4 ms·

It's worth pointing out that the US model of taxation (US citizens pay taxes on income earned anywhere in the world), as much as people complain about it, compl

It's worth pointing out that the US model of taxation (US citizens pay taxes on income earned anywhere in the world), as much as people complain about it, completely negates the value in offshore income a la Panama papers. Sure, until recently you could hide your income in Switzerland, but it was a clear crime -- there wasn't legal grey area. And yes yes, there are other ways to try to avoid taxation (deductions etc) but this is a really big one that the US doesn't have to worry about.

petre 9y ago
Only the US has the military muscle to do that. And some US citizens are relinquishing their citizenship because of that. This is not how you fix it. You fix it by a flat tax rate and by not abusing the taxpayer: max 10% tax. Anything over that figure is outright theft. Tax the rich cheering is just an incentive to tax starve the regular taxpayer (everyone else). The rich, meaning their capital will just move elsewhere.
- ryanwaggoner 9y ago
  Max 10% tax being not-theft is just as arbitrary as "the rich aren't paying their fair share!"
ajdlinux 9y ago
The unique aspect of the US model isn't that they tax income worldwide - it's that they tax income worldwide on citizens who reside anywhere in the world. As an Australian who lives in Australia, I have to pay Australian income tax on any income I make from overseas assets as long as I am an Australian resident for tax purposes. This kind of taxation policy is pretty standard as far as I know. The problems with offshore income are that you can often bury the income in a twisted maze of companies and trusts that are under your control - not that the personal income tax laws of your country don't tax foreign source income.
cr1895 9y ago
>It's worth pointing out that the US model of taxation (US citizens pay taxes on income earned anywhere in the world), as much as people complain about it, completely negates the value in offshore income a la Panama papers What's different about the US model is that worldwide income is taxed while not living in the US. So if you are an American who permanently lives and works in Germany, for example, the American government entitles itself to tax the money you earn in Germany (*in principle, at least; due to exemptions you've really got to be earning $$$$ to pay taxes twice). Most countries as far as I'm aware would tax their residents based on income earned abroad, provided they are actually residing in said country. The difference is taxation by citizenship vs. taxation by residence.
- DenisM 9y ago
  You will not get taxed twice, rather you will pay part of your taxes in one country and the remaining part, if any, in the other country. You tax rate is the maximum of the two. https://en.m.wikipedia.org/wiki/Double_taxation https://en.m.wikipedia.org/wiki/Double_taxation
  - cr1895 9y ago
    You're right, I wasn't particularly clear. My point was more that you'll (potentially) pay taxes in two countries on money only earned while living and working in one country.
    - r00fus 9y ago
      If you're living in an EU country like Germany, isn't it academic? - EU taxes are well above US taxes so in effect you will pay nothing more.
inertial 9y ago
US has double tax avoidance agreement with many countries. So if you are a US citizen living in country X, you end up paying taxes to US & X, both. But a reasonable chunk of the "double" tax can be recovered when you file your returns. It's not that bad if you consult a tax expert (good international tax experts are rare, quite a few are misinformed). P.S. US isn't the only country that taxes you on your worldwide income.

petre 9y ago

Only the US has the military muscle to do that. And some US citizens are relinquishing their citizenship because of that. This is not how you fix it. You fix it by a flat tax rate and by not abusing the taxpayer: max 10% tax. Anything over that figure is outright theft. Tax the rich cheering is just an incentive to tax starve the regular taxpayer (everyone else). The rich, meaning their capital will just move elsewhere.

ryanwaggoner 9y ago
Max 10% tax being not-theft is just as arbitrary as "the rich aren't paying their fair share!"

ajdlinux 9y ago

The unique aspect of the US model isn't that they tax income worldwide - it's that they tax income worldwide on citizens who reside anywhere in the world. As an Australian who lives in Australia, I have to pay Australian income tax on any income I make from overseas assets as long as I am an Australian resident for tax purposes. This kind of taxation policy is pretty standard as far as I know. The problems with offshore income are that you can often bury the income in a twisted maze of companies and trusts that are under your control - not that the personal income tax laws of your country don't tax foreign source income.

cr1895 9y ago

>It's worth pointing out that the US model of taxation (US citizens pay taxes on income earned anywhere in the world), as much as people complain about it, completely negates the value in offshore income a la Panama papers What's different about the US model is that worldwide income is taxed while not living in the US. So if you are an American who permanently lives and works in Germany, for example, the American government entitles itself to tax the money you earn in Germany (*in principle, at least; due to exemptions you've really got to be earning $$$$ to pay taxes twice). Most countries as far as I'm aware would tax their residents based on income earned abroad, provided they are actually residing in said country. The difference is taxation by citizenship vs. taxation by residence.

DenisM 9y ago
You will not get taxed twice, rather you will pay part of your taxes in one country and the remaining part, if any, in the other country. You tax rate is the maximum of the two. https://en.m.wikipedia.org/wiki/Double_taxation https://en.m.wikipedia.org/wiki/Double_taxation
- cr1895 9y ago
  You're right, I wasn't particularly clear. My point was more that you'll (potentially) pay taxes in two countries on money only earned while living and working in one country.
  - r00fus 9y ago
    If you're living in an EU country like Germany, isn't it academic? - EU taxes are well above US taxes so in effect you will pay nothing more.

inertial 9y ago

US has double tax avoidance agreement with many countries. So if you are a US citizen living in country X, you end up paying taxes to US & X, both. But a reasonable chunk of the "double" tax can be recovered when you file your returns. It's not that bad if you consult a tax expert (good international tax experts are rare, quite a few are misinformed). P.S. US isn't the only country that taxes you on your worldwide income.