6 ms·

This law / legal situation is mind boggling. “At issue, as many American expat critics of FATCA are quick to point out, is the fact that the U.S.'s citizenship

This law / legal situation is mind boggling. “At issue, as many American expat critics of FATCA are quick to point out, is the fact that the U.S.'s citizenship-based tax regime – famously unique in the world, apart from Eritrea – obliges anyone born in the U.S. to file tax returns every year, and potentially to pay U.S. taxes and even penalties for failing to file such documents as Foreign Bank Account Reports, even if they have never lived in the U.S., or earned money there.”

spywaregorilla 4y ago
Why is this mind boggling?
- Shank 4y ago
  Taxes are for social services and benefit of the public. If you never experience those benefits and never use any social services, why should you be forced to pay those taxes?
  - poyes99680 4y ago
    > If you never experience those benefits and never use any social services, why should you be forced to pay those taxes? That describes way more people than overseas US citizens.
  - spywaregorilla 4y ago
    Because you are reserving the right to obtain them with your citizenship? If you want to declare that you're not going to use them (abandoning your citizenship), you don't need to pay taxes.
    - olliej 4y ago
      But you are being required to pay money to drop your citizenship, so it's a tax being charged to people who have no other interaction with the US.
      - spywaregorilla 4y ago
        Not much money and it's a controversial fee that is being reduced for the very same thinking that it is unreasonable
    - TechBro8615 4y ago
      Then why should we give it back to you when you come back? If you could just turn your citizenship on and off with no penalty, it wouldn't be fair to the people who stay in the US if those who leave could just stop paying taxes and then come back whenever they want. And if things don't go well in the US, those who stayed are stuck but those who left have another option. So them not paying taxes to the US would be like having their cake and eating it too. They could leave and stop fulfilling all their obligations, but with the option to come back whenever.
      - hervature 4y ago
        Because that’s not how it works? If you give up your citizenship, it is irreversible. You’ll need to immigrate like you never were.
        alwayslikethis 4y ago
        It's actually harder. I think when you apply for a visa, they'll make a special note if you once gave up your citizenship. Legislation to never admit entry to expatriates have been proposed before.
        int_19h 4y ago
        It's not just when applying for visa; it comes up in all kinds of laws. For example, 18 USC § 922(d)(7): "It shall be unlawful for any person to sell or otherwise dispose of any firearm or ammunition to any person knowing or having reasonable cause to believe that such person ... who, having been a citizen of the United States, has renounced his citizenship" And yes, this is actively enforced as part of the federal background check system. Ironically, legal non-citizen residents can lawfully purchase firearms, even on a student or a work visa (although there are more hoops to jump through).
        ilammy 4y ago
        Quite a lot of countries have a fast-track for restoring citizenship if you had one. Not on the “when you feel like it” basis, but often without onerous requirements of foreigner naturalization.
  - ericmay 4y ago
    If I had to guess it’s about money laundering and general tax avoidance versus not getting services. If you make $100,000/year or so while abroad if I recall correctly you don’t owe any taxes. The US will also actually come save you, not that this is necessarily “worth the cost”.
    - davchana 4y ago
      Department of state always semd bill (although most of the time doesn't persue it). I think one still need to file the return ( no owing) the tax return even under the threshold.
  - ilammy 4y ago
    Arguably, US Navy power projection services are provided worldwide.
    - olliej 4y ago
      I'd be interested in seeing how frequently the US government "saves" accidental Americans around the world.
      - deleted 4y ago
        [deleted]
      - kube-system 4y ago
        If we’re talking about the navy’s power projection, the routine benefits are in reliable global trade, not random people being “saved”.
    - to11mtm 4y ago
      FBOW Navy as well as AF/Army (At least in Europe and parts of Oceania) provide power protection that may or may not contribute to economic prosperity.
    - theonething 4y ago
      Jessica Buchanan was sure glad she was a tax paying US citizen when she was kidnapped by Somali gangsters and rescued by a SEAL team.[0] I saw interviews about this and the Danish kidnap victim rescued with Ms. Buchanan said something to the effect of "the best thing that happened to me given this scenario was getting kidnapped with an American." Citizenship has its privileges. I've been an US expat and will likely be one in the future and have no problem with paying taxes as a citizen either here or abroad. [0] https://en.wikipedia.org/wiki/Rescue_of_Jessica_Buchanan_and_Poul_Hagen_Thisted https://en.wikipedia.org/wiki/Rescue_of_Jessica_Buchanan_and...
  - bdcravens 4y ago
    Should those without children be required to pay the school portion of property taxes?
    - arcticbull 4y ago
      Sure, if they're residents. Not if they live in Mongolia where they're paying for Mongolian schools via Mongolian taxes. The real question you should be asking is why are you ok double-taxing non-resident citizens?
      - ghaff 4y ago
        Most school expenses come from local property taxes and most of the rest from state taxes. Very little comes from federal taxes.
        arcticbull 4y ago
