This is the comment of the day, from omghe’sstillanamerican:
Yes the UK talks about collecting foreign account information of residents of their own countries while the Treasury department issued this gem (Bloomberg Businessweek):
“When taxpayers overseas avoid paying what they owe, other Americans have to bear a disproportionate share of the tax burden,” Emily McMahon, the Treasury’s acting assistant secretary for tax policy, said in the press release. “FATCA is an important part of the U.S. government’s effort to address that issue and these regulations implement FATCA in a way that is targeted and efficient.”
Wouldn’t the US and the other country be fighting over the same tax dollars if one uses residency to tax and other uses citizenship?
Considering that 50% of Americans living inside the US hardly pay any tax, they’re the ones who are a burden on the system and causing other Americans to pick up the tab for all the services they’re not paying for. How come the Treasury never has anything negative to say about them?
Do they really think that an offshore population that represents only 2% of resident Americans can actually make a difference on the American budget?
If we don’t live there then we have no obligation to share any of the financial burden. Is citizenship accompanied with a franchise fee? What obligations do involuntary citizens have towards a country that they have never had any part in?
You can’t have a rational argument when the other participant is committed to an irrational position.
All that we get from the Treasury is lies piled upon lies. The IRS’s position on citizen based taxation is hypocritical in that it won’t let a citizen expatriate for tax reasons but the IRS’s only interest in its expats is as a potential source of revenue. And then it wants to even maintain that it has the right to tell us how we can earn the very dollars that it wants to tax.
I’ve come to the realization that my bipolar friend is much more rational than the IRS.
This quote makes me furious: “When taxpayers overseas avoid paying what they owe, other Americans have to bear a disproportionate share of the tax burden”
This is complete nonsense. US persons abroad who are tax compliant to the US bear a disproportionate share! This is especially true for the middle class in some European and other locations where the cost of living is higher than in the US, and even more so with the lower value of the dollar over the past few years. People with incomes over the Foreign Income Exclusion of $95,100 have the remainder of their income taxed in the brackets above that amount. Often, foreign tax credit does not offset this if one is in a country like Switzerland that has slightly lower income tax rates (but higher rates for other things, plus a wealth tax for any non-pension savings beyond CHF100k). US tax regulations do not take into account the cost of living or the differing tax and deduction structures abroad (coupled with VAT and other common fees that must be paid each year). I think that people with incomes over 95k are still done in by the Alternative Minimum Tax (somebody please correct me if I am wrong). US tax code allows for some deductions based upon US State retail sales tax paid, but not on foreign VAT!!! More discrimination!
Also, even the mandatory company pension schemes in countries like Germany or Switzerland (and probably others) seem to be double taxed by the US to the effect that (when coupled with the lower income tax paid each year in those countries—due to the deductibility of pension contributions in the foreign country, the higher US tax due to lower Foreign Tax Credit that these deductions result in, the apparent requirement that such contributions be treated as income and not deductions for US tax purposes, and the exit taxes imposed by the foreign company at retirement age) result in a severe negative return on investment!
This discriminates not only against the US person, but against other family members who might be non-US persons and who might never have even resided let alone set foot in the United States!!
We and our families are being discriminated against, and not allowed to benefit from the mandatory and voluntary savings programs that our neighbors benefit from!
All this is going on while the US is able to devalue its currency through interest rates and market fluff (making it harder for Europe to export there, making it harder for us to get jobs abroad) and pushing us into higher tax brackets.
I would say that if Levin (see SON OF FATCA http://www.levin.senate.gov/newsroom/press/release/levin-conrad-introduce-cut-tax-loopholes-act) continues his rants, somebody should make him persona non grata like they did with Bush a few years back (rumors of a criminal complaint to Swiss attorney general or Cantonal prosecutors for war crimes). He should be arrested under European discrimination laws! How the arresting country would claim jurisdiction or manage physically to arrest such a person despite his possible SS (read Secret Service, or leave to your imagination) escort is another matter, but I think he and those like him deserve to be prosecuted openly.
Let him explain himself in court! Let him explain how he could in his right mind propose such laws! Make him read the Constitution of the US, and the Declaration of Independence in open court and then cross-examine the guy!
If some of us are afraid to visit friends or family in the US because of this whole mess, let the Hon. Levin cancel his next vacation abroad if he wishes to avoid such an above-described episode!
