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Well there are a handful right here on this comment section. I'm a Brit and have known maybe half a dozen US citizens reasonably well here in London over the ye

by simonh 5y ago

Well there are a handful right here on this comment section. I'm a Brit and have known maybe half a dozen US citizens reasonably well here in London over the years, at least two of which renounced US citizenship for tax reasons while I knew them. It's definitely a thing.

emodendroket 5y ago
According to another post you do not owe tax on income below $108k so that’s probably not going to affect most filers, though I’m sure an anomalously high number of HN users are earning six-figure salaries.
- simonh 5y ago
  Oh well, that's alright then. As long as it's only successful people getting screwed I suppose we're good.
  - emodendroket 5y ago
    I mean, am I supposed to feel sorry for high-income people because they have to pay tax to continue to benefit from US citizenship and US embassies? I don't really, nor do I consider it getting "screwed." I think it is only fair that well-to-do expats should pay into the system like everybody else. If they don't want to, I welcome them to take the article's lead and give up their citizenship.
    - simonh 5y ago
      If it was just getting taxed up to a point I think you'd have a reasonable argument, but looking at the torturous nonsense they have to go through to the point where even US banks think the costs of having them as clients isn't worth the hassle, it's clearly way beyond that. Also, many of these people don't actually owe any tax at all, or relatively small amounts, but it's ridiculously difficult and costly to prove it. I mean what is the objective? Raise tax revenue from ex-pats, or drive them out of US citizenship? What's actually happening seems to be the latter, not so much the former. Surely that's a serious policy failure.
      - withinboredom 5y ago
        After not living in the US for a few years, your view of the US is quite disillusioned. They don’t want you to come back and live there. The need to keep everyone thinking the US is the best. /s
    - fantod 5y ago
      The thing is, many of these expats aren't even "paying into the system" anyway. I have to file US taxes but can deduct what I pay in taxes in my country of residency, which is higher than I'd pay in the US; as a result, I don't actually owe any US taxes. But, like another commenter said, I have to pay thousands to someone to figure out how to even file all this stuff. In other words, some local accountant is making bank, not the IRS.
      - emodendroket 5y ago
        I could probably be convinced to get on board with an initiative to make filing easier, but this is a different argument than I was responding to.
    - ElFitz 5y ago
      From what I’ve read, the US is possibly one of the worst countries to have to file taxes with, paperwork-wise. And that’s for the simple scenario of someone actually living in the US. But is also is another issue altogether. How US citizens can bear with this and the lobbying that spawned it is beyond me.
      - emodendroket 5y ago
        The people who have complicated taxes also usually have complex income sources and generally higher incomes. If you just get your wage the tax forms are relatively straightforward. Being international complicates things but you'll notice people are talking about the headaches associated with running their businesses, capital gains, etc.
        ghaff 5y ago
        Yeah, while you could argue that the IRS should do pre-filled electronic returns, the reality is that if you have a W2 and a couple 1099s, doing your taxes is pretty straightfoward. As you say, it's more complex income sources and potentially deductions that lead to big accountant bills.
        mellavora 5y ago
        Or simply the fact of living overseas. And you mention 1099s, i.e. self employed. Well, if you run a sole proprietorship as an expat, you still have to file US self-employment tax forms, and there are also QUARTERLY filing requirements with penalties for non-filing. Or you need to get the paper certifying that your country has a totalization agreement with the US (not all do). And since 1099 isn't a thing in EU, you have to file the US 'small business' tax form, which is actually 3-5 forms. so as an expat, even what should be very straight forward turns into a massive mess.
        ghaff 5y ago
        Sure. Yes, I was assuming a US citizen/resident working for an employer who has income from a few basic sources and is taking standard deduction--which actually describes a lot of people. (And I was mentioning 1099s mostly in the context of a brokerage account.)
