Hacker News new | past | comments | ask | show | jobs | submit login
Why I gave up my US passport (bbc.co.uk)
75 points by nekojima on Oct 1, 2013 | hide | past | favorite | 100 comments



I grew up loving the philosophy and values I learned about America -- Jefferson, Adams, Thoreau, King, Edison, Feynman, ... welcoming Einstein and so many others. Young as the country and its culture is, we've produced some greats.

As I've matured and times have changed it's been impossible to miss other parts of America grade schools don't teach -- increasing division between rich and poor, decreasing social mobility, corporate control of the government, entrenched racism, sexism, jingoism, needless wars based on lies, ... I could go on. Anyone could.

I haven't lost faith in my country -- such vague words could mean so much in this context -- but I don't like how the powerful are influencing the processes that led to it flourishing so long, even taking into account its colossal mistakes (Prohibition?), nor how those without power aren't taking responsibility to gain power like they (we) could. I'm impressed with the love many foreigners have for much of our freedom, which I share.

I tell myself living in Manhattan is like living outside any country. Legally New York City may be part of the United States, but culturally it's its own world.

Still, I find it valuable to look at where you live sometimes with rose-colored glasses because life feels better when you love your home, but regularly to evaluate it warts and all. How else can you change it if you feel you can, or escape before the need becomes desperate, should the need arise?

(Here is where people often ask where it's better or point out places it's worse. I don't argue against asking those questions, but we don't have to jump to comparisons with others, which distracts from evaluating it from what it could be. Or once professed or aspired to be.)


Don't you think that the division between rich and poor has historically been worse than it is today? I can't imagine that the early[edit] 1900's, characterized by horrendous labor practices that ultimately brought on the labor movement, were of a society with a more narrow division of rich and poor than of today. I have unsuccessfully looked for a reference to compare today's middle class to those of the early 1900s. Please share if you know of any.


Usually when people talk about the growing income gap they're not looking back as far as the early 1900s. Like here:

http://www.motherjones.com/politics/2011/02/income-inequalit...

If you want to look further back, you can probably find the data somewhere here:

http://research.stlouisfed.org/fred2/



It is hard to fathom the complexities you face when overseas as a US citizen due to the US tax code, which is basically the only code of a major developed country to tax its citizens wherever they may live worldwide, regardless of their source of income.

There is a system of tax exemptions and credits within the code to offset the double taxation this would imply when living in a jurisdiction which imposes its own income taxes, as most countries in fact do. The difficulties arise in reconciling the US tax liabilities with those owed to the foreign country, calculating the applicable credits, etc. In practice this requires expensive tax professionals in most cases - and they get really expensive if you're an entrepreneur with an overseas corporation, which is pretty much a nightmare to deal with on several levels - different accounting standards, controlled foreign corporation tax reporting, paying estimated taxes when having no clue what the result of a complex tax calculation process will be, etc.

Besides income taxes, there are also bank account reporting requirements (TDF 90-22.1 form) which have made many people's lives difficult. The penalties for not reporting any foreign bank account are draconian even if you live overseas and need an account where you live (you will). Even worse, foreign banks are reluctant to deal with US citizens because of the reporting they in turn are required to do on their behalf, resulting in frequent difficulties opening and maintaining bank accounts overseas if you are a US citizen.

Finally, as a US citizen overseas you are still entitled to social security payments from the US government, but get no benefit from your contributions to Medicare, which only covers you within the USA proper. For that matter you also get no benefit from most of the residual income taxes you pay to the USA that you can't offset with tax exemptions/credits. It's not like those taxes will be used for any of the infrastructure etc. you use overseas.


Last year I was a contract worker for a US company while living in Japan. In addition, I had some side income earned, and all this was taxed as a Sole Proprietor in Japan. The paperwork was about 5 pages worth of just filling in boxes with the numbers from my books.

