanada and the discussions there. So at first I thought your slogan reflected the Harper government’s local translation of FATCA. But then I realized that they have deliberately chosen to refer to all of us only as “Americans residing in Canada”, not as Canadians at all, so the acronym wouldn’t come out right.
As per usxcanada’s theme, the Harper Conservative Canadian State official version of it would be; “F All Those Americans in Canada” – which would be the FATAC IGA.
Badger, point taken – the slogan does not fit neatly with USX’s post regarding how fellow Canadians view us as ‘AMERICANS in Canada’.
However, since the SOURCE of the FATCA attack is from the US (not from Canada), I guess “Fuck All The CANADIAN Americans” works just fine.
@WhiteKat,
or perhaps, as we are conveniently cast as scapegoats, the US homelander version is;
“F All Those Citizens Abroad”.
As to Embee January 22, 2015 at 5:35 pm
I think that this may be a possibility. Perhaps they had him apply for a “letter decision” to abate penalties and such.
However, it would be nice to know the complete facts of the case. When did he purchase the house? How much did the value of the house appreciate in GBP whilst he owned it? How much was the counter value in USD according to the exchange rates trading at the moment of purchase of the home and the moment of sale of the home?
USD/GBP rates have fluctuated significantly in past decades (example: http://fxtop.com/en/historical-exchange-rates.php?A=1&C1=GBP&C2=USD&YA=1&DD1=01&MM1=01&YYYY1=1970&B=1&P=&I=1&DD2=25&MM2=01&YYYY2=2015&btnOK=Go!) from ~2.64 in 1970 and fluctuating between 1.5 and 1.7 over the past couple of years, with low of under 1.1 to high of over 2.1 (I seem to remember peaks of up to 2.4 that may not show on the graph) since the mid 90’s.
Perhaps he purchased the home when the value of the dollar was low and sold when the USD was higher against the pound, resulting in a reduction of the effective capital gain in USD (assuming the property appreciated in GBP terms during his ownership which seems likely given the UK market). In this case, maybe he gave in because the capital gains taxes weren’t so bad as they would have been had they been applied against the real gain in GBP.
On the other hand, perhaps he purchased the home when the dollar was at a higher value than when he sold it, resulting in fictitious capital gains in USD much higher than the real gains in GBP. In such case he may have cried “confiscation” and negotiated a deal because in such cases the capital gains tax could theoretically eat into the initial down payment and thus constitute confiscation. If this was the case, perhaps he negotiated a letter decision or something of the sort. But there are certainly hundreds of thousands of people who could potentially be in the same situation. Would they be able to negotiate a settlement or be forced to forfeit their capital because hélas they are not notable individuals such as Johnson?
One should not forget that if money that would otherwise be used as a down payment on a house were kept in a savings account abroad, the IRS would be interested in taxing the interest minus foreign income tax upon interest. The fact that the use of that money to purchase a home could result in a fictitious capital gain resulting in loss of some or all of the down payment funds is not only a perversity, but an inexcusable discrimination that is inconsistent with various laws dealing with housing equal-opportunity. Certainly the purchase of property involves risk, but that the risk vastly increases due to a national origin criteria — due to market forces independent of local market forces and the homeowner’s local financial situation– is unacceptable.
To really understand what happened with Johnson we need the facts of his case. Figures, dates, and the final tax bill that he actually paid.
@WhiteKat: Hmmm …. a little too much energy required there …. far too promiscuous for my taste.
@Jefferson D. Tomas: Not relevant to the Boris case but, out of mere conversational interest, when it was US$2.40 to 1 GBP in the 1960s and Jamaica and Cayman started issuing their own Dollars (instead of their own Jamaican Pounds as part of the Sterling area – Cayman was a dependency of Jamaica up till Jamaica went Independent in 1962), the rate for those became US$1.20 to 1 JAD which was equal to 0.5 GBP (Ten Shillings) … same thing for Cayman. The Cayman Dollar has retained its value vs the US$ to this day … the JAD not so much at all, now being convertible at about US$0.0087 to 1 JAD
Ok … Back to Boris …..
@nervousInvestor, re: ” @WhiteKat: Hmmm …. a little too much energy required there …. far too promiscuous for my taste.”
LOL, I thought so too, so had one of the admin’s modify my comment.
@Badger, that works! …was also thinking ‘F All Those Canadian A$$holes’.
Boris might actually do it this time!
15 February 2015 Last updated at 00:17 ET
‘Boris Johnson ‘intends to renounce US citizenship’ ‘
http://www.bbc.com/news/uk-31475945
More on most recent Boris developments:
http://www.theguardian.com/politics/2015/feb/14/london-mayor-boris-johnson-to-renounce-us-citizenship
http://www.telegraph.co.uk/news/politics/conservative/11413801/Boris-Johnson-clears-way-to-Number-10-by-renouncing-US-passport.html
Man- I just can`t read all the BS about paying your “fair share” anymore. It is nauseating.
Too bad Boris couldn’t have told the scum-sucking IRS to go suck rocks and sent his passport back to the US with a letter telling them to stick it up their you-know-where where the sun don’t shine.
Someone with a State Department IP address made an odd edit to Wikipedia earlier today: changing the sentence “Boris Johnson renounced his US citizenship after the IRS taxed his sale of his house in London” to “Boris Johnson threatened to renounce his US citizenship …”
https://en.wikipedia.org/w/index.php?title=Renunciation_of_citizenship&diff=prev&oldid=657448280
Not sure if it’s just propaganda, or if the guy has inside information and is violating Johnson’s privacy by revealing it.