        Indeed, but I strongly suspect the parent was positioning this as a thought exercise. In that vein, do you think it's right for the town in which you lived right before moving abroad to charge you property taxes on a home you buy in a foreign country? What if there was an exemption on the first $250K in property value? After all you may one day return to your home town and they were providing bus service while you were gone... What about your home town charging you property taxes on the place you buy in the big city a few years after you move away for college? After all your family is still there and those schools won't fund themselves.
  - osullip 4y ago
    Citizenship of all countries comes with some rules and expectations on the holder. In some cases it is national service, others it is a requirement to vote, in the U.S. case it is to declare and pay taxes. I would expect that most people like the idea of the option to live and work in the U.S. and keep their citizenship even if not residing there. I think it is a difficult call to renounce citizenship but if the tax requirements are onerous on the individual they are least have the choice.
    - ramraj07 4y ago
      Citizenship of _some_ countries come with rules and expectations on the holder. As far as I can tell, if I leave India for good I don’t owe India anything after 1.5 years. That sounds correct.
      - arcticbull 4y ago
        Not exactly, you still have rules and expectations should you return that are not imposed on non-citizen visitors. They also may choose to, in the future, impose restrictions on you but these are (unless you're Uncle Sam) very difficult to enforce on expats.
      - davchana 4y ago
        True. Everything has up & downside. The downside of Indian Citizenship is you can't have two citizenships. (Although OCI card gives you almost every right except voting, gov jobs etc).
        int_19h 4y ago
        Most countries that don't recognize dual citizenship also don't prohibit it; they just treat you as their citizen regardless of what other citizenship you might have. Is that not the case with India?
        davchana 4y ago
        Nope, India specifically prohibits it, and expect its citizens to renounce Indian one in 6 months or less from acquiring other one. No repercussions as long as you don't go to India or deal with Indian Embassy (which almost every ex Indian has to, family, relatives, stuff in India). So for them, the process is, get US naturalization certificate. The 6 month clock starts. Get US passport (its mandatory to cancel the Indian passport). Then apply for Indian Renounce process (4 months). Now, if you want to go to India, apply for 30 day e-visa (a week at most).
  - moeris 4y ago
    Many of us pay for government services we will never use, though. As a man, for example, I'll never be a recipient of WIC. By your logic, I should never have to pay for these benefits. However, that seems wrong. Even if I never use WIC, Social security, government housing, addiction recovery programs, etc. I should still pay for them because it's good for society as a whole. Plus, there's the fact that even if you're not living in the US doesn't mean you're not benefiting from citizenship. You still enjoy the privilege of American consulates, being able to travel to certain countries, and certain limited protections and privileges. So it's not like it's _nothing_.
    - arcticbull 4y ago
      Citizenship-based taxation was brought in as a way of punishing deserters during the civil war and simply never dropped. It doesn't make sense to tax citizens who aren't resident when you are also taxing residents who aren't citizens. That's having your cake and eating it too - which I can only imagine is part of the reason no other country on Earth does this (except Eritrea, who obviously cannot enforce). If resident aliens have to pay taxes while resident, and can stop when they leave - doesn't it also make sense for resident citizens to be afforded the same luxury? The state department operates on a cost-recovery basis anyways so if you avail yourself of emergency or consular services you get mailed a bill no matter what. [edit] Remember if you live abroad you have to pay taxes to that government too! So the question is why is it a fair impingement on your freedom to live abroad to have to pay taxes to two different governments simply because you're an American? You're being punished as a de facto civil war deserter! The war is over, friend. The North won! Let freedom ring! lol. [edit2] As @drewcoo pointed out I used the term 'deserter' inappropriately in context, I should have said 'deadbeats.' I was in fact referring to citizens who left the United States around the time of the war and the way they were viewed by congress as not paying their fair share while retaining a vested interest in the outcome of the war. It was a colloquialism used as flourish that was wrong in context. h/t.
      - pokerhobo 4y ago
        https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/fore...
  - deleted 4y ago
    [deleted]
  - refurb 4y ago
    If you’re a US citizen you can move back get welfare or qualify for Medicaid if low income. Or get a heavily subsidized healthcare plan. All paid for with tax dollars. Not saying I agree with paying US taxes if not living there, but there are financial benefits to US citizenship. Compare this to say Canada, where you can leave, never pay taxes, then retire in Canada with free healthcare that you never paid into. It’s “privatize the gains, socialize the losses”. And to be honest, most Americans living outside the US will pay no US taxes. It’s just the filing burden that is the issue.
  - bigthymer 4y ago
    The US government will look out for your interests if an incident goes down in your country of residence. A rare occurrence for most but still a service that some may end up needing\using.
    - arcticbull 4y ago
      ... and then bill you. State operates on a cost-recovery basis.
      - theonething 4y ago
        At least there is the option to get rescued and then billed for it. Non-citizens don't get rescued, evacuated, etc by the US at all.
        eesmith 4y ago
