8 ms·

Next, the Supreme Court Decides How to Punish US Expats

22 points by voisin 4y ago

MomoXenosaga 4y ago
I've always wondered if most expats are Democrats? Every US election the media tries to find Republicans living in the Netherlands and aside from a GOP donor ambassador they always fail.
- ehvatum 4y ago
  The backpackers are, the patent holders and grizzled founders are sometimes not. It was super fun walking the streets in NL wearing a maga hat back in early 2016! I don’t recall a single negative reaction. By day, lots of interested conversation. By night, “grab ‘em by the pussy, American! Woohoo!”
  - kurupt213 4y ago
    When you’re rich, they let you
- mbg721 4y ago
  It doesn't matter, there are so few of them, they can be a stuffed-animal for either party to beat. If rule-of-law were really on the menu, they wouldn't have left.
superchroma 4y ago
I have often found it puzzling how the US taxes citizens working in other countries for non-US companies.
- 988747 4y ago
  That’s because they can. Every country in the world would gladly do the same (Who doesn’t like some extra money?), they just lack the economic and military power the US have to enforce it.
  - goosedragons 4y ago
    I don't think so. Do you think Britain taxed individuals living outside their jurisdiction pre-WWII when they were top dog? The US has also been doing this long before they were a superpower. Its been done for over a 100 years.
    - voisin 4y ago
      It’s been done this way since the revolutionary war. It was meant as a punishment for any American born defector to the British. It is still a punishment. But worse, it hurts American competitiveness abroad. Go to Hong Kong, Dubai, Singapore, etc, and you will find tons of British, Australians, Canadians, etc etc. but only a very small number of Americans relative to the populations.
      - bruceb 4y ago
        Other countries have to send their citizens abroad to find work isnt the most compelling argument.
        voisin 4y ago
        “Have to”? I am referring to investment bankers, lawyers, business owners. These are people who, because they have the flexibility to live anywhere and pay local taxes, move to these areas to take advantage of local opportunities, and the vast majority end up restricting those earnings in their home country later in life. It is a huge opportunity, similar to manifest destiny.
        bruceb 4y ago
        Won't someone think about the bankers and the lawyers! It is a wonder why the people have not risen up and demanded these groups pay no taxes. Jest aside, you pointed out that indeed these expats return. The argument is they benefited from the US before they left and will benefit when they come back. Why should they pay no taxes and expect to watlz back in whenever they please without having paid something to keep the country running. They also expect the country to send seal team 6 if they get abducted. There might be some valid points about the level of tax liability, but to think people should pay no tax on foreign earning is absurd.
- bruceb 4y ago
  Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas.
  - Majromax 4y ago
    > Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas. Other countries don't seem to have a problem extending consular assistance to their overseas citizens.
    - 7steps2much 4y ago
      The real question is, does the US provide all the consular services to its citizens for free because of the taxation? I know that a lot of other countries levy fees on their citizens for some services, especially those that are "nice to have" but not all that important.
    - Pulcinella 4y ago
      The US government also actually tends to do a bad job* about things like this (i.e. evacuating citizen’s from foreign countries). So you have to pay the taxes but probably can’t count on the government to help. Now, I actually think all US citizens should pay their taxes, but it should be far more fair and reasonable than it currently is (we are basically just creating massive PITA for people while probably not catching offshore millionaires/billionaires.) The fact that you are forced to pay taxes but then will have to try to hitch a ride out of the country with Canada is unacceptable. * https://travel.state.gov/content/travel/en/international-travel/emergencies/what-state-dept-can-cant-do-crisis.html https://travel.state.gov/content/travel/en/international-tra... https://www.nytimes.com/2022/02/16/us/politics/us-evacuation-ukraine-kabul.html https://www.nytimes.com/2022/02/16/us/politics/us-evacuation...
  - superchroma 4y ago
    Jesus, man, consular assistance should not be contingent on income. That's a disgusting idea.
anon291 4y ago
The supreme court applies the law. I don't understand where this idea has come from that the court ought to be the provider of novel 'fair' legislation (as opposed to the mean legislation proposed by Congress) or the decider of punishments. This law is set by elected members of Congress. It is their duty to provide proper punishments for it or to scrap it altogether. It is up to the president to show mercy when someone faces a trial like this through his power of clemency. Contrary to this article placing the blame solely with the judiciary, a case like this starts with the federal government starting a case. They don't have to. The executive is the real one punishing us expats. Stop making the court out to be some dictator.
- aidenn0 4y ago