My situation was pretty complicated on the US side, so I enlisted the help of a professional to get everything kosher on my US return. I have never seen such a complex tax return in my life. In the end, it was 40 pages long, and that is not including the FATCA I did seperately. And all that just to show that I owe $0 for US taxes.

However, we are considering moving back to the US, if even for just a year, so I keep my US citizenship for now.


I haven't renounced yet, but it's so very tempting. The arrogance of the US's dual-taxation bullshit is enough of a reason to consider it.


Be honest: it's not really about your perception of arrogance in a tax policy. It's really about the money. You think you are entitled to the privileges of US citizenship but somehow exempt from its legal obligations.


What benefit from paying income taxes, exactly? You're not living there, so you don't benefit from any of the social services that income tax funds.

Just about every other country I can think of does not tax citizens abroad who do not earn money on their native soil. What makes you think the US system is right and all the others are wrong?


It's a pretty flimsy metaphor, but just because I go on long trips and stay in hotels, doesn't mean I'm not obligated to pay rent on my apartment back home. My status as tenant is recognized through my contribution of my monthly rent. Without it, I have no standing. My decision to live elsewhere, either in the short term or longer, means I either have to deal with paying double housing or give up my apartment.


Of course it's a flimsy metaphor. How do you make the choice to liken a country to an apartment with a long-term lease instead of a hotel that charges by the day or a club where you pay dues and can suspend your membership and due payment for a while?

If the US were an apartment, it would be a very strange apartment with numerous people entering and exiting it everyday.


So it's like prison. Got it. Very American.


It's a very leaky metaphor indeed... do not the millions of US citizens who neither earn income nor owe any tax receive far more benefits than the citizen abroad? Why should the working migrant be forced to foot the bill for a room for other people to inhabit?


Most countries will, if you declare that you are closing up shop and living in anther another country for more than a year, allow you to cease all involvement with that country (including tax, levies, welfare), and then welcome you back as a citizen when you decide to come home. It's just too complicated otherwise.


and yet you do not want to give up your citizenship, so clearly you feel you are benefiting from some of the social benefits that your income tax funds.


My sole benefit is that my parents have not died, and I don’t want some hopped-up border bureaucrat to be able to tell me that I can’t visit them (or my brother) for five years because his coffee was too hot.

Remember how much arbitrary and non-appealable power U.S. border guards have over visitors.

I get nothing else from my U.S. passport, because the only country I use that passport for is…the U.S.


I'm not an American citizen, so please go ahead and take my perceived American citizenship away - I'm happy to give it up.

I hold dual citizenship but would expect not to pay taxes in nation B when I live and work in nation A. If I were to start working in B and stop working in A, I'd expect to pay tax in B as per B's tax laws, and cease paying taxes in A. If I earn an income in both, I expect to pay taxes on the portion of income in each nation, as per the tax laws of each nation.

Similarly, because I live and work in A, I do not get the social services that B offers - for example, if I were to become unemployed, I'd expect to only utilise nation A's unemployment benefits. If I fall ill, I don't expect to be able to (and cannot) pin the cost on nation B's national healthcare services.

The reason I don't choose to give up my dual citizenship is that I enjoy the ease-of-access to both nations, if and when I choose to move between them. That access does not cost the nation anything to retain.


Maybe the reason to not give up citizenship is simply "The option to go back to being a US resident-citizen and enjoy all other benefits". I can't see why this benefit needs any funding.


Which "social benefits" are you talking about? The ability to go home and visit my family? The ability to return to my place of birth to live and work should I so desire? The net cost to the rest of the country for these things is zero. Nil. Nada. But, somehow, these are now "social benefits" that must be supported by a tithe and not, you know, human rights?

Why does the US effectively charge a membership fee for the kinds of basic privileges every other country simply offers for free? As I said in my original post, it's unbelievably arrogant.


People probably hesitate because it'd be such a pain in the butt to get the citizenship back.


