Taxation #AmericansAbroad: Citizenship taxation vs. Residence taxation: M. Kirsch – B. Schneider May 2/14 Toronto https://t.co/KTe7wnQaNG
— Citizenship Lawyer (@ExpatriationLaw) March 2, 2015
Video also Here
“Revisiting the Tax Treatment of Citizens Abroad:Reconciling Principle and Practice” M.Kirsch
“THE END OF TAXATION WITHOUT END: A NEW TAX REGIME FOR U.S. EXPATRIATES”
Bernard Schneider- April 15, 2013 letter to the Ways and Means Committee
With thanks to Embee for the articles
If this is the discourse among academics in the U.S. then it’s no wonder congress doesn’t get it. They are not talking to us, they’re listening to people unaffected.
I too want to see the full meeting.
Any debate of US CBT must address the clearly involuntary and clearly unethical issue of those bound from birth by accident of birthplace or parentage who will never be allowed by US law to renounce/relinquish, and who the US refuses to let be freed by proxy – through legally recognized parents/guardians acting on their behalf.
There is no actual or meaningful “participation” in the “US community” if one not only lives outside it but also does not have the capacity or autonomy to conceptualize citizenship, to vote, or to obtain a US passport on one’s own volition. If one cannot conceptualize or comprehend citizenship, or the rights, duties and obligations it entails, including taxation, etc. then the whole argument about voluntary exercising of ‘benefits’ or meeting ‘obligations’ is moot. However, being legally incompetent and lacking comprehension does not and should not strip someone of any inherent rights.
The vulnerable are being preyed upon by the US. And whether it continues as a sin of ommission (omitting to act to right the wrong) or commission (actively choosing to continue to inflict harm regardless), the result is the same. The US and US extraterritorial citizenship/parentage/birthplace taxation of persons with no US residency and NO economic connection is simply an indefensible and ethical wrong. Who amongst these US academics and lawyers will speak for those who have no voice?
Why is that not an issue worth noting? Why isn’t it being written about?
I can’t take seriously academics debating US extraterritorial CBT unless they acknowledge that very glaring and obvious fact. There is no acceptable rationale for taxing and burdening the vulnerable outside the US.
It is just an exercise in UScentric egoistic self-congratulatory wanking if the debate over CBT doesn’t address the actual nitty gritty realities of the considerable harm that US extraterritorial CBT and enforcement is actively causing to innocents, minors as well as the rest of us abroad.
@Badger Well said.
On the legal wish list: class action by alien family members against the US Government for damages due to CBT ripping at the family financial unit as a result of a US person being a member of the family.
Most impressively said! Bravo!!
And Thank You for articulating it so well.
Kirsch thinks CBT is acceptable if it can be administered humanely. How he can condone it while it’s clearly not being administered humanely and facing so many impediments to EVER being administered humanely, makes his vision of CBT purely HYPOTHETICAL (let alone being based on any model of success).
Kirsch’ dreams of CBT’s success are like dreams of Utopia – only sought after to the degree that they’re unattainable. Yet for those who like to tinker with broken things in an attempt to fix them, his message will resonate. For instance his message to fix the problem by making fewer people American citizens. Since when does abuse end by killing the victim?
We’d get the impression from Kirsch that taxation GIVES value to citizenship – which it does not!
An oft-repeated comment I made last year began with this:
Take a wild guess who I was referring to.
These brutes who are allowed to pontificate and make apologies for the policies that cause so many Americans to renounce are nothing short of nauseating.
If these benefits are so great such as the ability to vote, why not ask for unemployment, health care, old age pensions, welfare and the list goes on. I bet the US wouldn’t put those benefits on their list for expats. No, you leave and you get nothing. Pay our taxes and we’ll give you greatest opportunity in the world…vote!
Such a ridiculous high cost price for a vote when all is said and done. Are we stupid?
Our vote, Ann — with the US electoral voting system, does our vote mean anything at all?
Yes, are we stupid?
Voting is not a benefit of citizenship, it’s a duty for those who consider themselves citizens. If voting’s so important to Kirsch, maybe he should include people who’ve never voted to relinquish in the same way he and Obama propose accidentals be allowed to.
Thank you badger. I’ve just written this and don’t have time to look at it as I’m out of the door for an appointment:
From Phil Hodgen this week and my thanks, as always , to badger for asking it.
With US Citizenship-Based Taxation, no one, NO ONE, should ever be entrapped into its consequences, especially someone who has and has never had any connection to the US. It should be a CHOICE / a CLAIM by the person involved to make such a claim knowing all of the benefits as well as the consequences. If there is NO CLAIM, that US citizenship which has all of the US Citizenship-Based Taxation consequences should be NULL & VOID. That just makes common and moral sense to me. Can it not make sense to the USA lawmakers? Will the Senate Finance Committee tell me why anyone with a *mental incapacity* should be entrapped into such a toxic situation?
IF a guardian/trustee can act on a naturalisation for a mentally disabled person to become a USC then it makes equal sense for a guardian/trustee to undo same.
