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You're aware that foreign tax can be taken as a credit or deduction, yes? Further not only are you incorrect about the whole "won't accept" thing, they have a w

You're aware that foreign tax can be taken as a credit or deduction, yes? Further not only are you incorrect about the whole "won't accept" thing, they have a whole process for exactly how you do it. Importantly, that process only applies to well-off expats (multiple years at $150k+ or >$2m in net worth) and anyone else who wants out can get out quickly and cheaply. This whole flap isn't about"can't pay", it's about "don't want to". https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-choosing-to-take-credit-or-deduction https://www.irs.gov/individuals/international-taxpayers/fore... https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...

slededit 8y ago
You seriously underestimate the burden the US places on its expats and banks that do business with them. Its to the point most foreign banks will not do business with US nationals.
- Godel_unicode 8y ago
  No, I really don't :) :%s/most/a select few you shouldn't work with anyway
  - slededit 8y ago
    Its actually the vast majority of foreign banks, except those with a strong US presence (and even then not always. E.g. Deutsche bank won't take US clients in Germany [0]). > Most Foreign Banks Don't Want U.S. Clients; How To Find One That Does [1] > U.S. ambassador to Switzerland is asking banks in the country to reverse course and accept Americans as clients. [2] 0: https://www.reuters.com/article/us-banks-expats/u-s-expats-find-their-money-is-no-longer-welcome-at-the-bank-idUSKBN0EM16V20140611 https://www.reuters.com/article/us-banks-expats/u-s-expats-f... 1: https://www.forbes.com/sites/deborahljacobs/2012/07/31/most-foreign-banks-dont-want-u-s-clients-how-to-find-one-that-does/#67f972fc7704 https://www.forbes.com/sites/deborahljacobs/2012/07/31/most-... 2: http://money.cnn.com/2016/10/20/investing/swiss-banks-americans-fatca-switzerland/index.html http://money.cnn.com/2016/10/20/investing/swiss-banks-americ...
BeetleB 8y ago
A lot of the problem isn't that they owe taxes but that they have trouble filing correctly. You're required to file even if you owe no tax. The US has fairly high reporting requirements. Think of all the tax forms you've received in the US. W2. All the various 1099s. All the docs related to stocks, SPP, interest on mortgage, real estate transactions, etc. The IRS still needs all that paperwork even if you have these deductions. As you live abroad and conduct these transactions abroad, it becomes entirely your responsibility to fill out these forms properly as they're only going to give you forms relevant to their country's taxes. This proves burdensome enough that a lot of expats pay thousands a year to tax firms to get all this info and file on their behalf. It's too time consuming and risky to do it yourself. For those lower income folks it's cheaper to renounce than to keep paying these fees.
- perl4ever 8y ago
  "This proves burdensome enough that a lot of expats pay thousands a year to tax firms" It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are <10% of your total tax bill.
  - pembrook 8y ago
    Is H&R Block doing sponsored posts on HN now?
    - perl4ever 8y ago
      10% would be excessive if it were typical for the general public, I would agree. But not so much for a tiny subset with high earnings and particularly complex affairs. It doesn't make one the moral equivalent of children locked in cages.
      - BeetleB 8y ago
        >But not so much for a tiny subset with high earnings and particularly complex affairs. I think this is where I think we're talking about different things. It does not only affect people with high earnings. It affects all US citizens working abroad - including those who didn't exactly choose to live abroad. Again, I'm not talking only about double taxation. I'm talking about the need to file (which is true even if you earn $20K/year in a Latin American or Asian country). In my other comment to you I gave examples of fairly ordinary people in other countries who will be considered as US citizens under current tax laws who are legally bound by the US to do all that paperwork every year. As someone else pointed out, if your income is over $11K/year, you have to file. Run a small store that barely pays the bills? You have to file. Do some stock transactions and gain/lose money? You have to file. Just think of everything you have to include in your tax form (if you are in the US). Then think of all the tax docs you receive annually. You need to create all those tax docs yourself - including the ones you don't include with your return (in the US, the agency that issued the document already reported that info to the IRS). I got all these docs from various agencies even as a low earner in the US - this is definitely not about high earners.

slededit 8y ago

You seriously underestimate the burden the US places on its expats and banks that do business with them. Its to the point most foreign banks will not do business with US nationals.

Godel_unicode 8y ago
No, I really don't :) :%s/most/a select few you shouldn't work with anyway
- slededit 8y ago
  Its actually the vast majority of foreign banks, except those with a strong US presence (and even then not always. E.g. Deutsche bank won't take US clients in Germany [0]). > Most Foreign Banks Don't Want U.S. Clients; How To Find One That Does [1] > U.S. ambassador to Switzerland is asking banks in the country to reverse course and accept Americans as clients. [2] 0: https://www.reuters.com/article/us-banks-expats/u-s-expats-find-their-money-is-no-longer-welcome-at-the-bank-idUSKBN0EM16V20140611 https://www.reuters.com/article/us-banks-expats/u-s-expats-f... 1: https://www.forbes.com/sites/deborahljacobs/2012/07/31/most-foreign-banks-dont-want-u-s-clients-how-to-find-one-that-does/#67f972fc7704 https://www.forbes.com/sites/deborahljacobs/2012/07/31/most-... 2: http://money.cnn.com/2016/10/20/investing/swiss-banks-americans-fatca-switzerland/index.html http://money.cnn.com/2016/10/20/investing/swiss-banks-americ...

BeetleB 8y ago

A lot of the problem isn't that they owe taxes but that they have trouble filing correctly. You're required to file even if you owe no tax. The US has fairly high reporting requirements. Think of all the tax forms you've received in the US. W2. All the various 1099s. All the docs related to stocks, SPP, interest on mortgage, real estate transactions, etc. The IRS still needs all that paperwork even if you have these deductions. As you live abroad and conduct these transactions abroad, it becomes entirely your responsibility to fill out these forms properly as they're only going to give you forms relevant to their country's taxes. This proves burdensome enough that a lot of expats pay thousands a year to tax firms to get all this info and file on their behalf. It's too time consuming and risky to do it yourself. For those lower income folks it's cheaper to renounce than to keep paying these fees.

perl4ever 8y ago
"This proves burdensome enough that a lot of expats pay thousands a year to tax firms" It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are <10% of your total tax bill.
- pembrook 8y ago
  Is H&R Block doing sponsored posts on HN now?
  - perl4ever 8y ago
    10% would be excessive if it were typical for the general public, I would agree. But not so much for a tiny subset with high earnings and particularly complex affairs. It doesn't make one the moral equivalent of children locked in cages.
    - BeetleB 8y ago
      >But not so much for a tiny subset with high earnings and particularly complex affairs. I think this is where I think we're talking about different things. It does not only affect people with high earnings. It affects all US citizens working abroad - including those who didn't exactly choose to live abroad. Again, I'm not talking only about double taxation. I'm talking about the need to file (which is true even if you earn $20K/year in a Latin American or Asian country). In my other comment to you I gave examples of fairly ordinary people in other countries who will be considered as US citizens under current tax laws who are legally bound by the US to do all that paperwork every year. As someone else pointed out, if your income is over $11K/year, you have to file. Run a small store that barely pays the bills? You have to file. Do some stock transactions and gain/lose money? You have to file. Just think of everything you have to include in your tax form (if you are in the US). Then think of all the tax docs you receive annually. You need to create all those tax docs yourself - including the ones you don't include with your return (in the US, the agency that issued the document already reported that info to the IRS). I got all these docs from various agencies even as a low earner in the US - this is definitely not about high earners.