Like not having to deal with border officers on a power-trip at the airport!


Which "privileges"? The ability to say I'm American? Tell me how that's worth it. Tell me how it's fair that I should be criminally liable to report my income and bank balances every fucking year to a country I neither live in nor draw a paycheck from.

You'll be unable to come up with a reasonable explanation for this, but feel free to insult me again by ascribing my desire to live elsewhere unmolested to a sense of 'entitlement' or some other garbage.


Obviously you are incorrect, the GP is claiming that the tax burden costs more than the worth of any privileges he's getting. I bet it's more a problem of choosing where to go permanently that isn't equally awful in a different way. Your assertion is ridiculous, as if everyone thinking about it who doesn't immediately renounce is getting fat off "entitlements" and is loving it.


What I'd be more interested in is if there is harassment for doing so. My daughter is an American citizen unfortunately (happenstance of birth), but won't be living in the US for any foreseeable reason. She'll be burdened with tax and reporting issues all her life if she doesn't renounce. But if she does renounce, will they hassle her when visiting family? What about if she does do some temporary work in the US, will they deny visas?


At the moment the U.S. government is remarkably sane about this. People who renounce citizenship can re-enter the USA on tourist visas, get work visas (like an L-1), etc. They can even get green cards and re-acquire citizenship.

"Sane" will continue until we have a critical mass of people like Senator Schumer in the Senate.

Disclaimer: I am a lawyer. And I do lots and lots of expatriation cases.


But not if you explicitly renounce to avoid taxes, there's a checkbox for that in amongst the "have you ever committed acts of terror?" questions.


That checkbox is a legacy of the pre-2008 laws, which had different tax treatments depending on your motivation for renouncing citizenship.

Under the current laws, intent is irrelevant. If you meet certain criteria (net worth above $2 million, for most people) you pay tax. Our friends in Congress want to define people as meeting these criteria as having evil tax-avoidance motives. It ain't so, at the moment.

And of course NO ONE ever tells the Embassy official that the primary motive for renouncing citizenship is tax-driven. :-)

Seriously, though. I would say that at least half of the people I work with end up living in high income tax countries (Canada, various countries in Europe, Australia, New Zealand). They aren't leaving to cut their income tax bills. The tax-drive motivations are primarily (1) the craptastic paperwork and horrific penalties that Americans abroad face, and (2) the estate tax.


Happen-stance of birth? What are the rules there about citizenship by birth? In the UK one of your parents has to be a citizen, or have been "legally settled" (allowed to stay indefinitely).


Amazingly, if a Canadian mother is transferred to an American hospital, the baby is an US citizen and the same goes if it's an American transferred to a Canadian hospital.

Interesting to learn

http://en.wikipedia.org/wiki/Birthright_citizenship_in_the_U...


With the exception of children of foreign diplomats, if you are born in the USA, you have citizenship. Who your parents are is irrelevant.


This is the core of our immigrant problem with Mexico. If they get momma over the border to have her baby she's set... Because the baby is a US citizen so his/her parent gets a pass to be In the country.


That is incorrect. A person is not eligible to sponsor a parent until they're 18 (or 21?). So while a mother running over the border to have a child does benefit from better medical care (most likely), the child's citizenship doesn't help her for a long time, if ever. (The child would need to meet all the sponsorship requirements for parents, which aren't trivial.)

At best, this helps the child's future opportunities, which may help the family. It in no way gives the parents a pass. A cursory review of sponsorship laws would reveal this. Yet for some reason, people parrot this silly saying as if it was somehow true.


can you link a citation to the 'exception' you mention?


Sure: http://www.law.cornell.edu/cfr/text/8/101.3

The relevant portion is: "A person born in the United States to a foreign diplomatic officer accredited to the United States, as a matter of international law, is not subject to the jurisdiction of the United States. That person is not a United States citizen under the Fourteenth Amendment to the Constitution. Such a person may be considered a lawful permanent resident at birth."