        Other countries provide repatriation services too, for their citizens. Somehow the UK does it without subjecting all British citizens worldwide to UK taxes. I read once that UK repatriation was funded as part of the passport fee, but can't verify it. In any case, if this were the justification for the policy, it might be good to know how much it costs the US vs. what extra revenue the US generate from this taxation, and the number of non-resident/non-passport holding Americans are also covered by this repatriation.
    - davchana 4y ago
      Only if one is not a citizen of country in trouble. Canadian (having Canadian Citizenship) living in Canada will not get rescued even if he holds US citizenship. Dual Citizenship, each country has full rights, laws & responsibilities for citizens on their own land.
- gghffguhvc 4y ago
  Not OP. I wouldn't use the word mind-boggling. Perhaps non-sensical, over-reaching or unfair. I have two USA born children under the age of 4. My wife and I are in USA on work VISAs. When we leave this year, we'll have to research all this stuff and file all the right paper work so my kids don't potentially have trouble ~16 years later.
  - osullip 4y ago
    They will also be able to apply for you to become citizens when they turn 21 via an Alien Relative Petition. They will likely not pay much tax between now and then so the cost of the opportunity (if you would ever consider living in the U.S. permanently) is minimal.
- klipt 4y ago
  It certainly makes it harder for US citizens to do business overseas. Puts them at a competitive disadvantage vs the citizens of pretty much any other country.
  - spywaregorilla 4y ago
    A business created by a US citizen does not need to pay US taxes. If by doing business you mean just having a job... sure I guess. If the taxes are significantly lower there?
    - Question50 4y ago
      Incorrect, as until the business reaches a certain size it is considered a Controlled Foreign Corporation [1]. In addition, it is subject to GILTI[2] (pronounced "guilty"). [1] https://www.investopedia.com/terms/c/cfc.asp https://www.investopedia.com/terms/c/cfc.asp [2] https://www.investopedia.com/global-intangible-low-taxed-income-gilti-definition-5097113 https://www.investopedia.com/global-intangible-low-taxed-inc...
      - spywaregorilla 4y ago
        shrug. find a business partner.
- tarotuser 4y ago
  [flagged]
bee_rider 4y ago
They shouldn’t complain too much. To make it more fair, we might just try to tax everyone! (Eagle screeching in the distance).
- judge2020 4y ago
  Just swap the tax requirement to "if you've ever traded in the US dollar this year". How else are they going to maintain the most stable world currency?
- eesmith 4y ago
  > Eagle screeching in the distance Fun fact: the "eagle screech" sound is actually that of a hawk. All too easy to make the analogy that the American (freedom) eagle is really an American (war) hawk.
  - bee_rider 4y ago
    Hawks are generally cooler than eagles. It is unfortunate that hawks became associated with war, they are just hunters — eagles are known to steal meals from other animals, which seems more warlike to me.
- LargoLasskhyfv 4y ago
  𝐍𝐎 𝐓𝐀𝐗𝐀𝐓𝐈𝐎𝐍 𝐖𝐈𝐓𝐇𝐎𝐔𝐓 𝐑𝐄𝐏𝐑𝐄𝐒𝐄𝐍𝐓𝐀𝐓𝐈𝐎𝐍!
benrbray 4y ago
One side effect of this inane policy is that it is becomes very difficult for US citizens living abroad to invest their money, due to the tax consequences of holding foreign stocks, as well as the fact that very few US exchanges are willing to open accounts for expats. I live in Japan, and holding Japanese stocks will get me in trouble with the US government, while holding US stocks can dramatically complicate my Japanese taxes. Because I reside outside the US, I cannot have a 401k or Roth IRA, but it is also impractical for me to take advantage of the Japanese equivalent (NISA) due to the prohibitive cost of correctly reporting my holdings to the US. In some cases there is also double taxation.
- refurb 4y ago
  Why can’t you have a Roth IRA? Japanese taxes?
  - Question50 4y ago
    Post-tax US retirement accounts (e.g., Roth-IRA/401K, etc.) are generally seen as normal investment accounts by the tax authorities in the US expat's country of residence. Therefore they offer no retirement tax benefits.
    - compsciphd 4y ago
      Roth's aren't as useful as people make them out. 1) In a traditional (vs a roth), you save taxes at your marginal rate today. 2) In a traditional (vs a roth), you save on state taxes today. 3) you can take those tax savings and invest them in a taxable account (or spend them on things you need to spend them on) 4) In retirement, if your income is lower than your income today, your tax rate will be lower, so the savings of not paying on disbursments from the Roth will be lower. 5) In retirement, you have more ability to choose where you live, i.e. can live in a tax free state (or move overseas) and hence just have federal tax liability on the disbursements (at a lower overall rate if income is lower). 6) A roth is a promise of a benefit in the future vs a traditional giving you a benefit today. It's hard to take away a benefit already given, while I don't expect the roth rules to adversely change, there's still risk. Now, a big benefit of the Roth is for people who can't save and are bad financial planners. "prepaying" the tax, even if its worse decision overall, is better than blowing the immediate tax savings of a traditional on "hookers and blow". Another big benefit of a roth is if one expects tax rates to severely rise, prepaying tax at a much lower rate vs a future possibly higher rate is a benefit (but one has to factor in the ability to get out of state taxes in future as well, so if your state tax rate is nearin 10%, does one expect federal future tax rate to really be 10% higher than today). Over a long period of time if one has high income in retirement, a Roth probably is better (even if the traditional tax savings are invested). However, at those income levels, I don't think it actually matters much as the difference wont be huge (in terms of savings/income). If one expects retirement income to be reduced relative to one's current income, traditionals become much more attractive.
highwayman47 4y ago
The intent of this law was to prevent wealthy individuals from avoiding taxes through offshore accounts. I'm sure there are dozens of threads on HN lamenting this very practice.

