US expats given hope of lower tax bills
Republicans edge towards eliminating need to pay levies overseas and at home
published in the Financial Times
by Demetri Sevastopulo and Barney Jopson in Washington
You can read the article by answering a simple question that appears when the page loads. I cannot post the entire article due to copyright restrictions.
Here are some excerpts:
Millions of US citizens working overseas could see their tax bills lowered by an overhaul of the tax system as Republicans edge towards eliminating a requirement for American expatriates to pay taxes both overseas and in the US.
Kevin Brady, the Republican head of the House ways and means committee, which is drafting a tax reform bill, said lawmakers were considering the measure, which has been the focus of lobbying by Republicans Overseas, a group of party donors around the world.
“It is under consideration. They have made the case,” Mr Brady said in response to a question from the Financial Times at a Christian Science Monitor breakfast. “Lawmakers representing that area of the tax code have made that case.”
The US Chamber of Commerce, a business lobby group, has urged policymakers to consider US-only taxation for individuals, too, arguing that taxing foreign income hurts American managers at the overseas affiliates of US exporters.
Mark Mazur, who was the top tax official in Barack Obama’s Treasury department, said he supported the change, arguing that it was necessary to address the “inequity” of an expat paying tax on the same income to both the US and a foreign government.
“If you take two people, one works in London, one in New York, working for the exact same US multinational — if they make the exact same amount of money you might think they should be taxed exactly the same,” said Mr Mazur, who heads the Tax Policy Center.
Solomon Yue and Michael DeSombre are also mentioned in the article.
There are quite a few comments with JC doing Yeoman’s Duty.
“The rich do not understand the poor.”
Yes, Anatole US is Anatole France on steroids.
But that’s not all.
The poor don’t even understand the poor, when the former are homelanders and the latter are diaspora.
“We took years to make the decision. It isn’t costing us $2350 plus a few tears. It’s costing us our entire life’s savings to buy a passport of convenience through a property purchase”
There is an alternative. You could pay your entire life’s savings in FBAR penalties instead.
@Barbara
+1
“”We took years to make the decision. It isn’t costing us $2350 plus a few tears. It’s costing us our entire life’s savings to buy a passport of convenience through a property purchase”
There is an alternative. You could pay your entire life’s savings in FBAR penalties instead.”
That is peobably the best summation of our plight I have yet to see.
“”We took years to make the decision. It isn’t costing us $2350 plus a few tears. It’s costing us our entire life’s savings to buy a passport of convenience through a property purchase”
There is an alternative. You could pay your entire life’s savings in FBAR penalties instead.”
That is probably the best summation of our plight I have yet to see.
…and when you’re having to use the majority of your paycheck to put food on the table? What then? I guess it doesn’t matter that for some people. their paycheck means whether they survive or not.
And as far as “life-savings”? BWA HA HA HA HA HA…What FUCKING LIFE SAVINGS?
…wait…~dripping sarcasm~ I got a grand total of $2.55 in my pocket…Will that help my wife get loose from the US Government or will that put Ramen on the table for my wife’s and my dinner tonight. I’ll go with the Ramen. The US Government can fuck off.
“if you’re one of the tens or hundreds of thousands of Americans living in Saudi or Korea or Nigeria or China or Iceland, or other such places where it is either nearly impossible, or extremely unattractive, to take on local citizenship–even if we choose to or even enjoy living there–then renunciation is one of the most difficult decisions one can face.”
Yes, for some, various factors may make renouncing a less feasible option. I sympathize. But condors try to scare people into believing that renunciation is itself such a difficult process, fraught with risks, that it’s not an option for them or means hiring the services of an expensive advisor. It’s just another scare story.
“Yes, for some, various factors may make renouncing a less feasible option. I sympathize. But condors try to scare people into believing that renunciation is itself such a difficult process, fraught with risks, that it’s not an option for them or means hiring the services of an expensive advisor. It’s just another scare story.”
Not being able to afford the services condors offer, I know little of and care less about what they say.
My worries are based upon my own life experiences, reading the history of this mess and the experiences of others.
@Barbera
“Anyone who claims renouncing is easy, try thinking outside your own borders.”
Exactly. Unfortunately some people cannot see beyond $2350 and a signature, usually homelanders who actually try and excuse US persecution and local discrimination on the grounds that the victims can “simply renounce”.
@ND
“(ordinary company employees usually don’t have to file a return).”
True BUT their company files one for them, or at least usually do. As nothing is universal, there are probably cases where this is also not.
“(ordinary company employees usually don’t have to file a return).”
‘True BUT their company files one for them, or at least usually do.’
That’s not the same as a return. It’s similar to a W-2, but the employer is supposed to adjust things in December so that the amount of withholding equals the amount of tax. Payers of interest and dividends are supposed to deduct the correct amount of withholding from those too, so ordinarily the person doesn’t have to file any return.
‘As nothing is universal, there are probably cases where this is also not.’
Yes. One reason I’m an exception is that my employer no longer has anyone capable of doing that December adjustment. Other exceptions are if salary exceeds an amount which used to be 15 million yen but I think it’s changed, or if a person had two employers who don’t coordinate the computations of withholding, or some kinds of investment income other than interest and dividends.
