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You're right of course, but this is mostly by design. Rightly or wrongly, the US position is that you need to pay taxes to someone. I think the intent of the la

by deong 11y ago

You're right of course, but this is mostly by design. Rightly or wrongly, the US position is that you need to pay taxes to someone. I think the intent of the laws is at least arguably reasonable, but the execution isn't great. Assuming for the moment that the US isn't going to stop taxing expats on foreign income, I do think the exclusion limit is too low by about half. Making it more like $200k would allow more highly paid "normal workers" to avoid the penalty, while still hitting the very wealthy purely looking at the tax dodge. And the limitations on time spent in the US are absurdly low as well. I'm an academic, so if I attend a couple of conferences there, I actually have to count the days left when I book a holiday to spend with my family. I have almost as many paid vacation days in Iceland as I'm allowed to spend in the US without forfeiting my bona fide tax home status, which is ludicrous.

morgante 11y ago
> Rightly or wrongly, the US position is that you need to pay taxes to someone. I think the intent of the laws is at least arguably reasonable, but the execution isn't great. You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate. > Making it more like $200k would allow more highly paid "normal workers" to avoid the penalty, while still hitting the very wealthy purely looking at the tax dodge. That would certainly make sense. Personally, I think a more thorough analysis of income sources is also in order: if you're genuinely working for a foreign company as a foreign employee, I think that should be treated differently than a wealthy person who is just avoiding US residency for tax purposes, despite the majority of their income coming from US sources.
- deong 11y ago
  > You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate. Then you'd pay a proportionately lower rate for your US burden. The overall amount of tax owed should be relatively constant. > I think a more thorough analysis of income sources is also in order I suspect the issue here is the manpower required to do it and/or the potential for extra loopholes. Could I start a company in Singapore that just happens to derive all its income from US sources and has me as its sole employee? Taxing by amount makes a certain degree of sense in that regardless of shenanigans, if you get money at the end, we tax that money. (Though of course, we don't actually do this in the US with things like capital gains.)

by deong 11y ago

morgante 11y ago

> Rightly or wrongly, the US position is that you need to pay taxes to someone. I think the intent of the laws is at least arguably reasonable, but the execution isn't great. You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate. > Making it more like $200k would allow more highly paid "normal workers" to avoid the penalty, while still hitting the very wealthy purely looking at the tax dodge. That would certainly make sense. Personally, I think a more thorough analysis of income sources is also in order: if you're genuinely working for a foreign company as a foreign employee, I think that should be treated differently than a wealthy person who is just avoiding US residency for tax purposes, despite the majority of their income coming from US sources.

deong 11y ago
> You do pay taxes in (for example) Hong Kong. It's just not as a high as the US rate. Then you'd pay a proportionately lower rate for your US burden. The overall amount of tax owed should be relatively constant. > I think a more thorough analysis of income sources is also in order I suspect the issue here is the manpower required to do it and/or the potential for extra loopholes. Could I start a company in Singapore that just happens to derive all its income from US sources and has me as its sole employee? Taxing by amount makes a certain degree of sense in that regardless of shenanigans, if you get money at the end, we tax that money. (Though of course, we don't actually do this in the US with things like capital gains.)