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I was born in and live in Canada, but am a US citizen through a parent. The US imposes difficult reporting requirements and regulations on its citizens living a

I was born in and live in Canada, but am a US citizen through a parent. The US imposes difficult reporting requirements and regulations on its citizens living abroad. All bank accounts, their balances, stocks, earnings, and more. If you make above about $100k, the US demands taxes on your income, even if you earned the money locally and have never stepped foot in the US. (Edit: Only if living in a country with lower taxes than the US.) Retirement savings accounts and other financial tools that are given local tax breaks, the US does not recognize, and may tax your contributions on. If you have not met your reporting obligations, whether you were aware of them or not, they can impose huge fines. Many american citizens here, or those with american parents, fear crossing the border or drawing attention to themselves. Lottery winnings are not taxed by Canada, but if an american wins the lottery anywhere in the world, the USA will take its chunk. And to add insult to injury, if you want to get out and give up your US citizenship for good, it will cost you. Before 2010 renunciation was free. From then to 2014, it was $400. Now they charge $2,350 plus a big exit tax if your net worth is above $2m. The US is the only country that taxes its overseas citizens this way, beside Eritrea.

lend000 10y ago
> The US is the only country that taxes its overseas citizens this way, beside Eritrea. And the UN has routinely condemned Eritrea (and only Eritrea) for this criminal practice. The US tax code has grown to be the most oppressive in the first world, including compared to countries with higher net rates.
- simonbyrne 10y ago
  Actually the UN tends to complain about slightly different issues rather than taxing of expatriates: > In 2015, a 500-page UNHRC report detailed allegations of extrajudicial executions, torture, indefinitely prolonged national service and forced labour, and indicated that sexual harassment, rape and prolonged sexual servitude by state officials are also widespread. https://en.m.wikipedia.org/wiki/Human_rights_in_Eritrea https://en.m.wikipedia.org/wiki/Human_rights_in_Eritrea
- pzh 10y ago
  That's because Eritrea doesn't have the US's military, and its ability to project power is limited to sending a couple of goons to harass a few rich expats they're aware of. Also, the stick that the US uses to enforce FATCA is the threat of a 30% penalty on all US-sourced income of the entities that fail to report. That and the threat of seizing funds, because any SWIFT transaction in US dollars always passes through the US, even if it is to send money from Germany to India.
  - jacobush 10y ago
    Actually Eritrea harasses quite a few ordinary people through a Stasi like network of regime loyal expats tasked with gathering intel on their brethren.
anigbrowl 10y ago
I hear many Americans are having trouble with consumer banking in other countries because it's not worth the paperwork and liability risk to have them as customers. When I'm king I'll fix all this :-)
- jacobush 10y ago
  You have recent competition in the race to kingship.
  - anigbrowl 10y ago
    It's always much easier to get someone else to lay the groundwork for you.
gst 10y ago
> If you make above about $100k, the US demands taxes on your income, even if you earned the money locally and have never stepped foot in the US. Doesn't the income tax treaty help in that case? Quoting from https://www.irs.gov/pub/irs-trty/canada.pdf https://www.irs.gov/pub/irs-trty/canada.pdf: "Subject to the provisions of Articles XVIII (Pensions and Annuities) and XIX (Government Service), salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State." I'm aware of the foreign income exclusion you're refering to, but wouldn't the tax treaty have a higher priority?
- klunger 10y ago
  American in Norway here. The amount excluded depends on the tax treaty and is different for each country. Right now, if you make above around 100k USD in Norway (adjusted each year for inflation), that amount above is taxed by the US. But, that is only for regular employment. If, for example, you decide to start freelancing, you still have to pay all of your self-employment taxes to the US, on top of the similar taxes here, even if your income is well below 100k. Also, if you decided to start a company or start-up (i.e., anything that is not a sole proprietorship), you get into a hell hole of other compliance regulations that makes it VERY expensive. It effectively mean no one wants to cofound with you or invest in you. Having US citizenship while abroad is terrible for entrepreneurs. (source: conversations with other Americans who have tried and failed to launch startups here for these reasons)
  - dogma1138 10y ago
    That isn't much different for most countries. Countries have tax agreements that settle expat earnings and social benefit contributions. The big difference it seems is the reporting obligation which is more or less unique to the US, in most other cases you settle the taxation once you return.
- NateyJay 10y ago
  Yes, it seems you're right. Canada has the higher tax rate, so the USA gives a credit and you are not charged extra on employment income. But the US has higher capital gains and estate taxes than Canada, and you may be charged there: http://www.theglobeandmail.com/news/politics/delays-costs-mount-for-canadians-renouncing-us-citizenship/article28688026/ http://www.theglobeandmail.com/news/politics/delays-costs-mo...
chenster 10y ago
> Lottery winnings are not taxed by Canada, but if an american wins the lottery anywhere in the world, the USA will take its chunk. And to add insult to injury, if you want to get out and give up your US citizenship for good, it will cost you. Before 2010 renunciation was free. From then to 2014, it was $400. Now they charge $2,350 plus a big exit tax if your net worth is above $2m. The US is the only country that taxes its overseas citizens this way, beside Eritrea. Loving how you explained it in simple English! I hope all regulations and laws explained this way!