So, rather than being denied citizenship, it's almost like given their parents privilege, they are being protected?


They are protected from the duties of a citizen. Military service [1] and jury duty come to mind.

[1] I know that the US does not have conscription at the present time


Thanks! Interesting...


If you are born on American soil, you are an American citizen.


This includes foreign military bases.


Only since 1983 - my mother is a British citizen born to Australian parents while they were over there for a couple years.


It seems only fair to leave that choice up to her.


He's asking for information about what the best choice is, presumably to help her make an informed decision. I don't see him saying anywhere that they are going to make her go either way.


I wonder what is going to happen to all those US citizens living abroad with the new health insurance requirements.. Will they be forced to pay even they can't benefit from the services ?

( Specially if they are already covered by their host country healthcare system. )


"U.S. citizens living in a foreign country are not required to get health insurance coverage under the Affordable Care Act. If you're uninsured and living abroad, you don't have to pay the fee that other uninsured U.S. citizens may have to pay."

https://www.healthcare.gov/am-i-eligible-for-coverage-in-the...


US citizens who live abroad for 330 days in a calendar year are exempt: see question 12 at http://www.irs.gov/uac/Questions-and-Answers-on-the-Individu...


That's really harsh. Someone living abroad could easily spend > 35 days/year in the US on business or visiting family.


Not really. The point of the requirement is to subsidize the health care you will get if they find you unconscious, naked in a ditch without ID and can't tell if you are wealthy enough to pay or not.

Absent insurance, that privilege is paid for by the higher prices charged to people unlucky enough to need healthcare.

Now, if you can't get plans that consider the fact that you are only in the US for < 100 days a year, then yes it's harsh.


As an American that lives abroad, whenever I visit the US I make sure I always have traveler's insurance for myself and all my dependents that are traveling with me. Last year I was in the US for a over 100 days, and my traveler's insurance was valid for every second.

It shouldn't matter how many days you are in the US or not, it should matter where you declare your tax home.


Given that the answer links to a document on tax status for expat citizens, I wouldn't be surprised if it has more conditions that work out about the same as tax status. (i didnt read the linked doc to find out).


Or the travelers insurance should count as health insurance in terms of that mandate. Does it?


Just a guess, but I don't think it will. The policy and all documents are not in English, and no reason for them to be either.

So if they make an exemption for travelers insurance, it will be hard for them to verify that it meets the criteria of the exemption.


As I understand it, if you ar a resident of the another country as defined for the Foreign Earned Income Exclusion (330 days a year outside the US _or_ have permanently settled with no evidence of intention to return to the US), you are exempted from the insurance requirements.

This really sucks for people who leave the US long durations (8 months in my case) at a time, but return occasionally. Have to either get insurance for the 8 months that isn't usable, or pay the fine.


Overseas Americans who eventually return to the US do receive one benefit from the ACA: the ban on excluding coverage of preexisting conditions.

That means the most for those whose coverage in their host country wouldn't have met the HIPAA requirements for creditable coverage, of course. However, even those whose coverage would have satisfied the HIPAA requirements do get to avoid at least one round of confusing paperwork.


I'm very curious about this as well. Are there any provisions in ACA for those living abroad?


If a US-born citizen (as opposed to naturalized US citizen) renounces their citizenship, can they claim it again afterwards? Or is it forever gone?


The State department website on it says that the renunciation is final unless it meets certain guidelines, which basically means that if you did it at age 18+, you're going to have to go through the immigration process just like every other non American.

http://travel.state.gov/law/citizenship/citizenship_776.html


That's correct. Once you have renounced U.S. citizenship you are like all the other billions of people on the planet--if you qualify to re-enter the USA and apply for citizenship, you can do so.

The tax rules for giving up citizenship have specific provisions fully expecting people to give up citizenship twice. :-)

Disclaimer: I am a lawyer, and I do lots and lots of expatriation cases.


