Why are Americans giving up their citizenship?
bbc.co.uk
bbc.co.uk
US law should not have jurisdiction beyond the border. It is creating a growing amount of complications for US citizens that are not within US jurisdiction but which can be held criminally liable for not following US laws even when those laws are in conflict with local laws where they actually live. The indifference of the US government to the consequences to US citizens of their overreach is typical these days.
This misconception comes from "Monarchy by Divine Right" from Old Europe, where it was your duty before God to support your King with your earnings.
It has become more and more of an extortion as the amount seized by your rulers far exceeds (in percentage) what was paid during the Middle Ages.
The state has legitimacy granted to it by those who organize it and continue to live under its rule until such time as they decide to no longer recognize it, delegitimize its power, and establish a replacement state. But even when this occurs, another state is erected in its place.
Taxes have been around so much longer than Old Europe--by about 4000 years. Read some history.
Nice theory but it's not even like you have a remote possibility to live outside of the State. Every country require you to BELONG to a State.
You'd rather look back in History how people were actually able to survive and thrive before advanced State powers even existed. The Human Race was not born with a State and Government to direct themselves. This is all a very recent creation in History. Let's not invert the logic and pretend that without State we would have nothing. This is what Socialism wants you to believe.
The survival and thriving of the human race prior to the establishment of states is incomparable to the last 10,000 years--except to say that they evolved, survived, and propagated the species. They did not thrive.
The human race was hardly shit before it began establishing states in order to organize, centralize, protect, expand, and make its way in the world. Before that? Humans were nothing.
Ten thousand years of history does not qualify as a "recent creation in history" unless you're being really particular about establishing recent on a universal and geological time scale.
Without the creation of states, humanity had and left little to nothing behind. It merely existed. You would not be here if it weren't for the creation of the state.
This is not in any way, shape, or form what socialism would have anyone believe.
Slavery was so much more than the "coerced surrender of the fruits of one's labor". And indentured servitude is a far different thing--it was a practice to enslave someone for a set term after obligating them to a debt as a means to gain free labor.
Neither of these things are in any way analogous to paying taxes. You do history, and those who suffered under these systems, a great injury by misappropriating them for ridiculous political statements.
Calling paying legally authorized taxes coercion is abusing language to make a stupid political point. Calling tax-paying "generational theft" is the same thing.
Besides, you're missing the point of the parent statement--comparing slavery and indentured servitude to the "coerced surrender of the fruits of one's labor". That is, plainly speaking, total bullshit, and a misappropriation of slavery & indentured servitude for a stupid political point about not liking taxes.
Calling paying legally authorized taxes coercion is abusing language to make a stupid political point.
Sorry, could you point out in what way the situation I described is not coercion? Are we to suppose that it is not coercion because it has been happening for a while, to a variety of people, despite the definition of the word not mentioning this?
Calling tax-paying "generational theft" is the same thing.
Social Security will not exist in its current form when I am 65. A variety of solutions could cause it to continue to exist in some form, like killing people when they reach the age of 80 (this probably would not be legal), paying out less, setting the cutoff age to be later, or just arbitrarily denying payouts to people completely at random (this would be legal - see Flemming v. Nestor), but most of the likely solutions to the problem result in people my age paying in a great deal more than we will ever receive.
> In some cases, compliance with US tax laws (even though not in the US) are in direct conflict with laws in jurisdictions where people actually reside.
This is why countries have tax treaties, to work these issues out (though there are some bugs, see above). If you don't earn that much, the ~$95k foreign income tax exemption is also very useful.
> In essence, a US citizen is indentured to the US state regardless of where they live.
Thankfully, I'm mostly an indentured servant to the CCP and every year I get to write a big fat +/- $0 on my US tax returns. But I'm just a worker bee.
> It is creating a growing amount of complications for US citizens that are not within US jurisdiction but which can be held criminally liable for not following US laws even when those laws are in conflict with local laws where they actually live.
What are you talking about? The only law I can think of: US citizens are not allowed to participate in corruption (by US law), while some countries require bribes to avoid sending you to jail. Very few laws affect us abroad, the only other ones I can think of relate to child rape and pornagraphy.
The U.S. Embassy system offers world-class services to U.S. citizens with legal, medical, and (depending on the circumstances) financial problems in foreign countries. They will negotiate your release if you are arrested for foreign crimes. They will work with your health provider if you become gravely sick. They will help you reorder credit cards if you are robbed and even provide you with cash advances or a place to stay.
