Can Dual Citizens Be Good Americans?
Just wanted to let Isaac Brock Society know of the debate in the NYT Opinon section going on about loyalities and dual citizenship. Not sure any here have commented there. It seems to be a fall out from the Michele Bachmann Swiss citizenship issue that happened recently.
Also, a depressingly ignorant article on alternet:
http://ow.ly/aWvHW (I really hope that works!)
The US makes me laugh. They run around the world signing tax treaties trying to ring fence tax revenues under the assumption people would never renounce their US citizenship. I don’t blame Saverin at all. The US lives under the premise that the world can’t live without it. So what he renounced and then invoked the US-Singapore tax treaty to avoid capital gains, fair play to him. That tax treaty cost the US $600M because they got greedy and wanted it all. If the US followed resident-based taxation, life for a US ex-pat (and the US) would be simpler without the ex-pat having to push the “nuclear strike button” with renuncitation written on it.
Correct me if I’m wrong but if the US didn’t have the tax treaty they could’ve taxed him?
@john There’s no general tax treaty between the U.S. and Singapore (see here for the list of U.S. tax treaties). The existing treaty only covers shipping and aircraft income. Tax treaties would require information exchange and the “Saving Clause” and Singapore is interested in neither.
Saverin will not pay any future capital gains tax because the U.S. grants 0% capital gains tax to all non-resident aliens, regardless of where they live. Of course this means that NRAs have an enormous incentive to play games to convert dividends and dividend-equivalents (taxed at the 30% FDAP rate) into capital gains, but of course the US loves this since it’s a big boost for its world-bestriding tax consulting industry.
@eric – thanks for that. Well the US or its policitians have no right to whinge. The Congress made the rules and can’t have it both ways. Saverin is smart to take his money out of the FATCA world.
I added my comment to the NYT debate, to the effect that, because of the very uniique Citizenship-Based taxation laws of the US, the only way a non-wealthy person with US citizenship can survive living in another country is to renounce his or her citizenship. This is because US ciizens living outside of the United States are simultaneously subject to double taxation of their world wide income by two countries.
There are some intelligent comments from Jose, Stella, Jason, Jen. Seems like a lot of people commenting are not happy with the US and want to have an additional passport to be free to leave.
@geeez, you really don’t need an additional passport just to leave, but it is unlikely that you will survive the double taxation of the US if you leave to go elswhere, unless you renounce your US citizenship. And to do that you do need to be a citizen of another country in order to have a passport to be able to travel after you have renounced US citizenship.
Dual citizenship is a non-issue as long as neither passport is from the US!
@Don Pomodoro…. I am starting to think that! @Roger there is always the possibility of claiming stateless status in a foreign country (one contraversial figure whose video I posted here some time ago appearantly tried to do that in the Netherlands), but I suspect one should better at least obtain permenant residency status first. Many countries do not accept asylum or refugee claims from so called “safe countries” such as the US. I certainly wouldn’t feel safe in the US now, given my political views that I have expressed here at IBS.
@Petros, you may be able to travel as a stateless person with a “salvoconducto,” issued by the country where you live, but I understand it is a real pain from the one person I have known who did that. He was a Russian born in Shanghai to parents who had fled the Soviet Union and were no longer recognized as Soviet citizens. At the time he was born China did not grant citizenship to persons born there unless both parents were ethnic Chinese and citizens of China. China’s citizenship policy has since changed.
(He ultimately became a Brazilian citizen, having arrived there as a stateless refugee.)
I don’t think I would want to live in China or have Chinese citizenship, even if they do reject FATCA. I could use some Peking duck though. Your acquaintances’s choice of Brazil should turn out all right for him, given the economy.
Jefferson, I don’t recall you saying anything outlandish and crazy enough to incite a mob against you 🙂 – I hope not.
Yeah, the stateless thing is a pain. I could do it, but I’m trying to WAIT for my Brazilian citizenship to be approved. On a day-to-day level, being stateless, American, German, Chinese, or whatever, wouldn’t affect me in the slightest. I’m still considered to be a foreigner here, but I have a permanent visa. BUT I’m afraid that if Brasilia wanted a document from me, and I said “I’m stateless”, then it would make the case even harder and take longer to be approved. That’s the only reason I don’t pay the $450 fee to remove the ball and chain.
The “salvaconduto” that Roger is talking about is likely to be the “UN Travel Document”. If you look at this, it’s expensive and the duration is only ida-e-volta (there and back). The Government retains it when you arrive back in the country. From a cost-benefit, the UN Travel Document is bad, but if it’s the only way to travel, then it’s good that it exists for the people who need it.
@geeez Depends upon the country I think. I think that some countries issue it for a period of years. In any event, usually you have to obtain a visa for every country you visit or transit through. Definitely something to hash out with your local authorities before becoming stateless.
My comments may seem outlandish to short-sighted homelanders who haven’t yet stopped to evaluate the situation objectively. One guy just commented “your legal arguments are flawed” without stating why. I responded and invited him to formulate his arguments come to IBS and share his opinion with us.