Presumably rules regarding American parents transmitting citizenship could come into play.


It's right there in the article, in the interview with the guy who did just that.


Unfortunately the US gov could not care less.

I'd be inclined to say "well if you left, then fine", but with the dual taxation and the inability of Congress to pay their bills (it is not just Democrat money, by a long shot)...what exactly are we paying for and why should everyone be responsible for it?


Is there any historical examples of a representative democratic country simplifying its tax code? How was it done?

The United States have been around for centuries, and each elected governments and congresses have their own idea about how the tax code should look like. Probably that's why now we have very complicated system, because it's the aggregation of centuries' worth of ideas.

The logical step is to simplify it, but I don't think it's really possible with the current US political system. Each part of the complexity benefits some group, and every group will influence the lawmakers to keep their benefit/loophole.


New Zealand has dramatically (dramatically!) simplified our tax for ordinary (salary/wage employees), especially in the 1980s and 1990s. Given the period was one of dramatic economic and social change I doubt most Kiwis could give you a remotely impartial account (myself included); a couple of key elements that appear to be completely absent in the US culture are:

1/ A willingness to accept loophole losses. I have almost nothing I can really claim on as a salaried employee - childcare and charitable donations are about it. There used to be more. I certainly can't claim deductions for "having a mortgage", for example. If I was a lot poorer or had a lot more children (7+) I could get a tax redution for that, but nothing like as generous as the US rates are.

Most of the loophole reduction went hand-in-hand with tax cuts, but we're talking dropping from a top rate of >60% by the end of the Muldoon government down to the 30s for the top tier.

2/ Much of the compliance burden and risk falls on employers, so business groups tend to support simplification, because it mitigates risk and reduces costs for them.

3/ There's more a perception of getting value out of taxes paid in New Zealand than the US. Mainstream political dialogue tends to be around fixing perceived problems in government, not nuking it to a smoking hole, pissing in the hole, and sowing the ground with salt.

Many US progressives/lefties I've spoken with seem to react with suspicion and horror at the idea of being able to have the IRS estimate your taxes on your behalf in case they swindle them out of their tax breaks, which is both a nice combination of 1) and 3), and illustrates the gulf operating. Mainstream left/progressive voters in New Zealand are not commonly of the opinion that accepting the IRD's estimate on owed taxes is going to stiff them out of thousands of dollars in loopholes.


Nice example.

>>Many US progressives/lefties I've spoken with seem to react with suspicion and horror at the idea of being able to have the IRS estimate your taxes on your behalf

I felt the opposite when I first heard that US tax system was too complicated. What I know before about filing tax was simply 1) approve my employer's filing about my salary 2) declare child and donation. How complicated could that be?


The U.S. greatly simplified its tax code in the late 1980s, in an era of divided government at that. Its complexity has increased since then as subsequent Congresses have tinkered with the tax code.


I'll be able to apply for Paraguayan citizenship in about a year, and I plan to renounce my US citizenship immediately afterwards.

I'm so much happier here in Paraguay (even with all the cultural differences), instead of the US. I also can't say I feel happy about how things have progressed in the US over the last few years - regarding politics and economics. I really expect that Paraguay is the country where I will build my family and my future.


It used to be free to renounce U.S citizen ship, but I think it's $500 bucks to file for it now because too many people are lining up.


The fee is $450. Most people are happy to pay it.

(Disclaimer: lawyer; handle lots of these cases).


Current citizen, wife with dual citizenship. Long term we will probably end up in her country (an EU nation), we are already looking at strengthening some of those ties.

She had to divest some interests when she took up residence here, if we decide to go back over there (likely in the next 3-5 years), we will look carefully at whether or not staying in vested in the US makes sense. The US feels like it is trying to turn every benefit into something akin to a 401k -- HSA accounts, etc. Which isn't ideal, but they still aren't separating things from the employer based healthcare model...so in a sense many are getting the worst of both worlds.