“That’s not the same as a return. It’s similar to a W-2, but the employer is supposed to adjust things in December so that the amount of withholding equals the amount of tax. Payers of interest and dividends are supposed to deduct the correct amount of withholding from those too, so ordinarily the person doesn’t have to file any return.”
True, but the employee is still in the system despite never filing on their own.
The ACT of renouncing is easy, but costly. However, the path that gets you there is long and arduous. Depending on your chosen nationality’s immigration laws, it can take YEARS to be eligible for citizenship. Also, it can take a couple of years just to get tax compliant in the US in order to take the oath. Aside from the tax forms, there are piles of other paperwork necessary for gaining a new citizenship and renouncing the US one – all of which are time-consuming and expensive (criminal records, apostilles, notary services…). Some countries also require language testing and a civics exam. My personal journey took three years and cost about €4000 in total.
So, yes, I would tend more to agree with those who say renouncing is expensive. It is a huge time-suck and emotionally draining as well.
http://www.dailywire.com/news/22953/obamas-irsthe-other-scandal-brad-schaeffer
Has anyone else heard about this IRS scandal? They ADMIT to having persecuted certain groups under the Obama administration and issued an apology. Of course, no one was sent to prison or fined. Very little in the news about it (probably so they can save face).
“My personal journey took three years and cost about €4000 in total.”
To clarify, it took three years from the time I made the decision to change citizenship. Conveniently, I had already been residing in my chosen country more than long enough to meet the requirement, which is normally 30 (!) years, but I was eligible after 6 years of marriage to a citizen.
@Petlover
It seems that the IRS di apologize in court. However, the US media is just as interested in it as they have been throughout this whole scandal, not at all.
Not only has no one gone to jail, a key figure in it received a huge bonus for her role in spearheading it If memory serves, her bonus was $300,000.
Even though the IRShas been caught, and the IRS has paid an undiclosed amout to the parties they ceated against, the individuals who did the cheating have been given huge rewards. Don’t look for sweeping change until their rewards are taken back and they go to trial, which ain’t gonna happen.
@Petlover
Ay I ask what the three years between when made the decision to changing citizenship were like? Just file a few sheets of paper and wait or nonstop paper chasing, trying to compile huge amounts of documents in time to beat deadlines while trying to earn a living or somewhere in between?
@Barbara
I am horrified by your story. Have always felt sad after reading about your predicament.
I made your comment a post on citizenshiptaxation.ca where it has 110 views in just a couple of hours. Also put it up on some of our FB sites where folks are very sympathetic to your plight. If you cannot read FB I will post the comments here……..
http://citizenshiptaxation.ca/renouncing-for-some-is-excruciating-not-because-of-the-emotional-ties/
https://www.facebook.com/CitizenshipTaxation/posts/915476151943127
https://www.facebook.com/groups/citizenshiptaxation/ 2nd post down
https://www.facebook.com/groups/AmericanExpatriates/ 3rd post down
@Patricia Moon: Well, I’ll be darned. I’m happy to let you circulate my comment. Though in some ways it’s like preaching to the choir in such groups.
I wish there were some way to communicate in simple terms to the vast unwashed disbelievers (Homelanders), not only my little story, but some of the others who feel trapped in complex webs, like The Animal and Japan T, to give some idea of how the situation isn’t about prosperous expats trying to weasel out of shelling out tax money, but is in fact a greater oppression that weighs so heavily on all of us that we’d take the most drastic measures to free ourselves of it.
Looking forward to Thursday’s announcement of tax reform, though my low expectations are plummeting further, as early reports make it seem that the Republicans are trying to come up with something they label as Territorial Taxation, but is CBT in sheep’s clothing (see: “minimum foreign tax” for corporations). If they can’t even come up with TTFI or RBT for their beloved corporations, what hope have we flesh-and-blood entities?
” Conveniently, I had already been residing in my chosen country more than long enough to meet the requirement, which is normally 30 (!) years…”
Petlover, I am scratching my head trying to think of what country that could be. I thought Bhutan was the strictest (setting aside those countries where naturalization is essentially impossible, or possible only through royal decree) with a 20-year residence requirement.
“That’s not the same as a return. It’s similar to a W-2, but the employer is supposed to adjust things in December so that the amount of withholding equals the amount of tax. Payers of interest and dividends are supposed to deduct the correct amount of withholding from those too, so ordinarily the person doesn’t have to file any return.”
‘True, but the employee is still in the system despite never filing on their own.’
Yes, but the point was that even before the invention of the My Number system, when we didn’t have equivalents of SSNs and ITINs, the NTA had no trouble matching up our incomes and withholdings and taxes payable.
The main point was that IRS does the same even when SSNs a/k/a identity theft numbers are missing from forms. They do match us up, except when busy embezzling the withholding.
@ND
Got it. Thanks.
@Zla’od: I’m also curious which country Petlover refers to.
I know that Liechtenstein has a 30-year residency requirement. But they also have a law unique among nations: No matter how long you’ve lived there, you can get around the 30-year rule if a majority of the residents of your local community vote in favor of your becoming a citizen, and then the Prince must grant you citizenship.
https://www.sapling.com/8253400/receive-liechtenstein-citizenship
Naturally, I considered a move to Liechtenstein, where I’d hold a lot of barbecues for my neighbors!