The embassy explicitly states that they do not offer these services.
> They will negotiate your release if you are arrested for foreign crimes.
Ha ha! You are joking right?
> They will help you reorder credit cards if you are robbed and even provide you with cash advances or a place to stay.
They MIGHT call home for you so you can get some cash. But otherwise, don't expect much from the US Embassy beyond expected services, unless your case is exceptional somehow (or maybe if you know Gary Locke personally).
The US does offer other services for our taxes; e.g. I got my PhD via NSF grants, basically, so I don't mind paying for that. And keeping the world safe via military (if you think that's a service), or even foreign aid. But its a myth that I pay any US taxes at all, because I don't, I just have to fill out that damn 1040 every year.
Huh?? Just because you are a US citizen, you have to pay taxes to the US wherever you live? Is any other country in the world having such policies?
It's been like that for a long time already, pretty rediculous of you ask me!
If they ever did that, I can tell you a number of French citizens living abroad would just drop their French passport without hesitation.
Just because something has the backing of a government doesn't change the definition of words.
You can argue who is the owner of the money being taxed, but you can't say something is or isn't because it's lawful.
Taxes are not theft, but a membership fee. Its perks are roads, fire department, schools, laws and law enforcement, protection from foreign armies and basically keeping the society together.
Complete highway robbery.
I do agree that the idea of taxation is not theft, but at what point does it become so? If you look at all those aspects that you point out, would you say that the taxes are well spent? The other issue here is that the people in question don't even live in the US, and thus don't make use of those services (and probably don't want their money to be used on foreign wars, as well. Just an educated guess).
In addition, about 50% of the federal budget these days is Social Security+Medicare+Medicaid. Most of the things you listed are paid from local/state taxes, which are much smaller. Two thirds of the federal budget goes to pensions, welfare and military expenses. Roads, laws and law enforcement aren't where the bulk of taxes goes.
For some words, the government defines what they mean. This includes legal terms, such as murder or rape or theft -- all or which mean what the laws (written by the government) say what they mean.
It would be lawful if I agreed to all of it. I do agree we need taxes, but in many cases, it's excessive and against my will (you can go to jail if you don't pay it).
The other problem is that there is no accountability.
I'm assuming you live in China though, since you said there is no accountability, and you can't vote out public officials whose tax policies you don't like.
/FlawedLogic.
Whenever I hear Americans complain about taxes, I play a sad song on a very tiny (invisible) violin in my hand.
One of the Facebook founders similarly renounced his U.S. citizenship prior to its IPO.
Is there a penalty just for not filing? penalties can cripple you.
I could walk into the British consulate in San Francisco tomorrow and expect help, and I haven't paid taxes in the UK for 5 years now.
I think you are under the impression US embassies are a country club that expats just go to and have a cocktail from time to time.
I get extra pain when I go on business trips to the states, which the US doesn't count as being foreign work. So every year I have to fill in a spreadsheet of all the days I worked in each country, and subtract the US days from my tax treaty credits. I have to do the same thing in reverse for the HMRC in the UK. My least favorite part of being an expat :)
[1] http://www.rumbaklaw.com/resources-and-tools/us-federal-tax-...
US Citizens are taxed on their income by the US regardless of where it was sourced and regardless of where they live. There are exclusions for foreign earned income up $97,600 in 2013 [1], but that does not exempt you from FILING the 1040 and whatever else.
In addition the US has tax treaties [2] with various countries that dictate who gets first right to tax, based on various criteria. Remember treaties trump internal law.
None of these exempt you from filing a return, even if you owe no tax to Uncle Sam.
Then there's the FBAR[3], which is actually a US FinCen form that is administered by the IRS and must be filed by June 30 of each year. It's for people who either have or maintain "signature authority" on bank accounts with a combined value of over $10,000 in the previous year.
Finally there is now FATCA [4], which imposes new reporting requirements on both US persons and Banks. If you live overseas the amount required to report is quite high, but it's still more reporting. For banks it's a royal PIA and many banks will not turn you away if you are a US Citizen (this is anecdotal, I Don't have numbers).
The problem is that the affected parties, US Citizens living abroad, have no real franchise in congress. That's because you vote in Federal Elections based on your last state of residence, which means that your Senator could care less about you.
The solution: We need about 300,000 expats to move back to Wyoming for a while. Once they decide that they no longer like Wyoming and want to move back overseas, they will vote in Federal elections in Wyoming. The expats will then have a voice in congress and be able to have some influence..
