Why Americans don't wanna be Americans anymore?Record number of renounced citizenship

[justoh]

Treaties = reduced income taxation or even exemption. Laws are fun!

Depends mostly on how much you earn and on your local tax rate. While most places are higher than the US (at least in europe), some countries have very low taxes, and it's always possible to earn more than you are allowed to exclude. Don't know what your point is. Many people do have to pay double taxes. Stating that some people don't because they might have a high tax rate or can claim exemptions doesn't change this fact, nor does it answer the question of why this is the case.

 

[nickqt]

Libs always like to point out the that the US is one of the only civilized countries not to offer universal healthcare, as if by definition that means we're doing something wrong. Well, the US is essentially the only country on earth that taxes it's citizens on income earned elsewhere when they don't reside in the US. That in itself should be sufficient reason to question the policy.

It's almost like you don't actually know the law that you're complaining about.

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

There are plenty of treaties between the US and other countries that reduce and even exempt people from "double taxation".

But, since we're just generalizing and demonizing "others", I'll just end with the blanket statement that:

Cons always like to complain and express outrage about things that they don't actually have any understanding of.

 

[Genx87]

If you are a US citizen, you have all of the rights and privileges of a US citizen. This includes SS, Medicare, Medicaid, and a multitude of other rights, privileges, and protections that a non-US citizen doesn't have.

That is why I think a US citizen should have to pay US income taxes, regardless of what chunk of land they are living on while earning their income.

I have rights and privileges, and I pay taxes. Another US citizen living on a different chunk of land has those exact same rights and privileges, so yes, they too should pay income taxes, just like me. If they don't want those rights and privileges anymore, then they can renounce their citizenship.

And here is the official IRS site for income tax treaties. Again, just because you're an expatriate doesn't mean you pay "double taxation".

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

Treaties = reduced income taxation or even exemption. Laws are fun!

I know. Law, nuance and reality isn't as good at eliciting as much visceral rage from the rabble as making blanket statements, but there it is.

Also: because it's the law. I think that makes it 426 times now that I've said that.

Medicaid is on the state level. I would be awfully surprised if Medicaid went beyond the borders of the state. Medicare does not cover people outside our borders. Except in some cases in Mexico or Canada. SS requires a citizen hold a job for 10 years to qualify for benefits. And supplemental insurance is not given to people living outside our borders.

What other protections are you talking about? US citizens living abroad are subject to the laws of the host country. The state department may lobby for them but they hold no power to help a citizen being tried in a court within a foreign country.

 

[nickqt]

Medicaid is on the state level. I would be awfully surprised if Medicaid went beyond the borders of the state. Medicare does not cover people outside our borders. Except in some cases in Mexico or Canada. SS requires a citizen hold a job for 10 years to qualify for benefits. And supplemental insurance is not given to people living outside our borders.

What other protections are you talking about? US citizens living abroad are subject to the laws of the host country. The state department may lobby for them but they hold no power to help a citizen being tried in a court within a foreign country.

Medicaid and Medicare is paid out at the state level. Much of the funds come from the Federal Government.

SS still applies to expatriates, whether they live within the US or don't.

And a US citizen, unlike every person on the planet, has a right to return to the US and live within its borders.

Not to mention that any country on this list has specific treaties that reduce or eliminate any notion of "double taxation".

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

 

[Genx87]

Medicaid and Medicare is paid out at the state level. Much of the funds come from the Federal Government.

SS still applies to expatriates, whether they live within the US or don't.

And a US citizen, unlike every person on the planet, has a right to return to the US and live within its borders.

Not to mention that any country on this list has specific treaties that reduce or eliminate any notion of "double taxation".

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

I have already gone beyond the double taxation. You act like if they arent double taxed there is nothing wrong with taxing them on foreign generated income.

SS applies to expats that have paid into the system for 10 years. The guy in London? He didnt pay in for ten years, he isnt eligible for SS. He also wont qualify for Medicaid nor Medicare due to his residency. He is also subject to the laws of the UK. So what privleges and benefits do these people receive for paying income and capital gains to the US govt on foreign earned income?

Guess what, moving back to the US would then require them to pay US taxes when living here. Holy crap, what a concept. Paying for something you actually use and benefit from.

 

[justoh]

My favorite part about renouncing citizenship is how the govt requires you pay a fee to do it now. I think they also want to raise it and tax any wealth you bring with you. Cant even leave the land of the free for free.

Yeah, there's an exit tax, apparently.

http://renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/

As an example, let’s say that the value of all your assets the day before your expatriation is $3,000,000. You calculate that your basis, or the price you paid for those assets, is $1,000,000. So your net gain, or paper profit, from the “deemed sale” is $2,000,000. You’re allowed to exclude $627,000 (as of 2010) of that, so the amount subject to tax will be $1,373,000.

The actual tax you have to pay is whatever tax would apply if you actually had sold the assets the day before expatriation. So depending on your assets, it might be some combination of short-term gains, long-term gains, etc, and would be taxed accordingly.