Healthcare may actually be the motivating issue for us.


Here is a quick youtube issue summarizing the citizenship based taxation issue the USA has. Supposedly it came out of the civil war:

https://www.youtube.com/watch?feature=player_embedded&v=DKFE...


If corporations are people, why do they not need to pay taxes when they go all "ex-pat?"


I'm turning Japanese.


Some of the stuff the people in the article write is just plain stupid. If I could get US citizenship for my newly born daughter (born in Poland) after being in the US total just 5 years, why she couldn't get it done, is beyond me. People who have lived in EU complaining about US burocracy and pointing it as a reason for giving up on an US citizenship are beyond me too. US taxation system is a walk in a park compared with EU. All the people from the article seem to be carefully selected socialists big time who just couldn't wait to give up on the US citizenship no matter what. And for one each of them there are literally thousands foreigners who would rather live in the USA, including Germans, Canadians, etc.


What may be driving some people is simply the fear of getting the paperwork wrong. The penalties listed on the forms are scary.

You can't just do it in Turbotax for 50 bucks, you need a qualified tax professional to help you. Good luck finding one familiar with the latest US regulation when you're abroad. The fees will be in the thousands, every year, for the rest of your life.

The financial toll and mental stress all adds up and I guess at some point people just give up. It's a shame that the burden of paperwork results in people giving up their citizenship.


I do it with Turbo Tax for 50 bucks. The thing is not to open an account outside of the US. If you follow that rule you are fine and your return won't be longer than US return. If you really, really need that account in a foreign bank simply don't advertise left & right you are an US citizen and open an account using your local (German, Canadian, whatever) driver's license. I have lived in Poland 3 years so far with US citizenships it costs nothing. And the benefits outweight any issues that might be there in any case.


The strategy of using your local ID (and hiding your U.S. status) will work for a little while longer. Google for the acronym "FATCA". Sooner or later your bank will ask you to certify that you have no U.S. connections.

No, the real key to keeping your paperwork simple is to keep the balance in all of your non-U.S. bank accounts below USD 10,000 at all times. The form is TD F 90-22.1.

Your U.S. tax return should be vastly more complicated than a resident's return if you want to avoid double taxation of your income. You will either be attaching Form 2555 (to exclude income from U.S. taxation) or Form 1116 (to claim credit for the taxes you pay in Poland) or both.

If you have a little investment account with some savings in it and you buy mutual funds, you will be filing Form 8621 for each mutual fund you buy.

If you are a startup entrepreneur and you own stock in your company, you will be filing Form 5471.

Seriously, it's a pain factory. I'm glad you have found a simple way of doing things, but for most people the annual cost of doing this paperwork is staggering.


Worth adding that most expats probably want to live a 'normal' life in their adopted country.

That means using local bank accounts / credit cards, getting a mortgage, etc.

Being resident and working probably means the state will automatically open social security and pensions in your name.

Also, expats still have to do the tax return for their adopted country, and the tax year may not be based on a calendar year so they can't just re-use the same figures!


Well, all my income comes from the US too. The only time I worked about 6 months for Polish branch of Intel in Poland, it was easy like piece of cake. I did it with Turbo Tax.

I just can't take seriously anyone claiming that somehow US taxation is worse than that of the EU and the same goes with dealing with burocracy in general. It is MUCH worse in the EU. Just had to pay 1,000 EUR of fine on a border for 'smuggling' a MacBook I bought on a trip to the US. And that's on top of the VAT and other taxes. So, not really sure what all that BS is all about. Because when you compare EU to the US, EU leaves its population just with enough money to pay for day-2-day living expenses and not much more. HORRIBLE!


> Google for the acronym "FATCA". Sooner or later your bank will ask you to certify that you have no U.S. connections.