…contrary to what I have been told by Department of State, Legal and similar advice by a Washington, DC immigration / nationality lawyer:
Here is the advice I got from US Department of State, Legal: http://isaacbrocksociety.ca/2014/06/01/its-time/comment-page-72/#comment-3097016
…which agrees with the information from an immigration / nationality lawyer in Washington, DC, to confirm this son’s US status and give possibilities for his renunciation. The result was that her children were US citizens from the moment of their births. The following is information from that lawyer based on his conversations with the US Department of State:
Am I just a hard-headed old lady who is disregarded or will the Senate Finance Committee take this egregious collateral damage into account? No one, NO ONE, should have to work around this problem. The problem should be resolved with just law that will affect anyone with some mental incapacity.
If the US cannot change to Residence-Based Taxation to fix this, then at least do something about anyone ever being entrapped into the consequences of US citizenship-based taxation.
Excellent remarks, Badger and all!!
I had to laugh when he talked about voting being of value. Yes, for home landers it is. If were of value to expats there would be no CBT quite obviously. It’s clear expats votes do not count for a damned thing. They have no voice and whose number do they call when they want to address a problem? Who do they email because they cannot email a congress person or senator when all the menus do not include anyone outside the U.S. and even when you can they do not respond to expats. Who here has ever got back a letter? If you did get back a response was it a form letter? I’ve never once heard of anyone getting any response except a form letter and that was only one person.
Citizenship is a birth right and to say otherwise is a human rights violation. The U.S. places a dollar value on citizenship. Therefore only the wealthy need apply. It’s citizenship laws and tax laws are inhumane. THAT is why the rest of the world does not do things that way. Kirsch has jumped through hoops and ignored some facts in order to hold his position and I got the impression his position was from a purely emotional stand point. Good for him. He has choices. We don’t.
He did seem to feel that it is perfectly fine to give up citizenship. In a gentler way he was saying “Well, if this harms you too much you can get out.” except some can’t and some don’t want to.
Kirsch admits that the current way CBT is being administered is unacceptable, but must also know that in order for it to be acceptable to Americans abroad the compliance burdens would have to be reduced to the point where it would be not worth their while to enforce CBT.
Why is the video such an incomplete record of the event?
ACA Global: “we thought [publishing all of] it would actually detract from the message.”
“The message” = “Their message”.
Perhaps instead of referring to the US as having “Citizenship Based Taxation” (CBT), we should refer to it as having a “Citizenship Tax” (CT) as that’s really what it is. Citizenship Based Taxation has a more palatable connotation for academics such as Professor Kirsch as well as Homelanders. Shortening the term to CT creates a liguistic association with Poll Tax, another injustice and human rights violation from American History. I may play around with this on Twitter…
How do Americans abroad feel paying a mandatory Homeland Tax? Isn’t that what it really is since we as non-residents receive little if any benefits from it?
Just sent to me by another Brocker (and I did see reference to this somewhere, likely here): Washington Post, March 3, 2015: “Yes, the State Department can jump on a problem and fix it in record time”
So, come on, Senate Finance Committee and the US Department of State, put your heads together and fix what is wrong with the collateral damages wrought by the US Citizenship-Based Taxation that your country practices. You can do it — we know you can. Why won’t you?
Part of it is that nobody thinks about intellectually disabled people as potential taxpayers.
I read Kirsch 2007 today (it’s lent 🙂 ) and think I know where he is coming from, but the philosophy of citizenship he is using just doesn’t work with jus solis citizenship or long-term overseas residence (and the theoretical perspective he’s coming from has a real blind spot about people who lack the time, money, and capacity for active participation in politics).
The catchiest I can come up with is the re-entry tax. Other variations would be right to reside tax or right to return tax.
Americans only live in America. The re-entry tax is the tax you pay to the US to be able to live outside the US. But eventually you will realise the error of your ways and “come home”. Because America is a far greater country than any other, the right to return to America is more valuable than the right to return to any other country and therefore you must pay for this.
You pay the re-entry tax until you “come home” or until you get tired of paying the re-entry tax and want to give up your re-entry right. At this point, they slap you with the exit tax.
A different analogy in a different context for those who think there is a new Berlin Wall: think of US citizens abroad as being part of a work release program. Your work release earnings are taxed. At the end of your shift you go back. If you want your freedom, you pay the exit tax.
@calgary411: My first thought is, that might be illegal (unless they are trying to claim that an ex-citizen owes “allegiance” to the US even after renunciation):
Perhaps a U.S. passport held by a person who already renounced citizenship does not meet the U.S. law definition of a passport anyway, so maybe this is legal in some weird roundabout way
Basically this looks to me like State trying to pretend to be “reasonable” to renunciants (in the face of other well-known evidence of their unreasonableness) and failing hard.
I can agree with what you say, Eric. Isn’t that why the passport is (was) taken from us — we are no longer US citizens as of the date of renunciation even though it had to have the final blessing of those in Washington, DC. There is to be a record at the border even if we don’t have the CLN in hand and we now would have our itty, bitty US$2,350 receipt for renunciation as proof. A pretty unstable time for travel though.
Do they do this for relinquishers, too? This would seem to potentially set up a trap for being denied relinquishment.
IRS is not operating the International Data Exchange website. When you go to the link, an IRS disclaimer comes up warning you that you’re leaving the IRS website and going to one run by a private business.
All this data encrypted or not is going to be accessible by third parties with subject to the temptations of bribes, or backhanders to obtain a ‘US person’s’ data if not external hackers.
Prediction: There will be a FATCA data scandal and the US Government’s reaction will simply be tough luck.