    - skatkartoffel 5y ago
      Serious question, what benefits do you think US citizenship and US embassies provide over and beyond what pretty much every other western country provides to their citizens?
  - jrochkind1 5y ago
    Well, wehther it's alright or not, whether it is accurately characterized as 'getting screwed' or not, at least it's only the ones who can most afford it.
    - mixmastamyk 5y ago
      No, this hits the upper to middle professional class the hardest. One percenters are handled by a staff with white gloves as always.
      - emodendroket 5y ago
        Strange that we're all commenting on an article concerning specifically the ultra wealthy renouncing citizenship to reduce tax liability then
  - 2xpress 5y ago
    Perhaps you are being sarcastic in the parent comment, but United States "screwing" its successful people and forcing them out means that these successful people will no longer contribute to United States, but to their new home country instead. Without their contributions the Unites States will be less successful, thereby "screwing" everybody in it. This trend within United States is especially ironic and alarming considering that United States gained its success specifically by giving home to persecuted people from other countries with capacity for success. Conversely, other countries, some obvious examples being Nazi Germany and USSR, were not successful specifically because they forced out their successful people.
- w0mbat 5y ago
  As multiple people have explained, preparing the required paperwork each year is a major expense and hassle, even if you do not owe any tax. Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid.
  - AnIdiotOnTheNet 5y ago
    > Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid. Sorry, what? Exactly how much technical ability does it take to frequent a website? You have the strangest delusion I've seen on HN and that's saying something.
    - Talanes 5y ago
      To further illustrate that point: I'm a barista.
      - tacocataco 5y ago
        I work food service.
  - emodendroket 5y ago
    I just ran a search and found the median US personal income is around $35k. $108k may be low for a tech job but most people don't have high paying tech jobs.
  - jrochkind1 5y ago
    Googling, just the first one that comes up, suggests that median income for "software developer" in USA is $86,523. Meaning half make less, half make more. $100K is the 75th percentile, meaning 75% make less. (https://www.ziprecruiter.com/Salaries/Software-Developer-Salary https://www.ziprecruiter.com/Salaries/Software-Developer-Sal...) Some people that work in especially high-paid sub-industries have a mistaken idea of what typical "technical enough to frequent this web site" (?!) people make. And even if most software developers did make over $100K, it could still be a lot of money? The median income in USA as a whole looks to be about $52K, with $100K being about 83rd percentile (83% of USA makes less than $100K).
- jandrewrogers 5y ago
  That is only applies to so-called earned income, you still owe taxes on all of your other income. And many people earn considerably more than $108k. Furthermore, even under tax treaties, it is not uncommon for some part of your income to be double taxed due to differences in recognition and classification of income and foreign taxes paid. Americans often have to pay more taxes than if they only had to pay taxes in either country separately. And this is on top of the onerous reporting overhead and other difficulties.
  - emodendroket 5y ago
    Many people earn a lot more than that. I agree. Where I disagree is that I don't see what's unjust about asking them to pay tax for a system they benefit from.
    - bmn__ 5y ago
      Faulty assumption; Americans who live abroad do not benefit from the US system: social security/disability/retirement, health programs, military, public infrastructure etc. pp. is provided by the country where they live.
      - emodendroket 5y ago
        Does the country where they live run the embassy too and I just never knew about it?
        AdrianB1 5y ago
        They should not pay taxes in full to get 1% of the benefits.
        emodendroket 5y ago
        Why not? I could just as well say that someone making $50k in Arkansas shouldn't have to subsidize consular services for someone making a quarter million a year abroad. They're not really paying "full price" either given the large exemption.
- nraynaud 5y ago
  I’m self employed, and had a green card, I paid the accountant 700€ to file the US tax form and paid a couple thousands dollars in taxes because I hit the minimum tax rate.