spywaregorilla 4y ago

Why is this mind boggling?

Shank 4y ago
Taxes are for social services and benefit of the public. If you never experience those benefits and never use any social services, why should you be forced to pay those taxes?
- poyes99680 4y ago
  > If you never experience those benefits and never use any social services, why should you be forced to pay those taxes? That describes way more people than overseas US citizens.
- spywaregorilla 4y ago
  Because you are reserving the right to obtain them with your citizenship? If you want to declare that you're not going to use them (abandoning your citizenship), you don't need to pay taxes.
  - olliej 4y ago
    But you are being required to pay money to drop your citizenship, so it's a tax being charged to people who have no other interaction with the US.
    - spywaregorilla 4y ago
      Not much money and it's a controversial fee that is being reduced for the very same thinking that it is unreasonable
  - TechBro8615 4y ago
    Then why should we give it back to you when you come back? If you could just turn your citizenship on and off with no penalty, it wouldn't be fair to the people who stay in the US if those who leave could just stop paying taxes and then come back whenever they want. And if things don't go well in the US, those who stayed are stuck but those who left have another option. So them not paying taxes to the US would be like having their cake and eating it too. They could leave and stop fulfilling all their obligations, but with the option to come back whenever.
    - hervature 4y ago
      Because that’s not how it works? If you give up your citizenship, it is irreversible. You’ll need to immigrate like you never were.
      - alwayslikethis 4y ago
        It's actually harder. I think when you apply for a visa, they'll make a special note if you once gave up your citizenship. Legislation to never admit entry to expatriates have been proposed before.
        int_19h 4y ago
        It's not just when applying for visa; it comes up in all kinds of laws. For example, 18 USC § 922(d)(7): "It shall be unlawful for any person to sell or otherwise dispose of any firearm or ammunition to any person knowing or having reasonable cause to believe that such person ... who, having been a citizen of the United States, has renounced his citizenship" And yes, this is actively enforced as part of the federal background check system. Ironically, legal non-citizen residents can lawfully purchase firearms, even on a student or a work visa (although there are more hoops to jump through).
      - ilammy 4y ago
        Quite a lot of countries have a fast-track for restoring citizenship if you had one. Not on the “when you feel like it” basis, but often without onerous requirements of foreigner naturalization.
- ericmay 4y ago
  If I had to guess it’s about money laundering and general tax avoidance versus not getting services. If you make $100,000/year or so while abroad if I recall correctly you don’t owe any taxes. The US will also actually come save you, not that this is necessarily “worth the cost”.
  - davchana 4y ago
    Department of state always semd bill (although most of the time doesn't persue it). I think one still need to file the return ( no owing) the tax return even under the threshold.
- ilammy 4y ago
  Arguably, US Navy power projection services are provided worldwide.
  - olliej 4y ago
    I'd be interested in seeing how frequently the US government "saves" accidental Americans around the world.
    - deleted 4y ago
      [deleted]
    - kube-system 4y ago
      If we’re talking about the navy’s power projection, the routine benefits are in reliable global trade, not random people being “saved”.
  - to11mtm 4y ago
    FBOW Navy as well as AF/Army (At least in Europe and parts of Oceania) provide power protection that may or may not contribute to economic prosperity.
  - theonething 4y ago
    Jessica Buchanan was sure glad she was a tax paying US citizen when she was kidnapped by Somali gangsters and rescued by a SEAL team.[0] I saw interviews about this and the Danish kidnap victim rescued with Ms. Buchanan said something to the effect of "the best thing that happened to me given this scenario was getting kidnapped with an American." Citizenship has its privileges. I've been an US expat and will likely be one in the future and have no problem with paying taxes as a citizen either here or abroad. [0] https://en.wikipedia.org/wiki/Rescue_of_Jessica_Buchanan_and_Poul_Hagen_Thisted https://en.wikipedia.org/wiki/Rescue_of_Jessica_Buchanan_and...
