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Comment by toth | Hacker News Reader

Not sure why this is downvoted to gray, it is correct. In most countries, if you are a tax resident, your foreign income is taxed. What is unusual about US is that it also taxes foreign income for US citizens that are living abroad, almost no countries do this.

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Well, we are in good company with Eritrea I guess... https://en.wikipedia.org/wiki/International_taxation#Citizen...

I think because the original comment is ambiguous. It isn't clear whether by "income I earn overseas", he's referring to income earned while a tax resident of another country (for example living and working there) or income earned while a tax resident of the US (for example through overseas investment or < 1yr work).

One commenter appears to have assumed the former, the person replying assumes the latter.

Even foreign income that the host country considers to be a pension with special tax treatment (like 401k)

http://www.afr.com/business/accounting/irs-chases-us-citizen...

I know someone who is giving up US citizenship on return to Australia for this reason.

Well if you look at it from a Govt's perspective it makes sense. Even though you are US citizen living outside US you still part of the club for which you have to pay membership fees. If you dont like that you are free to leave the club and take some other citizenship.

No, because you don't cost the govt anything. You don't use any public services in the USA, you use the public services where you live. You're paying for literally nothing but a passport.

> You're paying for literally nothing but a passport.

Which is exactly what I meant, you are paying the membership fees whether you use the services or not. The US govt knows that, if you dont like you are free to give up that passport which I am sure you wont.

Renouncing US citizenship is not something you do by filing in a form and sending it along with your passport to the US embassy. It can take years, plus many lawyers, and in the mean time you have to continue paying taxes, and pay for the process thereof.

It's not that simple.

and it even costs a fixed fee to get a passport.

If switching citizenship was on the level of ease like switching rental apartments, complex but doable, then you'd have a point, but you generally don't have that much choice in your citizenship. It is one of the last bastions of socially accepted generational discrimination. Countries try to keep you in their club and try to keep others out of it, even if discriminating between people based on where they were born is objectively morally wrong.

Not that I think it's a good idea to get rid of borders today, just that a natural extrapolation of western morality, which favors choice over birth, leads you down a path to a borderless world.

I am a citizen of a foreign country, I have a job in that country, I store my money in that country, I buy practically all of my products in that country. Why should the fact that when I was a baby, the US government decided to give me citizenship cause me to pay more taxes (or at least pay more to file) than my neighbor who is not a US citizen?

So why dont you renounce your US citizenship?

The US govt knows that most non resident US citizens even if they dont like paying taxes are still going to pay it because those citizens still want to be part of club US.

Renouncing citizenship is expensive and non-trivial. The US global taxation regime is a trap.

Yes I know its convoluted but do want to keep paying taxes every year or just renounce citizenship , it's your choice.

Just renouncing US citizenship costs several thousand dollars in legal fees and could take up to 5 years. What you are suggesting is similar to telling someone who is complaining about rent prices to just buy a house.

Well why doesn't the US government just decide to tax its citizens the same as nearly every other country in the world? You're saying that the solution to a bad system is to move, rather than just making the system less terrible.

I am talking about realistic scenarios, that person can renounce US citizenship, changing the US tax code is not in his hands, is it?

It is not correct until that "As an individual I am taxed on income I earn overseas. Why shouldn't a corporation?" implied living overseas as well.

I always thought this kind of made sense. I mean, you still enjoy the benefits of being a US citizen. You are also more likely to use the embassies and consulates.

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