lend000 10y ago

> The US is the only country that taxes its overseas citizens this way, beside Eritrea. And the UN has routinely condemned Eritrea (and only Eritrea) for this criminal practice. The US tax code has grown to be the most oppressive in the first world, including compared to countries with higher net rates.

simonbyrne 10y ago
Actually the UN tends to complain about slightly different issues rather than taxing of expatriates: > In 2015, a 500-page UNHRC report detailed allegations of extrajudicial executions, torture, indefinitely prolonged national service and forced labour, and indicated that sexual harassment, rape and prolonged sexual servitude by state officials are also widespread. https://en.m.wikipedia.org/wiki/Human_rights_in_Eritrea https://en.m.wikipedia.org/wiki/Human_rights_in_Eritrea
pzh 10y ago
That's because Eritrea doesn't have the US's military, and its ability to project power is limited to sending a couple of goons to harass a few rich expats they're aware of. Also, the stick that the US uses to enforce FATCA is the threat of a 30% penalty on all US-sourced income of the entities that fail to report. That and the threat of seizing funds, because any SWIFT transaction in US dollars always passes through the US, even if it is to send money from Germany to India.
- jacobush 10y ago
  Actually Eritrea harasses quite a few ordinary people through a Stasi like network of regime loyal expats tasked with gathering intel on their brethren.

anigbrowl 10y ago

I hear many Americans are having trouble with consumer banking in other countries because it's not worth the paperwork and liability risk to have them as customers. When I'm king I'll fix all this :-)

jacobush 10y ago
You have recent competition in the race to kingship.
- anigbrowl 10y ago
  It's always much easier to get someone else to lay the groundwork for you.

gst 10y ago

> If you make above about $100k, the US demands taxes on your income, even if you earned the money locally and have never stepped foot in the US. Doesn't the income tax treaty help in that case? Quoting from https://www.irs.gov/pub/irs-trty/canada.pdf https://www.irs.gov/pub/irs-trty/canada.pdf: "Subject to the provisions of Articles XVIII (Pensions and Annuities) and XIX (Government Service), salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State." I'm aware of the foreign income exclusion you're refering to, but wouldn't the tax treaty have a higher priority?

klunger 10y ago
American in Norway here. The amount excluded depends on the tax treaty and is different for each country. Right now, if you make above around 100k USD in Norway (adjusted each year for inflation), that amount above is taxed by the US. But, that is only for regular employment. If, for example, you decide to start freelancing, you still have to pay all of your self-employment taxes to the US, on top of the similar taxes here, even if your income is well below 100k. Also, if you decided to start a company or start-up (i.e., anything that is not a sole proprietorship), you get into a hell hole of other compliance regulations that makes it VERY expensive. It effectively mean no one wants to cofound with you or invest in you. Having US citizenship while abroad is terrible for entrepreneurs. (source: conversations with other Americans who have tried and failed to launch startups here for these reasons)
- dogma1138 10y ago
  That isn't much different for most countries. Countries have tax agreements that settle expat earnings and social benefit contributions. The big difference it seems is the reporting obligation which is more or less unique to the US, in most other cases you settle the taxation once you return.
NateyJay 10y ago
Yes, it seems you're right. Canada has the higher tax rate, so the USA gives a credit and you are not charged extra on employment income. But the US has higher capital gains and estate taxes than Canada, and you may be charged there: http://www.theglobeandmail.com/news/politics/delays-costs-mount-for-canadians-renouncing-us-citizenship/article28688026/ http://www.theglobeandmail.com/news/politics/delays-costs-mo...

chenster 10y ago

> Lottery winnings are not taxed by Canada, but if an american wins the lottery anywhere in the world, the USA will take its chunk. And to add insult to injury, if you want to get out and give up your US citizenship for good, it will cost you. Before 2010 renunciation was free. From then to 2014, it was $400. Now they charge $2,350 plus a big exit tax if your net worth is above $2m. The US is the only country that taxes its overseas citizens this way, beside Eritrea. Loving how you explained it in simple English! I hope all regulations and laws explained this way!