- bdcravens 4y ago
  Should those without children be required to pay the school portion of property taxes?
  - arcticbull 4y ago
    Sure, if they're residents. Not if they live in Mongolia where they're paying for Mongolian schools via Mongolian taxes. The real question you should be asking is why are you ok double-taxing non-resident citizens?
    - ghaff 4y ago
      Most school expenses come from local property taxes and most of the rest from state taxes. Very little comes from federal taxes.
      - arcticbull 4y ago
        Indeed, but I strongly suspect the parent was positioning this as a thought exercise. In that vein, do you think it's right for the town in which you lived right before moving abroad to charge you property taxes on a home you buy in a foreign country? What if there was an exemption on the first $250K in property value? After all you may one day return to your home town and they were providing bus service while you were gone... What about your home town charging you property taxes on the place you buy in the big city a few years after you move away for college? After all your family is still there and those schools won't fund themselves.
- osullip 4y ago
  Citizenship of all countries comes with some rules and expectations on the holder. In some cases it is national service, others it is a requirement to vote, in the U.S. case it is to declare and pay taxes. I would expect that most people like the idea of the option to live and work in the U.S. and keep their citizenship even if not residing there. I think it is a difficult call to renounce citizenship but if the tax requirements are onerous on the individual they are least have the choice.
  - ramraj07 4y ago
    Citizenship of _some_ countries come with rules and expectations on the holder. As far as I can tell, if I leave India for good I don’t owe India anything after 1.5 years. That sounds correct.
    - arcticbull 4y ago
      Not exactly, you still have rules and expectations should you return that are not imposed on non-citizen visitors. They also may choose to, in the future, impose restrictions on you but these are (unless you're Uncle Sam) very difficult to enforce on expats.
    - davchana 4y ago
      True. Everything has up & downside. The downside of Indian Citizenship is you can't have two citizenships. (Although OCI card gives you almost every right except voting, gov jobs etc).
      - int_19h 4y ago
        Most countries that don't recognize dual citizenship also don't prohibit it; they just treat you as their citizen regardless of what other citizenship you might have. Is that not the case with India?
        davchana 4y ago
        Nope, India specifically prohibits it, and expect its citizens to renounce Indian one in 6 months or less from acquiring other one. No repercussions as long as you don't go to India or deal with Indian Embassy (which almost every ex Indian has to, family, relatives, stuff in India). So for them, the process is, get US naturalization certificate. The 6 month clock starts. Get US passport (its mandatory to cancel the Indian passport). Then apply for Indian Renounce process (4 months). Now, if you want to go to India, apply for 30 day e-visa (a week at most).
- moeris 4y ago
  Many of us pay for government services we will never use, though. As a man, for example, I'll never be a recipient of WIC. By your logic, I should never have to pay for these benefits. However, that seems wrong. Even if I never use WIC, Social security, government housing, addiction recovery programs, etc. I should still pay for them because it's good for society as a whole. Plus, there's the fact that even if you're not living in the US doesn't mean you're not benefiting from citizenship. You still enjoy the privilege of American consulates, being able to travel to certain countries, and certain limited protections and privileges. So it's not like it's _nothing_.
  - arcticbull 4y ago
