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This has nothing to do with thinking taxes are evil. This has everything to do with the fact that the US tax regime on overseas Americans makes life miserable f
by arbuge 12y ago
This has nothing to do with thinking taxes are evil. This has everything to do with the fact that the US tax regime on overseas Americans makes life miserable for those expats. Oftentimes you finish up paying thousands of dollars for expensive tax help* only to demonstrate that your tax liability is $0 because foreign tax credits cancel out your foreign tax obligations. Besides all the difficulties with opening bank accounts as noted.
The solution is simple: the US needs to join the remaining 99% of the developed western world and switch to residence-based taxation instead of the current citizenship-based regime. In other words you tax people within your physical borders only (citizen or not), but suspend their tax obligations when they leave for as long as they leave, unless they still have income-producing assets within the borders of your country.
* Taxes overseas are not something you can just whip up Turbotax to handle. You oftentimes need to reconcile foreign tax statements with your US ones to compute tax credits. Worse, the foreign tax ones are rarely due on the same deadlines as the US ones, and foreign currencies need to be converted and so forth. The whole thing is difficult for most people but almost completely unworkable for entrepreneurs owning corporations overseas, owing to the need to file obscure and complex Controlled Foreign Corporation tax forms. Budget around $5,000 in tax prep fees per corporation for those, even if your corporation is a dormant LLC with no money passing through it.
- anigbrowl 12y agoI agree completely, but there are a lot of people on HN who live in the US, have no plans to depart, and just like to grumble about government overreach and upvote threads about it, as you can see elsewhere in this thread, and in previous threads on the same subject. In the same way there are threads twice each year about the change to/from daylight savings time which get lots of votes from people who hate the time change and wish it were abolished, including myself - look out for the next one in 5 weeks.