US Citizenship in reality is an IRS trap.
Now Biden wants to hire 87,000 more IRS workers to harass americans.
This used to be a great country.
Times long gone.
Now Biden wants to hire 87,000 more IRS workers to harass americans.
This used to be a great country.
Times long gone.
Ironically it does not apply to corporations that fail to pay billions in tax.
It's not that someone is tax resident of different country.
The disgusting part of this IRS racket is that US forces people to pay taxes to US even if they no longer live there. Eritrea is the only another one like US in this aspect.
I knew this was a thing, but I had always assumed a US citizen living abroad only ended up paying tax to the IRS if the tax they paid to the foreign government was less than what they would have paid to the US, and only the difference is paid.
But it seems that’s not the case, and you get an exemption for “only” the first $108,700 of your earnings.
As with everything the IRS does, it seems complex and full of exemptions, but I have read that (badically) correctly? You could end you being double taxed if you earn more than that?
I can't remember if the amount was exempted under $108,700 but I don't think it was given how mad he was that he closed the account because the paper work wasn't work dealing with.
My dad's friend told me a horror story about his friend's mom who was born in the US while he parents were on vacation but she never lived there. The mother is currently retired and is collecting a pension, then she got a letter from the IRS saying that she owed back taxes because she's a US citizen and never filed.
Most unlikely, that's an earned income exemption. So basically salary or say invoices paid for consulting that year when the work was performed while physically on foreign soil (US taxes you 100% for any work done on the seas or in international air space)
What kind of state sponsored racket is this?
However, given that the global consensus is to tax by residence, the US should absolutely change its policy to avoid the hassles due to this inconsistency.
Also keep in mind that you can write off any taxes paid to a foreign government so it's really just a tax on those who make lots of money in low-tax jurisdictions.
Being a non-citizen in the country I live means I am at the end of the queue for vaccination, while the US State Dept says it won't arrange for vaccinations of US expats, but countries like France and China are doing it for their citizens.
I can't maintain a bank account in the US because without a US mailing address the banks simply refuse to provide me services. The US government could care less, has no requirement that banks provide services to US citizens overseas.
And China, in theory and sometimes in practice.
https://www.bloomberg.com/news/articles/2020-07-10/china-sta...
I'm not sure why the US thinks it is so special that it is entitled to tax people who happen to be born there even if they have nothing to do with the country any more. You aren't taking a loan on taxes during your childhood; that period is sponsored by everyone else. It goes both ways.
State income taxes are usually pretty low.
Texas and Florida don't have an income tax.
Georgia ranges from 1% to 5.5%.
California goes all the way up to 13%.
In NYC, earning about $100k a year, the effective rate is ~28% tax (ie, you pay $28k tax a year), including federal (~15%) and state (~5%), social security etc.
In the UK, for £100k, it looks like it’s 27.4%.
So very similar levels.
So you pay zero on the first £12,570 of earnings. Basic rate of 20% from £12,571 to £50,270 of earnings. And then 40% on £50,271 onwards.
(We have additional rate over £150,000 of 45%).
It's important to remember you don't pay a flat %age on your income. It's worked out as a precentage of income you earn inside the thresholds
You also forget a major part of tax levied on workers but not on owners - national insurance.
That doesn't include VAT (or whatever it's called in America), tariffs, excise duties though, does it? It'd be curious to see a comparison between countries that would cover all those things (like how much you earn, and how much you actually pay for some average set of goods).
# Federal
* Long Term Capital Gains Tax = 20%
* Short Term Capital Gains Tax = 37%
* Earned Income / Ordinary Income Tax = 37%
* Net Investment Income Tax = 3.8%
* Medicare Payroll Tax (W-2 Wages) = 1.45%
* Additional Medicare Tax (W-2 Wages) = 0.9%
* CA State Income Tax = 12.3%
* CA Mental Health Tax = 1%