    Citizenship-based taxation was brought in as a way of punishing deserters during the civil war and simply never dropped. It doesn't make sense to tax citizens who aren't resident when you are also taxing residents who aren't citizens. That's having your cake and eating it too - which I can only imagine is part of the reason no other country on Earth does this (except Eritrea, who obviously cannot enforce). If resident aliens have to pay taxes while resident, and can stop when they leave - doesn't it also make sense for resident citizens to be afforded the same luxury? The state department operates on a cost-recovery basis anyways so if you avail yourself of emergency or consular services you get mailed a bill no matter what. [edit] Remember if you live abroad you have to pay taxes to that government too! So the question is why is it a fair impingement on your freedom to live abroad to have to pay taxes to two different governments simply because you're an American? You're being punished as a de facto civil war deserter! The war is over, friend. The North won! Let freedom ring! lol. [edit2] As @drewcoo pointed out I used the term 'deserter' inappropriately in context, I should have said 'deadbeats.' I was in fact referring to citizens who left the United States around the time of the war and the way they were viewed by congress as not paying their fair share while retaining a vested interest in the outcome of the war. It was a colloquialism used as flourish that was wrong in context. h/t.
    - pokerhobo 4y ago
      https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/fore...
- deleted 4y ago
  [deleted]
- refurb 4y ago
  If you’re a US citizen you can move back get welfare or qualify for Medicaid if low income. Or get a heavily subsidized healthcare plan. All paid for with tax dollars. Not saying I agree with paying US taxes if not living there, but there are financial benefits to US citizenship. Compare this to say Canada, where you can leave, never pay taxes, then retire in Canada with free healthcare that you never paid into. It’s “privatize the gains, socialize the losses”. And to be honest, most Americans living outside the US will pay no US taxes. It’s just the filing burden that is the issue.
- bigthymer 4y ago
  The US government will look out for your interests if an incident goes down in your country of residence. A rare occurrence for most but still a service that some may end up needing\using.
  - arcticbull 4y ago
    ... and then bill you. State operates on a cost-recovery basis.
    - theonething 4y ago
      At least there is the option to get rescued and then billed for it. Non-citizens don't get rescued, evacuated, etc by the US at all.
      - eesmith 4y ago
        Other countries provide repatriation services too, for their citizens. Somehow the UK does it without subjecting all British citizens worldwide to UK taxes. I read once that UK repatriation was funded as part of the passport fee, but can't verify it. In any case, if this were the justification for the policy, it might be good to know how much it costs the US vs. what extra revenue the US generate from this taxation, and the number of non-resident/non-passport holding Americans are also covered by this repatriation.
  - davchana 4y ago
    Only if one is not a citizen of country in trouble. Canadian (having Canadian Citizenship) living in Canada will not get rescued even if he holds US citizenship. Dual Citizenship, each country has full rights, laws & responsibilities for citizens on their own land.
gghffguhvc 4y ago
Not OP. I wouldn't use the word mind-boggling. Perhaps non-sensical, over-reaching or unfair. I have two USA born children under the age of 4. My wife and I are in USA on work VISAs. When we leave this year, we'll have to research all this stuff and file all the right paper work so my kids don't potentially have trouble ~16 years later.
- osullip 4y ago
  They will also be able to apply for you to become citizens when they turn 21 via an Alien Relative Petition. They will likely not pay much tax between now and then so the cost of the opportunity (if you would ever consider living in the U.S. permanently) is minimal.
klipt 4y ago
It certainly makes it harder for US citizens to do business overseas. Puts them at a competitive disadvantage vs the citizens of pretty much any other country.
- spywaregorilla 4y ago
  A business created by a US citizen does not need to pay US taxes. If by doing business you mean just having a job... sure I guess. If the taxes are significantly lower there?
  - Question50 4y ago
    Incorrect, as until the business reaches a certain size it is considered a Controlled Foreign Corporation [1]. In addition, it is subject to GILTI[2] (pronounced "guilty"). [1] https://www.investopedia.com/terms/c/cfc.asp https://www.investopedia.com/terms/c/cfc.asp [2] https://www.investopedia.com/global-intangible-low-taxed-income-gilti-definition-5097113 https://www.investopedia.com/global-intangible-low-taxed-inc...
    - spywaregorilla 4y ago
      shrug. find a business partner.
tarotuser 4y ago
[flagged]