  Indeed, if the recent decisions by the supreme court have taught me anything, it's that Congress has been incredibly ineffective at passing legislation over the past 40 years.
  - kurupt213 4y ago
    It took the recent decisions? Congress has almost completely abdicated its responsibility for decades
  - someguydave 4y ago
    One reason for this is because the Supreme Court has deferred to allowing a great deal of legislating in the Executive. Congress passes "blank check" laws that require unelected career bureaucrats to make law ("regulation") with minimal oversight. If the Supreme Court slowly disallows this, then Congress will eventually be forced to vote on controversial issues again.
    - aidenn0 4y ago
      I don't think there's anything in the constitution that prevents Congress from delegating their power. I don't think the authors anticipated that elected officials would want to give away their power.
andrew_eu 4y ago
The tax deduction for non-resident Americans is, of course, a little more complicated than the article suggests. With the disclaimer that I'm not a tax professional and this isn't tax advice, there are two options: for income up to some threshold (around 120k) it can be "excluded," basically a deduction on your AGI, with anything above that threshold taxed at the higher bracket; the other option is to basically treat taxes paid to foreign governments as a tax credit (with no threshold). If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. The fun twist: many countries in Europe have a tax system that doesn't assume everyone pays TurboTax, so actually filing is somewhat unusual, and basically impossible to do before 15 April. To find a European tax professional isn't always easy, and if you tell them you're an American they often back off, knowing your case is nightmarishly difficult. And if you do pay some US taxes still (e.g. capital gains on stocks still in a US account) then you're required to at least declare it on your European tax statement -- which itself must be submitted before you know how much US taxes you pay. The pool of recursion-ready tax advisors is unfortunately very small, and US citizens living abroad suffer for it. As a US citizen living abroad, I think it's still preferable though.
- tzs 4y ago
  > If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. [...] so actually filing is somewhat unusual, and basically impossible to do before 15 April. Would this work? File in the US for an extension on filing. That gives you until October 15 to file. That doesn't give you an extension on paying, so by April 15th make an advanced payment of either what your US taxes would be without the foreign tax credit, or if you can reasonably make a conservative estimate your foreign taxes what you US taxes would be with that as your foreign tax. After you know for sure your foreign tax you can do your US taxes and get back however much you overpaid with your advanced payment. I suppose you could also file by April 15th without an advanced payment and without claiming the foreign tax credit, and then file an amended return after you do your foreign taxes to get back the overpayment.
  - anaisbetts 4y ago
iamjdg 4y ago
I’ve been a US expat in Canada for 21 years, and I can say the time and stress of US citizen based tax law is extreme. But every year I do it, send tons of info to the IRS, because I knew the laws, but I would love this burden being removed. I am not super wealthy, my net worth is ~$3 million which is from decades of a high savings/investment rate into primary retirement accounts and equity in my principal residence. On a side note, another draconian US expat tax law, the US will tax US citizens on capital gains over the US limit on the sale of your foreign principal residence. Crazy right. Don’t live the US, maybe never have, but if you have US citizenship, accidentally or not, or a green card, they can tax you on the sale of a principle residence located outside US jurisdiction. The US/Canada tax treaty is good in the sense I rarely pay double tax, except for some special circumstances (stock options), but it is a ton of paperwork, information, and stress that I didn’t mess something up. I worked in Germany for a couple of years, and when I wasn’t a Canadian tax resident (I am also a Canadian citizen) the Canadian Revenue Agency didn’t care about my German income and I didn’t have to file any information for it. It was bliss. But of course the US IRS cared. This tax filing years were nightmares.
- dionidium 4y ago
  > I am not super wealthy, my net worth is ~$3 million It's worth noting that this is the 96th percentile for net worth in the United States. Maybe by "super wealthy" we only mean the 97th, 98th, and 99th percentiles? Source: https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/
- ncmncm 4y ago
  Wondering if renouncing US citizenship relieves this particular indignity. Retroactively, one might hope...
  - jonp888 4y ago
    The traditional solution of the US government to prevent this was to make you pay thousands of dollars to do it. So much that Germany, which normally doesn't allow dual citizenship, would make an exception on the basis that it was financially impossible for low earners. They've now come up with an even better solution, which is to force you to go to an in person appointment, but also to ban you from doing so due to covid. Problem solved!
wrp 4y ago
This seems to be an appropriate thread to ask, how is the US Exit Tax not a human rights violation? By birth, US citizens are considered the property of the US government and have to purchase their freedom.