Trust me. In Poland. It won't. Why? Because I'm a native here and nobody knows that I have US citizenship too. It's like saying that in your US bank branch you will be asked if you have no Polish connections. No, they won't. They want their business. And on top of that there is no way for them to know.


Yes, the article wasn't exactly clear but pretty much all of the stories (well, I only read a few) refer obliquely to one thing: you are subject to taxation by the United States even while you're a resident abroad, and paying taxes abroad.

It is as though your 'home state' continued to tax you (or make you file paperwork) long after you've moved to California. Nobody else (worldwide) does this. It doesn't make any sense.

This is a primary motivation people have for renouncing U.S. citizenship.


US citizen, living in Switzerland. I don't want to give up my citizenship and I don't mind to pay some tax to the US. I did get a great education and attitude growing up there, but the risk of making a mistake could be ruinous to my family (French wife, two kids born here). It's fair that if you make a mistake, you pay a penalty, but with the current rules, it turns into a crime. Very scary because it's so complicated.


> It is as though your 'home state' continued to tax you (or make you file paperwork) long after you've moved to California.

This is an imperfect analogy (since there is not really a concept of "citizenship" for individual US states), but note that claiming residency in one state while living in another will often require you to pay taxes in both.

> Nobody else (worldwide) does this. It doesn't make any sense.

I think it is pretty clear its purpose is to prevent US citizens from deciding to live abroad in order to pay less income tax. The legislation that requires US citizens to report foreign bank accounts (which some of the people in the BBC article mention) is called the "Foreign Account Tax Compliance Act" [1] is supposed to prevent all citizens from committing tax evasion by hiding funds in foreign bank accounts.

I think there are multiple reasons why you or others could argue that these rules are counterproductive [2] or otherwise detrimental to the interests of the United States, but I do not think they can be dismissed out of hand.

[1]: http://www.irs.gov/Businesses/Corporations/Foreign-Account-T...

[2]: https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...


> there is not really a concept of "citizenship" for individual US states

Yes there is. The Fourteenth Amendment clearly states:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.


Of course they can be dismissed. What you're not getting is that these people have to pay full taxes in the place they're actually living. A place you're not living has no business collecting further taxes from you.


> What you're not getting is that these people have to pay full taxes in the place they're actually living.

In that case, they can claim a "Foreign Earned Income Exclusion" [1] which reduces or eliminates their American tax liability for up to $97,600 of income that they are "paying full taxes" on.

> A place you're not living has no business collecting further taxes from you.

As other comments have noted, just because you are not living in the United States does not mean that you are not materially benefiting from citizenship. Despite living abroad, you can still vote, travel to and from the United States, and take advantage of US diplomatic representation in case of arrest.

[1]: http://www.irs.gov/Individuals/International-Taxpayers/Forei...


As has already been stated many, many times, for most Americans living abroad who are not super-rich, the issue isn't the taxation - it's the complexity (and associated penalties) of the reporting requirements.

Basically, the US government's attitude toward Americans living outside the US, much like the US attitude toward non-Americans wherever they live, is "F* You."

Perhaps you think that this attitude is somehow justified. As a US citizen myself, I think that it is detrimental to long-term US interests.


> Perhaps you think that this attitude is somehow justified.

I think it is a complex issue, and should not be dismissed as "not making any sense" or the government wanting to screw citizens living abroad over. As I have already stated, it is clear that the purpose behind the legislation is to prevent unreported income from being stored in foreign bank accounts.

Like with many complex issues, I think the current solution is imperfect and could be improved. Stating that it is stupid is not constructive.


I didn't say it was "stupid" - don't put words in my mouth. And I completely understand the bureaucratic purpose behind it.

The reality is that the truly rich (like Mitt Romney) have plenty of legal ways to shield their income, offshore or otherwise. So these regulations screw (the vast majority of) Americans aboard with relatively modest incomes, while they are ineffectual against the rich few with tax accountants on their permanent staff.

tl;dr - these rules create more harm than benefit.


