US Expats Becoming "Toxic Citizens"

[Mulboyne]

[sublight]

Yeah, it's definitely an attractive-looking option.

[Mike Oxlong]

Careful, next thing you'll be telling me Debito is avant-garde!

[TennoChinko]

Careful, next thing you'll be telling me Debito is avant-garde!

Nope. He's still a big fat annoyance.

I hear his ex-wife is coming out with a new book titled "My Dork Ex-husband is a Wapanese"

[Christoff]

What this article fails to mention is your taxes are offset by the amount of federal tax you pay in the country you reside.

[FG Lurker]

What this article fails to mention is your taxes are offset by the amount of federal tax you pay in the country you reside.

Only if the US has a tax treaty with the country you reside in. Also, if you are lucky enough to be living in a low tax (or no tax!) locale then it would really hurt to still be getting ass raped by Uncle Sam.

[IkemenTommy]

Careful, next thing you'll be telling me Debito is avant-garde!

He isn't avant-garde.. he is just plain idiotic.

[Christoff]

Only if the US has a tax treaty with the country you reside in. Also, if you are lucky enough to be living in a low tax (or no tax!) locale then it would really hurt to still be getting ass raped by Uncle Sam.

When I lived in HK, there was a 10% base tax that I was able to subtract form my fed irs tax.

[Samurai_Jerk]

It wouldn't be an easy choice but I would seriously consider dumping my citizenship if I ended up in a situation where being American became too much of a tax burden. I've noticed that everything is getting harder and harder to deal with living abroad despite the technological advancements that are supposed to make things easier.

By the way, I read somewhere once that even if you give up US citizenship you still have to file with the IRS for 10 years. Does anyone know if that's true?

That requirement of having a US address reallys gets annoying too. My dad tends to move every few years because of work so I have all of these addresses on my credit record that I've never actually lived at. Why that matters is when I want to rent a house in the US they do credit checks and start asking about all these adresses that you didn't inlcude on your application where you're supposed to list every address you've resided at for that past X number of years. Not a big deal, but just one more fucking annoyance to deal with.

[Samurai_Jerk]

FYI, according to this: http://www.amcham.org.hk/position_papers/taxation-of-americans.pdf

To the best of our knowledge, the only countries in the world that tax the foreign earned income of their citizens living and working abroad are Eritrea, North Korea, the Philippines, Vietnam and the United States.

We're in good company! Makes me proud to be 'Mercan.

[Yokohammer]

FYI, according to this: http://www.amcham.org.hk/position_papers/taxation-of-americans.pdf

To the best of our knowledge, the only countries in the world that tax the foreign earned income of their citizens living and working abroad are Eritrea, North Korea, the Philippines, Vietnam and the United States.

We're in good company! Makes me proud to be 'Mercan.

The United States of America: Neck and neck with the Third World.

[Samurai_Jerk]

The United States of America: Neck and neck with the Third World.

I think we're also one of only three countries that officially sentences minors to death (the others being Iran and Sudan).

USA! USA! USA!

[FG Lurker]

It wouldn't be an easy choice but I would seriously consider dumping my citizenship if I ended up in a situation where being American became too much of a tax burden. [...]

By the way, I read somewhere once that even if you give up US citizenship you still have to file with the IRS for 10 years. Does anyone know if that's true?

My understanding (and I'm not American...) is that if the IRS feels you renounced your citizenship to avoid US taxes that they will come after you for tax on your income for 10 years after you renounce. Therefore it's generally a good idea to avoid making statements about maybe renouncing your citizenship due to a heavy tax burden.

[Ketou]

I don't see how the IRS could come after any who has changed their citizenship. Even if the it is for the years when one was a US citizen the only way they could touch you was if you agreed to it.
Although considering how the almost all law, criminal or otherwise, is contract law they don't seem to have too much trouble tricking people into contracting.
I would suggest that the personal renouncing citizenship makes sure to take back ownership of their legal fiction as even if they change countries their fiction is still owned by its creator..the State they were born in.

[FG Lurker]

I don't see how the IRS could come after any who has changed their citizenship. Even if the it is for the years when one was a US citizen the only way they could touch you was if you agreed to it.

Well, it depends on how serious you are about separating yourself from the US. If you have any investments or assets in the US the IRS can seize them. If you visit the US you can be arrested. Fair? Heh, this is the IRS.

[Samurai_Jerk]

Well, it depends on how serious you are about separating yourself from the US. If you have any investments or assets in the US the IRS can seize them. If you visit the US you can be arrested. Fair? Heh, this is the IRS.

Exactly. Not paying those bullshit taxes could mean never visiting your family again, not being able to make business trips, having any assets in a US insitution seized, etc. Pretty fucked.

[Ketou]

Well, it depends on how serious you are about separating yourself from the US. If you have any investments or assets in the US the IRS can seize them. If you visit the US you can be arrested. Fair? Heh, this is the IRS.

The whole system is far from fair..it's an outright plunder. It this same shit that makes wonder about ever going back to Australia. Magistrates jailing people for trying to exert their common laws rights, High Court judges admitting decisions are made on the stability of the present system above the point of law. The place is a dictatorship and the USA is not far behind.

[nottu]

[omae mona]

[nottu]

[FG Lurker]

I am so glad that I am not a US citizen.

[AruOjisan]

Interesting discussion, although there is a slight silver lining for more adventurous FGs. I actually pulled in a fat, 5-figure return this year as a result.