bee_rider 4y ago

They shouldn’t complain too much. To make it more fair, we might just try to tax everyone! (Eagle screeching in the distance).

judge2020 4y ago
Just swap the tax requirement to "if you've ever traded in the US dollar this year". How else are they going to maintain the most stable world currency?
eesmith 4y ago
> Eagle screeching in the distance Fun fact: the "eagle screech" sound is actually that of a hawk. All too easy to make the analogy that the American (freedom) eagle is really an American (war) hawk.
- bee_rider 4y ago
  Hawks are generally cooler than eagles. It is unfortunate that hawks became associated with war, they are just hunters — eagles are known to steal meals from other animals, which seems more warlike to me.
LargoLasskhyfv 4y ago
𝐍𝐎 𝐓𝐀𝐗𝐀𝐓𝐈𝐎𝐍 𝐖𝐈𝐓𝐇𝐎𝐔𝐓 𝐑𝐄𝐏𝐑𝐄𝐒𝐄𝐍𝐓𝐀𝐓𝐈𝐎𝐍!

benrbray 4y ago

One side effect of this inane policy is that it is becomes very difficult for US citizens living abroad to invest their money, due to the tax consequences of holding foreign stocks, as well as the fact that very few US exchanges are willing to open accounts for expats. I live in Japan, and holding Japanese stocks will get me in trouble with the US government, while holding US stocks can dramatically complicate my Japanese taxes. Because I reside outside the US, I cannot have a 401k or Roth IRA, but it is also impractical for me to take advantage of the Japanese equivalent (NISA) due to the prohibitive cost of correctly reporting my holdings to the US. In some cases there is also double taxation.

refurb 4y ago
Why can’t you have a Roth IRA? Japanese taxes?
- Question50 4y ago
  Post-tax US retirement accounts (e.g., Roth-IRA/401K, etc.) are generally seen as normal investment accounts by the tax authorities in the US expat's country of residence. Therefore they offer no retirement tax benefits.
  - compsciphd 4y ago
    Roth's aren't as useful as people make them out. 1) In a traditional (vs a roth), you save taxes at your marginal rate today. 2) In a traditional (vs a roth), you save on state taxes today. 3) you can take those tax savings and invest them in a taxable account (or spend them on things you need to spend them on) 4) In retirement, if your income is lower than your income today, your tax rate will be lower, so the savings of not paying on disbursments from the Roth will be lower. 5) In retirement, you have more ability to choose where you live, i.e. can live in a tax free state (or move overseas) and hence just have federal tax liability on the disbursements (at a lower overall rate if income is lower). 6) A roth is a promise of a benefit in the future vs a traditional giving you a benefit today. It's hard to take away a benefit already given, while I don't expect the roth rules to adversely change, there's still risk. Now, a big benefit of the Roth is for people who can't save and are bad financial planners. "prepaying" the tax, even if its worse decision overall, is better than blowing the immediate tax savings of a traditional on "hookers and blow". Another big benefit of a roth is if one expects tax rates to severely rise, prepaying tax at a much lower rate vs a future possibly higher rate is a benefit (but one has to factor in the ability to get out of state taxes in future as well, so if your state tax rate is nearin 10%, does one expect federal future tax rate to really be 10% higher than today). Over a long period of time if one has high income in retirement, a Roth probably is better (even if the traditional tax savings are invested). However, at those income levels, I don't think it actually matters much as the difference wont be huge (in terms of savings/income). If one expects retirement income to be reduced relative to one's current income, traditionals become much more attractive.

highwayman47 4y ago

The intent of this law was to prevent wealthy individuals from avoiding taxes through offshore accounts. I'm sure there are dozens of threads on HN lamenting this very practice.