[1].http://www.irs.gov/Individuals/International-Taxpayers/Forei... [2]http://www.irs.gov/Businesses/International-Businesses/Unite... [3]http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employ...
Could care less means they care some, and theoretically could care less than they already care. Couldn't care less means they already don't care at all.
http://en.wikipedia.org/wiki/Renunciation_of_citizenship#Uni...
Yes, I would say that 0.019 percent of the passport-holding population currently living abroad (presumably biased toward the more wealthy passport holders) is a small proportion indeed. What is the comparable figure for people from other countries who renounce their citizenship each year to become naturalized United States citizens? It is surely much higher.
You are NOT entitled and you will NOT draw jack from Social Security--unless you paid in for at least 10 years. Then, that is your money.
If you move to US and are dirt poor, I suppose you may get some state aid, medicaid etc but that's a basic right to anyone that lives there. It probably balances out as many will retire, say to Mexico, and not use those services.
Or you can die while the first check is still in the mail. That's the system the Fed set up
Living abroad, there are few benefits I'm actually entitled to. In some third world nations, if I'm arrested, then I could receive help at the embassy's expense. But I live in a first world country. I receive zero benefits from the US government. I can't think of a single service the US government provides me. In fact, they hold a monopoly on many of the services I need. If I simply want to notarize a form, I have to get to a consulate and then pay $50 (something I get for free in the US). And yet I have to file taxes and sometimes PAY taxes.
And here's an even worse bit: I get exempted from paying on the first ~$90k of foreign earned income, great. But in order to get that benefit, I'm not allowed to spend more than 30 days in any year in the US. That just means I'm not going to visit my home country at all, because if I visit family for 29 days, and later in the year I need to come back home for a funeral or other emergency, well, that would be a trip that could cost upwards of $20k in US taxes.
Still, it begs the question if citizens have some obligation to pay some minimum level of taxes, albeit small, for the basic services and protections one would still expect as a citizen: the right to vote, the salaries of your representatives, courts and foreign service, etc.
I think the world should be shelling DC, I mean, forget Iran and Syria, right?
Once USA extort money going from country A to country B for failing to comply, it's no longer a diplomatic issue, that's an international crime. And it was from the day one - USA threatening financial institutions in other countries, giving orders to them directly, that's audaceous.
The only thing I can think of is that maybe people are avoiding taxes in the US and their adopted country as well. After all, many countries Americans move to have such high tax rates that after deductions, their US tax liability would be quite small.
PS - The answers to all of these questions is contained within the article.
FTA:
"Fatca provisions impose no new obligations on US citizens living abroad... US taxpayers, including US citizens living abroad, are required to comply with US tax laws," he says.
No, this sounds more like people who might have fudged some numbers now worrying that the IRS is going to find out and realizing that their citizenship isn't worth the yearly bill.
I take exception to your characterization of "fudging numbers". We all fudge the numbers of our tax returns, even when filing in the US. How many people really do anything but use TurboTax and hope for the best? I know I do. I can't possibly know everything about US tax law. I hope TurboTax does, but I have no guarantee, and it's my ass on the line if it screws up. I see no difference between that and the expats mentioned in the article, except the help they have to buy in is far more expensive.
I don't see any mention of tax-dodging in the paragraph above. Which part of paying $2000 (and maybe soon $5000) to file taxes, and banks turning away American customers, don't you understand?
The non resident citizen tax returns can become very complicated in the situation where the non resident US citizen is married to a non resident foreigner. The tax forms don't even support this configuration - the spouse must have a social security number. The foreign spouse must then apply for a special "non resident alien" social security number, for the special purpose of being able to file taxes in a country they are not even allowed to enter without a visa.
And how exactly do you determine the value of your shared assets in dollars? Have you made capital gain every time the dollar fluctuates against the local currency? Since we bought our home, our property has dropped significantly in value in the currency we earn our wages in, but theoretically gained a bit in dollars, so how can we be sure this doesn't add up to exceed $50,000? The only way to be sure is to hire an expert figure it out for you, for several thousand $. They are now charging more for their services because of the higher risks and responsibilities involved.
The net amount we have to pay in that country one of us isn't allowed to enter without a visa has always added up to $0 because the extremely high taxes we already pay locally (50+ percent income tax, 20+ percent sales tax, 80+ percent excise tax on fuel etc) can be deducted.
Yeah, just open a secret Swiss account, who will know.