by simonh 5y ago

emodendroket 5y ago

According to another post you do not owe tax on income below $108k so that’s probably not going to affect most filers, though I’m sure an anomalously high number of HN users are earning six-figure salaries.

simonh 5y ago
Oh well, that's alright then. As long as it's only successful people getting screwed I suppose we're good.
- emodendroket 5y ago
  I mean, am I supposed to feel sorry for high-income people because they have to pay tax to continue to benefit from US citizenship and US embassies? I don't really, nor do I consider it getting "screwed." I think it is only fair that well-to-do expats should pay into the system like everybody else. If they don't want to, I welcome them to take the article's lead and give up their citizenship.
  - simonh 5y ago
    If it was just getting taxed up to a point I think you'd have a reasonable argument, but looking at the torturous nonsense they have to go through to the point where even US banks think the costs of having them as clients isn't worth the hassle, it's clearly way beyond that. Also, many of these people don't actually owe any tax at all, or relatively small amounts, but it's ridiculously difficult and costly to prove it. I mean what is the objective? Raise tax revenue from ex-pats, or drive them out of US citizenship? What's actually happening seems to be the latter, not so much the former. Surely that's a serious policy failure.
    - withinboredom 5y ago
      After not living in the US for a few years, your view of the US is quite disillusioned. They don’t want you to come back and live there. The need to keep everyone thinking the US is the best. /s
  - fantod 5y ago
    The thing is, many of these expats aren't even "paying into the system" anyway. I have to file US taxes but can deduct what I pay in taxes in my country of residency, which is higher than I'd pay in the US; as a result, I don't actually owe any US taxes. But, like another commenter said, I have to pay thousands to someone to figure out how to even file all this stuff. In other words, some local accountant is making bank, not the IRS.
    - emodendroket 5y ago
      I could probably be convinced to get on board with an initiative to make filing easier, but this is a different argument than I was responding to.
  - ElFitz 5y ago
    From what I’ve read, the US is possibly one of the worst countries to have to file taxes with, paperwork-wise. And that’s for the simple scenario of someone actually living in the US. But is also is another issue altogether. How US citizens can bear with this and the lobbying that spawned it is beyond me.
    - emodendroket 5y ago
      The people who have complicated taxes also usually have complex income sources and generally higher incomes. If you just get your wage the tax forms are relatively straightforward. Being international complicates things but you'll notice people are talking about the headaches associated with running their businesses, capital gains, etc.
      - ghaff 5y ago
        Yeah, while you could argue that the IRS should do pre-filled electronic returns, the reality is that if you have a W2 and a couple 1099s, doing your taxes is pretty straightfoward. As you say, it's more complex income sources and potentially deductions that lead to big accountant bills.
        mellavora 5y ago
        Or simply the fact of living overseas. And you mention 1099s, i.e. self employed. Well, if you run a sole proprietorship as an expat, you still have to file US self-employment tax forms, and there are also QUARTERLY filing requirements with penalties for non-filing. Or you need to get the paper certifying that your country has a totalization agreement with the US (not all do). And since 1099 isn't a thing in EU, you have to file the US 'small business' tax form, which is actually 3-5 forms. so as an expat, even what should be very straight forward turns into a massive mess.
        ghaff 5y ago
        Sure. Yes, I was assuming a US citizen/resident working for an employer who has income from a few basic sources and is taking standard deduction--which actually describes a lot of people. (And I was mentioning 1099s mostly in the context of a brokerage account.)
  - skatkartoffel 5y ago
    Serious question, what benefits do you think US citizenship and US embassies provide over and beyond what pretty much every other western country provides to their citizens?
- jrochkind1 5y ago
  Well, wehther it's alright or not, whether it is accurately characterized as 'getting screwed' or not, at least it's only the ones who can most afford it.
  - mixmastamyk 5y ago
    No, this hits the upper to middle professional class the hardest. One percenters are handled by a staff with white gloves as always.
    - emodendroket 5y ago
      Strange that we're all commenting on an article concerning specifically the ultra wealthy renouncing citizenship to reduce tax liability then
- 2xpress 5y ago
  Perhaps you are being sarcastic in the parent comment, but United States "screwing" its successful people and forcing them out means that these successful people will no longer contribute to United States, but to their new home country instead. Without their contributions the Unites States will be less successful, thereby "screwing" everybody in it. This trend within United States is especially ironic and alarming considering that United States gained its success specifically by giving home to persecuted people from other countries with capacity for success. Conversely, other countries, some obvious examples being Nazi Germany and USSR, were not successful specifically because they forced out their successful people.
w0mbat 5y ago
As multiple people have explained, preparing the required paperwork each year is a major expense and hassle, even if you do not owe any tax. Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid.
- AnIdiotOnTheNet 5y ago
  > Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid. Sorry, what? Exactly how much technical ability does it take to frequent a website? You have the strangest delusion I've seen on HN and that's saying something.
  - Talanes 5y ago
    To further illustrate that point: I'm a barista.
    - tacocataco 5y ago
      I work food service.
- emodendroket 5y ago
  I just ran a search and found the median US personal income is around $35k. $108k may be low for a tech job but most people don't have high paying tech jobs.
- jrochkind1 5y ago
  Googling, just the first one that comes up, suggests that median income for "software developer" in USA is $86,523. Meaning half make less, half make more. $100K is the 75th percentile, meaning 75% make less. (https://www.ziprecruiter.com/Salaries/Software-Developer-Salary https://www.ziprecruiter.com/Salaries/Software-Developer-Sal...) Some people that work in especially high-paid sub-industries have a mistaken idea of what typical "technical enough to frequent this web site" (?!) people make. And even if most software developers did make over $100K, it could still be a lot of money? The median income in USA as a whole looks to be about $52K, with $100K being about 83rd percentile (83% of USA makes less than $100K).
jandrewrogers 5y ago
That is only applies to so-called earned income, you still owe taxes on all of your other income. And many people earn considerably more than $108k. Furthermore, even under tax treaties, it is not uncommon for some part of your income to be double taxed due to differences in recognition and classification of income and foreign taxes paid. Americans often have to pay more taxes than if they only had to pay taxes in either country separately. And this is on top of the onerous reporting overhead and other difficulties.
- emodendroket 5y ago
  Many people earn a lot more than that. I agree. Where I disagree is that I don't see what's unjust about asking them to pay tax for a system they benefit from.
  - bmn__ 5y ago
    Faulty assumption; Americans who live abroad do not benefit from the US system: social security/disability/retirement, health programs, military, public infrastructure etc. pp. is provided by the country where they live.
    - emodendroket 5y ago
      Does the country where they live run the embassy too and I just never knew about it?
      - AdrianB1 5y ago
        They should not pay taxes in full to get 1% of the benefits.
        emodendroket 5y ago
        Why not? I could just as well say that someone making $50k in Arkansas shouldn't have to subsidize consular services for someone making a quarter million a year abroad. They're not really paying "full price" either given the large exemption.
nraynaud 5y ago
I’m self employed, and had a green card, I paid the accountant 700€ to file the US tax form and paid a couple thousands dollars in taxes because I hit the minimum tax rate.