Note the ability for one to offset $90k on any of their foreign earned income. Creative accounting allows you to report negative income (i.e., a loss) for any years in which your officially reported/taxed income is less than that amount.

So, for instance, if you officially earn $50k overseas but have a cash/consulting gig that pays [s]you[/s] your company another $50k, you report only your actual income, which on balance winds up being -$40k.

In this case, you'd pay $0 in US taxes but most importantly you'd have -$40k in losses to carry-forward into your next tax year. This can be done indefinitely, as the carry-forward losses essentially roll over into the next tax year. Using this method, you'll be able to essentially offset any income you are forced to report. This, of course, is assuming you're able to go a few years earning substantially less than $90k.

Now, this strategy is clearly "tax avoidance", which in US jurisprudence is supposedly NOT illegal. However, as others have already pointed out, the IRS has been increasingly using their discretion to extort more & more money from US citizens. That having been said, this is definitely a strategy that will put them on your radar. As such, be sure to document EVERYTHING (that supports your claims).

Cheers,

[Cyka UchuuJin]

FYI, according to this: http://www.amcham.org.hk/position_papers/taxation-of-americans.pdf



We're in good company! Makes me proud to be 'Mercan.

danes are also taxed on worldwide income, but is also offset by the amount of taxes they pay to other countries. you also can't buy summerhouse property in denmark if you're a foreigner.

it's all a 'grass is always greener' type of thing.

what i'm curious about is these people who renounce citizenship, what country do they become citizens of? i hold two passports, a red and a blue one. in 3 years, i have to give up one of them. while i have no intention of ever making the blue one home, it does let me travel a hell of a lot easier than the red one. so why are these expats so intent on giving up citizenship just because america doesn't want to let you keep a bank account there? why would you want one there anyway with the dollar so weak?

[Christoff]

danes are also taxed on worldwide income, but is also offset by the amount of taxes they pay to other countries. you also can't buy summerhouse property in denmark if you're a foreigner.

it's all a 'grass is always greener' type of thing.

what i'm curious about is these people who renounce citizenship, what country do they become citizens of? i hold two passports, a red and a blue one. in 3 years, i have to give up one of them. while i have no intention of ever making the blue one home, it does let me travel a hell of a lot easier than the red one. so why are these expats so intent on giving up citizenship just because america doesn't want to let you keep a bank account there? why would you want one there anyway with the dollar so weak?

In HK US taxes are offset by the 10% flat tax you pay in HK

[Cyka UchuuJin]

In HK US taxes are offset by the 10% flat tax you pay in HK

i think there's more of a story than we're actually hearing here. unless you're a millionaire, it's always been easy to pay little or no tax to america by using other deductions above the 91K USD (housing, school fees, etc). having an american passport does still allow you to travel a hell of a lot more places visa free than just about any other country, so i just can't see the reason for renouncing it unless you're marrying someone and a kid issue becomes complicated.

anyone else got a good reason why to renounce?

[nottu]

[Catoneinutica]

I have not renounced my citizenship ......... yet
But I think this will become an issue for the US in the future. My posts were made to make "US persons" aware of what is going on. Ironically, this whole short-sighted play by the US gov't may come back to haunt it if "US persons" start to expatriate in great numbers. So to answer your question, the writing on the wall is the US gov't needs money and they are going to confiscate it through taxation from anyone who has it for years to come, if possible. It is very likely that a great number of baby boomers will not be able to stop working and live in the US when they get older. For many of them, life south of the border may be attractive.

I'd like to expression my thanks to nottu for his excellent, detailed posts. I, too, am pretty sick of having to pay not only Japanese taxes but also taxes to Big Daddy to support the Bush-Obama War Machine.

Re Cyka's question about what countries US refugees choose once they renounce their citizenship...well, there have always been tax havens, and there have always been tax exiles. It depends on the kind of climate you like. Panamanian passports are popular; so is Austria, if you can afford it. And of course Switzerland, Monaco, Costa Rica, et al are perennials.

[nottu]

[Kuang_Grade]

I have not renounced my citizenship ......... yet
But I think this will become an issue for the US in the future. My posts were made to make "US persons" aware of what is going on. Ironically, this whole short-sighted play by the US gov't may come back to haunt it if "US persons" start to expatriate in great numbers. So to answer your question, the writing on the wall is the US gov't needs money and they are going to confiscate it through taxation from anyone who has it for years to come, if possible. It is very likely that a great number of baby boomers will not be able to stop working and live in the US when they get older. For many of them, life south of the border may be attractive.

Ah, the self centered boomer, where would the US be without them?...How will the republic survive without their greed and self interest to guide the US into irreproachable position the US has ended up over the last 30 years? Or their peerless personal financial management over their lifetimes that has left them, what, on average of $50K or less saved for their retirements?

And after all, I understand Juarez, is lovely this time of the year as well. I'm not sure how the US can compete against that in the global battle for talent.

And I'm sure that at some stage in the future, congress will be more than happy to pass a law to make sure any social security payments for non-citizens not living in the US has to be picked up in person in some asscrack town in Montana, purely as fraud prevention effort, of course.

I'm sure you are still quite sore about how no one from the Madoff affair went to jail due to the international conspiracy against you but we'll get along quite well without you Nottu, so don't worry. Somehow, we'll just have to make due with millions of younger people (with their numerous years of tax paying income ahead of them vs the more parasitic boomer population) around the world that would pretty much do anything for a US green card.

Don't let the door hit you in the ass on the way out.

[nottu]