22 points by voisin 4y ago

I've always wondered if most expats are Democrats? Every US election the media tries to find Republicans living in the Netherlands and aside from a GOP donor ambassador they always fail.

ehvatum 4y ago
The backpackers are, the patent holders and grizzled founders are sometimes not. It was super fun walking the streets in NL wearing a maga hat back in early 2016! I don’t recall a single negative reaction. By day, lots of interested conversation. By night, “grab ‘em by the pussy, American! Woohoo!”
- kurupt213 4y ago
  When you’re rich, they let you
mbg721 4y ago
It doesn't matter, there are so few of them, they can be a stuffed-animal for either party to beat. If rule-of-law were really on the menu, they wouldn't have left.

superchroma 4y ago

I have often found it puzzling how the US taxes citizens working in other countries for non-US companies.

988747 4y ago
That’s because they can. Every country in the world would gladly do the same (Who doesn’t like some extra money?), they just lack the economic and military power the US have to enforce it.
- goosedragons 4y ago
  I don't think so. Do you think Britain taxed individuals living outside their jurisdiction pre-WWII when they were top dog? The US has also been doing this long before they were a superpower. Its been done for over a 100 years.
  - voisin 4y ago
    It’s been done this way since the revolutionary war. It was meant as a punishment for any American born defector to the British. It is still a punishment. But worse, it hurts American competitiveness abroad. Go to Hong Kong, Dubai, Singapore, etc, and you will find tons of British, Australians, Canadians, etc etc. but only a very small number of Americans relative to the populations.
    - bruceb 4y ago
      Other countries have to send their citizens abroad to find work isnt the most compelling argument.
      - voisin 4y ago
        “Have to”? I am referring to investment bankers, lawyers, business owners. These are people who, because they have the flexibility to live anywhere and pay local taxes, move to these areas to take advantage of local opportunities, and the vast majority end up restricting those earnings in their home country later in life. It is a huge opportunity, similar to manifest destiny.
        bruceb 4y ago
        Won't someone think about the bankers and the lawyers! It is a wonder why the people have not risen up and demanded these groups pay no taxes. Jest aside, you pointed out that indeed these expats return. The argument is they benefited from the US before they left and will benefit when they come back. Why should they pay no taxes and expect to watlz back in whenever they please without having paid something to keep the country running. They also expect the country to send seal team 6 if they get abducted. There might be some valid points about the level of tax liability, but to think people should pay no tax on foreign earning is absurd.
bruceb 4y ago
Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas.
- Majromax 4y ago
  > Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas. Other countries don't seem to have a problem extending consular assistance to their overseas citizens.
  - 7steps2much 4y ago
    The real question is, does the US provide all the consular services to its citizens for free because of the taxation? I know that a lot of other countries levy fees on their citizens for some services, especially those that are "nice to have" but not all that important.
  - Pulcinella 4y ago
    The US government also actually tends to do a bad job* about things like this (i.e. evacuating citizen’s from foreign countries). So you have to pay the taxes but probably can’t count on the government to help. Now, I actually think all US citizens should pay their taxes, but it should be far more fair and reasonable than it currently is (we are basically just creating massive PITA for people while probably not catching offshore millionaires/billionaires.) The fact that you are forced to pay taxes but then will have to try to hitch a ride out of the country with Canada is unacceptable. * https://travel.state.gov/content/travel/en/international-travel/emergencies/what-state-dept-can-cant-do-crisis.html https://travel.state.gov/content/travel/en/international-tra... https://www.nytimes.com/2022/02/16/us/politics/us-evacuation-ukraine-kabul.html https://www.nytimes.com/2022/02/16/us/politics/us-evacuation...
- superchroma 4y ago
  Jesus, man, consular assistance should not be contingent on income. That's a disgusting idea.

anon291 4y ago

The supreme court applies the law. I don't understand where this idea has come from that the court ought to be the provider of novel 'fair' legislation (as opposed to the mean legislation proposed by Congress) or the decider of punishments. This law is set by elected members of Congress. It is their duty to provide proper punishments for it or to scrap it altogether. It is up to the president to show mercy when someone faces a trial like this through his power of clemency. Contrary to this article placing the blame solely with the judiciary, a case like this starts with the federal government starting a case. They don't have to. The executive is the real one punishing us expats. Stop making the court out to be some dictator.