Again, although you don’t actually sell anything, it’s all taxed for IRS purposes exactly as if you actually had sold it all.

Couldn't that cause problems? Couldn't it be difficult to pay this if they're tied up somehow?

 

[Hayabusa Rider]

I specifically embraced that exact phrase because I heard and read it thousands of times in the aughts, as an Amurica-hating libruul

I've heard that too, but unfortunately some (not saying you) embrace the same philosophy of conform or be cast out. For me the issue of diminishing rights is more an issue. At least some nations seem to be more accountable for domestic spying etc. Unfortunately I'm tied to this nation now and other places are far more picky about who they take. If I were wealthy many places would take US citizens who would not otherwise.

 

[DCal430]

Depends mostly on how much you earn and on your local tax rate. While most places are higher than the US (at least in europe), some countries have very low taxes, and it's always possible to earn more than you are allowed to exclude. Don't know what your point is. Many people do have to pay double taxes. Stating that some people don't because they might have a high tax rate or can claim exemptions doesn't change this fact, nor does it answer the question of why this is the case.

You are wrong, no one pays double taxes. The foreign tax credit prevents this. Each dollar you pay to a foreign government you can take 1 dollar off what you owe the U.S government. You will never pay more in total than if you had lived in the U.S, and was only taxed by the U.S. This is for ALL foreign countries even those without a tax treaty.

 

[DCal430]

I have already gone beyond the double taxation. You act like if they arent double taxed there is nothing wrong with taxing them on foreign generated income.

SS applies to expats that have paid into the system for 10 years. The guy in London? He didnt pay in for ten years, he isnt eligible for SS. He also wont qualify for Medicaid nor Medicare due to his residency. He is also subject to the laws of the UK. So what privleges and benefits do these people receive for paying income and capital gains to the US govt on foreign earned income?

Guess what, moving back to the US would then require them to pay US taxes when living here. Holy crap, what a concept. Paying for something you actually use and benefit from.

You are wrong there is no double taxation, because all taxes paid are always credited against what you owe.

 

[DCal430]

Medicaid and Medicare is paid out at the state level. Much of the funds come from the Federal Government.

SS still applies to expatriates, whether they live within the US or don't.

And a US citizen, unlike every person on the planet, has a right to return to the US and live within its borders.

Not to mention that any country on this list has specific treaties that reduce or eliminate any notion of "double taxation".

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

It isn't just countries on that list that eliminate double taxation, it is all countries. The foreign tax credit applies to all countries and eliminates dollar for dollar what you owe to the U.S government. You will never pay more than if you lived in the U.S, because the total tax you pay to the foreign + U.S can't be higher than what you owe the U.S.

 

[DCal430]

If you move to a place with a lower income tax or no income tax, paying the difference to the U.S government isn't double taxation, it is just making up the difference taxation.

 

[Jhhnn]

Meanwhile, the US gained nearly 780,000 citizens in 2013-

http://www.dhs.gov/sites/default/files/publications/ois_natz_fr_2013.pdf

This whole snit is just another manifestation of trumped up right wing persecution fantasies.

Citizenship based tax dodging has always been a ploy for the demi-riche. In Europe, sports stars want to become citizens of Monaco. In the US, businessmen want to become citizens of Bermuda. OTOH, Rupert Murdoch became a US citizen in 1985 so he could advance his media empire in the US & never looked back. Go figure.

The whole persecution of the Rich song & dance is utterly dishonest astroturfing.

 

[justoh]

You are wrong, no one pays double taxes. The foreign tax credit prevents this. Each dollar you pay to a foreign government you can take 1 dollar off what you owe the U.S government. You will never pay more in total than if you had lived in the U.S, and was only taxed by the U.S. This is for ALL foreign countries even those without a tax treaty.

I'm no expert on the issue, but then what would be the meaning of the exclusion limit of ~95k? Just a starting point? What if you earn 200k? And to the bolded sentence, what if the taxes where you live are significantly lower than what would be taxed if earned in the US? You stated that you will never pay more than if you had lived in the US, but you aren't living in the US. Will you not have to pay more than if you weren't a us citizen, just paying the local, low taxes, and isn't that a problem?

So say you earn 200k. you can exclude 95k or whatever, and some other shit as well, but wouldn't the remainder be taxable, and couldn't you end up paying us taxes if the amount on that remainder is taxed less in the foreign jurisdiction than the us? So you would still be paying us taxes beyond this amount? So still paying us taxes as well as local? But i guess technically not "double," but you're still in a worse situation than you would be if you were any other foreigner.

edit: guess you sort of answered this already in your subsequent post. Fine, maybe wrong to call it double taxation, but it's still tax liability imposed by no other industrialized nation.

 

[DCal430]

I'm no expert on the issue, but then what would be the meaning of the exclusion limit of ~95k on this tax credit? Just a starting point? What if you earn 200k? And to the bolded sentence, what if the taxes where you live are significantly lower than what would be taxed if earned in the US? You stated that you will never pay more than if you had lived in the US, but you aren't living in the US. Will you not have to pay more than if you weren't a us citizen, just paying the local, low taxes, and isn't that a problem?