ACA has a very good documents about these issues and what should change. But what I am concerned here is that up to now I thought the IRS was after Americans living and working in the USA who were making and hiding investments in foreign banks, Now it seems that this is not so. They are indded after Americans Living and Working Abroad and considering us tax cheaters.
@Mark, I like the way Roger put it: “You are basically wrong for living outside of the US because the US is the greatest place in the world.”
I was also infuriated with this IRS spokesperson’s comment. The real effective tax (if you include all the taxes we pay in Brazil) is double anything in the US. The only way that someone could live a life with no taxes is only if they live in the North Pole or Antartica. Even by their own rules, we don’t owe them anything, yet they keep screaming that we are tax cheats.
It’s also got to be about “keeping the image”, turning us into public enemies. The American war machine survives by making enemies wherever it can. I think this is just a parallel ideology to justify their own policies/agenda whatever they may be.
This is what I can’t possibly understand why anyone would want to be loyal to that government. You do nothing wrong, but they call you a criminal. I didn’t choose to be born there, nore did I ever predict that I would end up in a small town in Brazil.
Nope, the IRS has got that one covered already: link
Let’s tax those fat-cat penguins! All sitting around in tuxedos all day long and not working. I bet they got royalties from that March of the Penguins movie and hid them in an offshore account.
Eric has covered Antarctica. North Pole is in Canada. Isn’t that what Arctic sovereignty is about?
North Pole has an internationally recognized Canadian postal code. Children around the world every year write letters addressed to Santa Claus, North Pole HOH OHO Canada. Those letters always reach Santa. Volunteer Canada Post elves respond. Soon IRS will find a way to tax them. Oops–there I go again–giving them ideas.
Plus, in 2010, Canada’s Minister of Citizenship and Immigration declared Santa is a Canadian citizen. And, we all know Santa is fattest Fat Cat of all. How else does he afford all those gifts, glitzy sleigh, nine reindeer, (including that one with the flashy red nose!) and his whirlwind world trips every year?!?) Then, he’s just plain lazy for the rest of the year.
Santa must have lots of $$$$ stashed away in an RCTA. (Registered Christmas Toy Account). I sure hope Jim Flaherty is prepared to protect Santa. If not, it will be a lump of coal this year in Flaherty’s stocking!
Sorry, I fumbled above, correction:
“…and the exit taxes imposed by the foreign [country] at retirement age….” (not company).
When Jefferson heard from his servant (I think he still had slaves) that his house burned down, he was most exasperated when he found out that nobody was able to save his book collection.
Sorry, didn’t you hear the news? The feds already nabbed Santa on Christmas eve 2011: http://isaacbrocksociety.com/2011/12/24/breaking-news-santa-claus-arrested/
@Petros: Ho Ho Ho! (except there really isn’t anything jolly or funny about all of this!).
Has Santa been released or is he still behind bars? Did Jason Kenney stand up for this Canadian citizen?
@ Blaze I think he’s being held in Guantanamo Bay. But news is scarce.
Didn’t I read somewhere that the Supreme Court ruled a while ago that taxes are for goods and services provided by the government, and that if you can’t or don’t get goods and services from the government, they can’t tax you?
So now — for folks living in Canada, who have made no claims on US “benefits” or “services” nor exercised any “rights” of US citizenship since coming to Canada and expatriating themselves by becoming Canadian citizens voluntarily and with the intent to relinquish US citizenship, what rationale exactly is there for ex post facto IRS claims of a right to tax them? When the US has done diddly-squat for them in decades, and hasn’t been asked to do anything for them?
It’s one thing to hit dual citizens who hold US passports and vote in US elections etc etc — but people who relinquished, or believed they relinquished in good faith and in fact did so according to Section 349 of the US Immigration and Nationalty Act, don’t owe the IRS or the US a damn thing. Nada. Zip. Nichts. Rein.
Seems to me the IRS has been taken over by descendants of Al Capone.
Interesting move on their part – making it an issue of fairness, “We pay, therefore they should pay too.” Good strategy and probably designed to counter the noise we and others are making. Americans in the homeland either sincerely think we are evil tax evaders or (equally bad) they have their dreams of escape and envy those who have already done it. I was reading that there is yet another book out recently by someone who threw away everything and moved to France to live the good life. These books are bestsellers. People *need* to believe that there is something better, more exotic, more wonderful than life in Tacoma. That life is simply life wherever you go is not an acceptable message to millions of people starting down high unemployment rates, dropping house prices and fewer government services. Mr. Conklin is correct: “Sin tax.”