aidenn0 4y ago
Indeed, if the recent decisions by the supreme court have taught me anything, it's that Congress has been incredibly ineffective at passing legislation over the past 40 years.
- kurupt213 4y ago
  It took the recent decisions? Congress has almost completely abdicated its responsibility for decades
- someguydave 4y ago
  One reason for this is because the Supreme Court has deferred to allowing a great deal of legislating in the Executive. Congress passes "blank check" laws that require unelected career bureaucrats to make law ("regulation") with minimal oversight. If the Supreme Court slowly disallows this, then Congress will eventually be forced to vote on controversial issues again.
  - aidenn0 4y ago
    I don't think there's anything in the constitution that prevents Congress from delegating their power. I don't think the authors anticipated that elected officials would want to give away their power.

andrew_eu 4y ago

The tax deduction for non-resident Americans is, of course, a little more complicated than the article suggests. With the disclaimer that I'm not a tax professional and this isn't tax advice, there are two options: for income up to some threshold (around 120k) it can be "excluded," basically a deduction on your AGI, with anything above that threshold taxed at the higher bracket; the other option is to basically treat taxes paid to foreign governments as a tax credit (with no threshold). If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. The fun twist: many countries in Europe have a tax system that doesn't assume everyone pays TurboTax, so actually filing is somewhat unusual, and basically impossible to do before 15 April. To find a European tax professional isn't always easy, and if you tell them you're an American they often back off, knowing your case is nightmarishly difficult. And if you do pay some US taxes still (e.g. capital gains on stocks still in a US account) then you're required to at least declare it on your European tax statement -- which itself must be submitted before you know how much US taxes you pay. The pool of recursion-ready tax advisors is unfortunately very small, and US citizens living abroad suffer for it. As a US citizen living abroad, I think it's still preferable though.

tzs 4y ago
> If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. [...] so actually filing is somewhat unusual, and basically impossible to do before 15 April. Would this work? File in the US for an extension on filing. That gives you until October 15 to file. That doesn't give you an extension on paying, so by April 15th make an advanced payment of either what your US taxes would be without the foreign tax credit, or if you can reasonably make a conservative estimate your foreign taxes what you US taxes would be with that as your foreign tax. After you know for sure your foreign tax you can do your US taxes and get back however much you overpaid with your advanced payment. I suppose you could also file by April 15th without an advanced payment and without claiming the foreign tax credit, and then file an amended return after you do your foreign taxes to get back the overpayment.
- anaisbetts 4y ago

iamjdg 4y ago

I’ve been a US expat in Canada for 21 years, and I can say the time and stress of US citizen based tax law is extreme. But every year I do it, send tons of info to the IRS, because I knew the laws, but I would love this burden being removed. I am not super wealthy, my net worth is ~$3 million which is from decades of a high savings/investment rate into primary retirement accounts and equity in my principal residence. On a side note, another draconian US expat tax law, the US will tax US citizens on capital gains over the US limit on the sale of your foreign principal residence. Crazy right. Don’t live the US, maybe never have, but if you have US citizenship, accidentally or not, or a green card, they can tax you on the sale of a principle residence located outside US jurisdiction. The US/Canada tax treaty is good in the sense I rarely pay double tax, except for some special circumstances (stock options), but it is a ton of paperwork, information, and stress that I didn’t mess something up. I worked in Germany for a couple of years, and when I wasn’t a Canadian tax resident (I am also a Canadian citizen) the Canadian Revenue Agency didn’t care about my German income and I didn’t have to file any information for it. It was bliss. But of course the US IRS cared. This tax filing years were nightmares.

dionidium 4y ago
> I am not super wealthy, my net worth is ~$3 million It's worth noting that this is the 96th percentile for net worth in the United States. Maybe by "super wealthy" we only mean the 97th, 98th, and 99th percentiles? Source: https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/
ncmncm 4y ago
Wondering if renouncing US citizenship relieves this particular indignity. Retroactively, one might hope...
- jonp888 4y ago
  The traditional solution of the US government to prevent this was to make you pay thousands of dollars to do it. So much that Germany, which normally doesn't allow dual citizenship, would make an exception on the basis that it was financially impossible for low earners. They've now come up with an even better solution, which is to force you to go to an in person appointment, but also to ban you from doing so due to covid. Problem solved!

wrp 4y ago

This seems to be an appropriate thread to ask, how is the US Exit Tax not a human rights violation? By birth, US citizens are considered the property of the US government and have to purchase their freedom.