So say you earn 200k. you can exclude 95k or whatever, and some other shit as well, but wouldn't the remainder be taxable, and couldn't you end up paying us taxes if the amount on that remainder is taxed less in the foreign jurisdiction than the us? So you would still be paying us taxes beyond this amount? So still paying us taxes as well as local? But i guess technically not "double."

The foreign income exclusion limit has nothing to do with the foreign tax credit, which has no limit. If you make 200K and paid 30,000 i taxes to the foreign country, and your U.S income tax owed is 35,000 then you only have to pay $5,000. This isn't double taxation, because the 5,000 is just making up the difference.

 

[DCal430]

There is the foreign income exclusion, the foreign income tax deduction, and the foreign income tax credit. They are all different things. The credit has no limit and is dollar for dollar.

 

[justoh]

The foreign income exclusion limit has nothing to do with the foreign tax credit, which has no limit. If you make 200K and paid 30,000 i taxes to the foreign country, and your U.S income tax owed is 35,000 then you only have to pay $5,000. This isn't double taxation, because the 5,000 is just making up the difference.

Alright. Make's sense. Thanks for clarifying. What's your opinion on this making up the difference thing, though? Seem fair? Why do you think nobody else does it? If i earned 150k (which I certainly don't), i'd be paying 11% tax locally and like 28% to the us federal government. That's quite a lot of difference to make up. And for what? If i lived in another region of this same country i'd be paying 5%, making the difference quite insane.

 

[DCal430]

Though I think the credit may be limited to earned income, unearned income such as interest is counted as 50% income, so 1 dollar of taxes paid on unearned income counts as 50 cents of credit. So there can be minor double taxation on unearned income.

Only the rich are affected by large unearned income.

 

[Subyman]

Hold on everybody, we are talking about 3k people out of 300M renounced their citizenship yet over 2M came here in the same year. 670x more people came here than left. Or 1/100,000 left. Not even worth talking about.

 

[TheSlamma]

Not just people are leaving America. Large companies are also favoring places with more favorable costs for their HQs.

Interesting though they all seem to gravitate moving their companies to countries that have no human rights.

Repubs can blame "taxes" all they want.. what they actually want is their Button Sewers back is all.. plain and simple.

 

[Jhhnn]

Hold on everybody, we are talking about 3k people out of 300M renounced their citizenship yet over 2M came here in the same year. 670x more people came here than left. Or 1/100,000 left. Not even worth talking about.

But, but, the Rich! The merciless persecution of the Rich! It's like the invasion of Poland!

It's the Holocaust all over again! The Russian Revolution! The end of the fucking world as Rich people know it!

http://dealbook.nytimes.com/2010/08/16/schwarzmans-unfortunate-war-analogy/?_r=0

 

[oobydoobydoo]

You basically have to be an idiot to "renounce" your American citizenship... or really any kind of citizenship. It's worth keeping if only for the protection it offers you in any US embassy anywhere on earth. What do these people get in return for giving up all the protections offered by US citizenship?

 

[justoh]

Hold on everybody, we are talking about 3k people out of 300M renounced their citizenship yet over 2M came here in the same year. 670x more people came here than left. Or 1/100,000 left. Not even worth talking about.

It seems to be about why people are renouncing their citizenship, not about how many.

And these people have already "left." There are apparently 6.2 million americans living abroad, and the issue is why are an increasing number of them renouncing their US citizenships, instead of retaining them, and it seems to be because of taxes. Do these taxes make sense, etc...

The issue isn't whether or not the us is running out of people. The inducement to renounce also affects all of those 6.2m people and not just those who have renounced, and this inducement (taxes) could be judged to be either fair or unfair, or sensible or not, without there needing to be some kind of mass exodus, and whether or not it affects us personally.

 

[dainthomas]

Depends mostly on how much you earn and on your local tax rate. While most places are higher than the US (at least in europe), some countries have very low taxes, and it's always possible to earn more than you are allowed to exclude. Don't know what your point is. Many people do have to pay double taxes. Stating that some people don't because they might have a high tax rate or can claim exemptions doesn't change this fact, nor does it answer the question of why this is the case.

My question is why should I care if someone renounces? It's not like the United States will run out of citizens.

 

[justoh]

My question is why should I care if someone renounces? It's not like the United States will run out of citizens.

Well one would naturally care a lot less about the 6.2m Americans living abroad who have to pay US taxes or at least file us tax returns for the rest of their lives if they aren't one of them. Perfectly understandable. White people also care less about racism, men less about sexism, the wealthy less about poverty etc. I'm not equating unfair or at least unusual tax burdens to sexism or racism, and only mention them to illustrate how we care less about things that affect us less personally.

So, I don't know. Empathy?

 

[nickbits]

I'd renounce my Canadian citizenship if I had to file taxes every year even if I owed $0. Not worth the hassle. I'm sure many USCs are in that boat. A lot can't/worn't do their own taxes so they have to spend a few hundred every year for someone to do their taxes for them.