I’ve seen this said several times—the right way to say it is that the U.S. and Eritrea are the only countries that tax non-resident citizens’ income regardless of the source of that income. There are often tax treaties in place with Western countries that reduce that value to zero based on taxes paid to the country of residence.

Canada will tax non-resident citizens if they have certain ties to Canada (http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html), but only on income generated in Canada.


The issue is not the complexity of the taxation system, but the fact that only the US and Somalia tax based on citizenship. http://en.wikipedia.org/wiki/File:Individual_taxation_system...


Sure, they are the only ones, but does that mean it's morally or logically wrong? Theoretically a government spends a certain amount of money on each individual as they live, become educated, and work in the US. If they decide to leave the US to work abroad, they shouldn't get any tax revenue back from you? They do allow you to deduct taxes paid to your residence country.


Taxing is mainly to pay for the facilities that the Government is providing you currently. That is the reason why vast majority of the countries (99% ?) are taxing based on physical presence. So if you are out of the country for most of the time during the last year, then you don't pay tax.


US is immigration based. 60% of New York City population wasn't even born in the USA. Wouldn't you think that in this circumstance a substantial number of them could avoid taxation by living more than 6 months abroad even though their income would be generated in the US? I'm a dual Polish/US citizen. Easy scenario: remote work in US for $100k+ a year while residing all that time in Poland. That's why they have it. There is no other country in the world that's that rich and is based on immigration, so people would have incentive to game the system. That's why the system is built that way that you have to _declare_ your income even when abroad. If somebody can't do this because of $3k lost, that's just shows for them not for the US.


That's a problem, but it doesn't have anything to do with citizenship. Rather with residency vs. place of work. It's a problem every European country faces (work in France, live in Germany for example) and still none of them motivate their citizens to abandon their citizenship when they live abroad. I am a German living in the US and I have no downside of being a German citizen. As a green card holder the only thing that I cannot do is vote. It would be nice to become a US citizen one day, but given the huge downside of the tax burden if I ever decide to ant to live somewhere else for a while is a big deterrent for me.


> It's a problem every European country faces (work in France, live in Germany for example) and still none of them motivate their citizens to abandon their citizenship when they live abroad.

What I'm saying is that it is practical and pragmatic for the US to have this law. It's not for Germany. Why? Because the number of immigrants in the US is extremely high.

Was US to implement the same law Germany has then 60% of New Yorkers would be able to avoid paying income tax in the US. Not that all of them would do that, but just saying. US has this special circumstance of having a big chunk of their population with 2 passports. Not 10% like in Germany, but 60% like in New York. Then you have to enact a law to discourage people from taking advantage of their 2nd citizenship in terms of taxes, or nobody would pay, they would just stay over 6 months in their mother countries whenever that's convienenient (i.e. reaching retirement age).



What part of the US tax system is easy compared to the EU, seriously because I come from the UK and being in the US is the first time in my life I have had to even file a tax return.

The US system seems to guarantee you need an accountant.


Yeah. The Canadian tax system is simple enough that I could do it on paper. I mostly use an on-line system because it helps me balance the deductions my wife and I have for best tax benefits.


Ever heard of Turbo Tax? If I can do it in 2 hours each and every year a day before the deadline being US citizen in Poland, yeah you need a lot of bad faith to have issues.


Ok somewhat fair, but again (and I admit I do not come from Poland, and can only use the UK, French and German tax systems as anecdotal evidence) I didn't need tax software before I came to the US.

In the UK I do my taxes in 0 minutes most years, maybe in 10 minutes if I get a small return through the post.

Fwiw (I didn't use turbotax but some other online software) when I did my last US tax return; it was wrong and I had letters come through adjusting the calculations.


> All the people from the article seem to be carefully selected socialists big time who just couldn't wait to give up on the US citizenship no matter what

"survivor" bias? Maybe those are the only kind of people who want to give up their U.S. citizenship?




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: