
The Law That Makes U.S. Expats Toxic - DanielBMarkham
http://www.wsj.com/article_email/the-law-that-makes-u-s-expats-toxic-1444330827-lMyQjAxMTI1MTE1MjkxOTI0Wj
======
patio11
Related rules have also made holding US accounts more difficult for Americans
overseas. I had my retirement accounts frozen by their previous custodian:
"Sorry, our regulator doesn't let us deal with Americans overseas." I'm unsure
whether that was sincerely "doesn't let us" or meant "would require a
paperwork burden we find unacceptable relative to the money you few guys make
us" but either way I was given thirty days to move very-much-on-the-books
money to another US financial firm.

It's annoying as heck, particularly as the burden falls mostly on folks who
are coloring squarely within the lines. I pay enough for an accountant that I
know with $10k of financial engineering the problem goes away for forever,
which makes me think the guys with $30 million in untaxed capital gains that
they're _really_ worried about are probably not getting meaningfully
inconvenienced by this policy.

~~~
TimSchumann
> with $10k of financial engineering the problem goes away for forever

As an American this upsets me greatly to hear. I feel it makes living abroad,
especially to families of average means in this country, almost an impossible
feat.

I also wonder if only leaving the country for short duration vacation/business
contributes to the "We're the best country ever!" mentality here and the "Wow,
look at those weirdos over in America" mentality abroad. Or maybe that's just
me paying too much attention to the news lately.

~~~
deong
If you're "of average means", then you can simply color within the lines, do
exactly what the law tells you to do, and almost certainly have no problems at
all. You only need the $10k to successfully cheat.

~~~
T-hawk
_Figuring out_ "exactly what the law tells you to do" is the tricky part. The
law merely prescribes the step-by-step instructions for each form. It will not
explain the emergent behavior that you'll need to know to optimize your way
through the system. It will not advise you ahead of time to do things like
spend no more than 30 days in the US to qualify as a foreign resident. You
wouldn't even know that's a relevant question to ask unless informed by a
suitable expert.

This sort of thing is the financial engineering that patio11 is talking about.
It's not cheating, it's doing what the system is meant to let you do, if only
you understood the best paths through the system.

I have a similar situation on a smaller scale. I live in one US state and work
in another. I file income tax for both, and there's a form that takes my tax
liability to my state of work and backs it out of my liability to my state of
residence. I wouldn't have known that form existed and would have just assumed
I had to pay full tax to both states, if not for TurboTax directing me to that
form.

The law will direct you how to mechanically comply, but it won't direct you
against complying in ways hurtful to yourself.

------
dot
"Unfortunately, no single member of Congress represents these American
constituents who together would rank, if a state, 12th in population size
after New Jersey and before Virginia. By virtue of living abroad, they are
second-class citizens, paying onerous tax burdens without representation."

Compare this to Switzerland that considers its citizens living abroad part of
the "fifth Switzerland" (there are 4 official language regions in
Switzerland). They can vote online (in some Kantons/States) and participate in
government programs to keep in touch with or learn about their roots. All
without taxation.

Of course, people here complain about citizens living abroad voting in local
elections... Representation without taxation!

~~~
mikeash
I don't agree with what that quote is saying. Americans living abroad can
still vote, and therefore are still represented. It's true that Americans
living abroad don't all have the _same_ representatives, since they're
represented by the elected officials from where they're registered to vote in
the US, but that's a far different thing from saying that they have no
representation at all.

~~~
Broken_Hippo
I'm an american living in Norway. I can vote for president, sure. Supposedly I
am allowed to vote in the district I last lived in the states, but trying to
get any of this done is difficult, especially since the state I live in
requires proof of address for voter registration. I understand the likelihood
of the representatives there to care about any issues I have is pretty
minimal. After all, americans living abroad are usually a minute slice of a
representative's voter base, even if we add up to quite a number overall. I
can probably get more accomplished through the embassy 10 hours travel time
away. On the other hand, I can vote in local elections here in Norway simply
by living legally here for 3 years:: I cannot vote in national elections until
I am a citizen. I do not have to be a citizen to hold local offices either - I
can be pretty active and involved if I choose. My situation comes down to
having theoretical representation in the states as compared to actual
representation here.

~~~
hysan
Yup, came here to say the same thing. Most people who haven't lived abroad for
a significant amount of time don't realize the difficulty of trying to vote.
In addition to that, the effectiveness of getting your voice heard by your
"representatives" (the reps from your last permanent residence in the US) is
much more difficult. I used to be able to pick up my phone and get myself
heard on issues that I cared about. Living abroad, the best you can hope for
is to contact your rep online and hope they care enough to give you a copy-
pasted response.

~~~
mikeash
Why can't you call your representative while living abroad?

~~~
hysan
Time difference + cost makes it almost prohibitively difficult in my case.

~~~
mikeash
Unless you sleep for 16 hours a day, your waking time will overlap with office
hours in Washington at some point. Skype can call to the US for very low cost.

~~~
hysan
Umm... do you even figure having a full time job into account? One that often
goes into the weekends? Also, you are painting broad strokes.

1\. With my time difference, I'd have to call my reps at a time when I'd
normally be getting ready to sleep just to catch them in the morning.

2\. In addition to that, not everyone has good internet connection. Especially
if you live in a remote area. Prior to a year ago, my internet connection at
home was fairly slow.

3\. Yes, I'll admit that I forgot about Skype since it wasn't reliable for me
in the first few years I was here. However, cost is cost. And having to manage
Skype Credits, which I'd never use elsewhere, is just an extra burden compared
to what it was like back in the States.

~~~
mikeash
I get that it's not quite as easy as it would be from the US. But
"prohibitively difficult" makes it sound like you're looking for excuses
rather than solutions. It might be a little harder but it's not exactly hard.
Twenty years ago you'd be paying painful long distance charges just to make
that call within the US.

~~~
hysan
Yes, I'll take back the prohibitively part since I had my internet upgraded a
year ago. But prior to that, it was. Can you think of a way to do so without
Skype? Or a reliable internet connection? Something that would be possible to
do from home since the only overlapping hours are after 9/10pm in my timezone?

And aside from that, it still does not detract from my original statement:

> the effectiveness of getting your voice heard by your "representatives" (the
> reps from your last permanent residence in the US) is __much more difficult
> __

It 's not just the contacting. It's also getting them to even care because you
don't live on US soil. None of what I'm saying is an excuse, and I don't know
why you seem intent on not acknowledging that it can be legitimately
difficult.

~~~
mikeash
If you have a phone at all, there are cards you can buy to make cheap
international calls by bouncing through a local number. If you don't have a
phone, well, you're stuck, but that's hardly characteristic of being abroad,
and you'd have the same trouble from a shack in the mountains in the US.

As for caring about your opinion, why would they care any less about you
compared to any other voter?

~~~
hysan
Never knew about or seen the phone card before. Good thing to remember, but do
they really have this in every country? But do note that with a shack in the
mountains, you'd probably have normal landline access and even possibly
cellular reception, so it's not a good comparison.

I said the caring part out of frustration with the current system. I've always
felt that if they couldn't map you to a US address within their jurisdiction,
then they'd know that you had less of an ability to influence other voters
around you via petitions, grassroots campaigns, etc. So discounting your
opinion wouldn't matter as much.

~~~
mikeash
I've seen those cards in lots of places, but I'll admit it's far from a
complete survey. People love to call home, and there are expats almost
everywhere, so I'd expect they'd be available just about everywhere.

As for petitions and such, I imagine that would be much less of a factor now
with the rise of social networks and such. But the views of our elected
officials may take some time to catch up to that.

------
rayiner
Is taxing expats abroad really a problem? First, there is a large baseline
exemption and most expats abroad don't pay U.S. taxes. Second, if you're
intending to permanently leave the U.S. why should you keep U.S. Citizenship?
And if you're intending to come back, is it really unfair to tax you?

American citizenship has real benefits, especially if you're rich enough to
pay expat taxes. The U.S. protects you and your property everywhere in the
world. My dad was stuck in Yemen when the civil war there broke out. His hotel
was shelled. That blue passport was his ticket out on a C-130.

~~~
rurban
It is a big one. Many expats had to resign their US citizenship to avoid this
silly law.

Double taxation only exists in Aethopia and the US.

Read this blog: [http://www.overseas-exile.com/](http://www.overseas-
exile.com/)

Protection? Yes, maybe that's the reason. To support the US military efforts
and budget.

On a side-note: If I would applied to the US greencard, and then decided to
move back to Germany, I would have to pay double income taxes. To Germany and
to the US. You don't even need to be US citizen.

~~~
deong
To be clear, you wouldn't actually _pay_ double-taxes (I think -- if you make
more than $100k, it depends on if the Germans and Americans have a treaty over
it, but most countries do, I think). You'd have to file twice, but the US side
would consist of forms that say you don't owe the US government anything
because you already paid more to the Germans than the US would have charged.

~~~
mike_hearn
Double taxation does happen pretty regularly, in particular, the USA often
doesn't recognise various types of European investment and pension instruments
and that causes complications. It's a really byzantine system that shouldn't
even exist at all. People who live outside the USA get nothing from the US
government, so they should pay no taxes. Every other country has this figured
out.

------
peripheral
I have experience dealing with this. I'm not a U.S. person, but I have a
company in a EU country that I co-own with a U.S. citizen (through personal
holding companies). Our (EU) bank first demanded we fill in 9 ridiculously
extensive forms detailing our entire business, then raised our bank fees from
5 to 105 euro per month, and then closed our account, giving us 2 weeks to
send our balance elsewhere. All within a year time.

It's extremely hard for us to find a new bank outside the U.S., and inside the
U.S. isn't easy either, since we're not a U.S. company, and do no business
there. Thank god we're liquidating this company anyway.

Doing consulting work, I actually did some work for the bank that closed our
account. And honestly, while I didn't get close to the departments that deal
with FATCA, I can't say I blame them for closing our account. You should see
how much of a headache all of the new regulations in the financial industry
are for the institutions.

~~~
throwaway13337
What country was this?

------
TillE
The government's actual "solution" to this problem has been to raise the fee
of renouncing citizenship, from $450 to $2,350. No problem for wealthy people
who want to avoid tax, but quite a large burden on everyone else.

I plan to become a German citizen eventually, because I'm probably going to
retire here. But thanks to Germany's disallowance of naturalized dual
citizenship and America's tax complexities, that requires weighing a huge
number of problems. At least my German bank (DKB) didn't kick me out.

~~~
pyvpx
I keep seeing people repeat this, yet I can't find any information to confirm
it. you can become a German citizen and still retain your US citizenship, from
everything I've read and everyone I've asked on the matter.

~~~
gambiting
It's probably similar to how most EU countries work - you can have two
citizenships,but both of those countries will only recognize their
citizenship. So for example - if you had a dual Polish/British citizenship,
Poland would only recognize your Polish citizenship. As long as you are in
Poland, you are a Polish citizen in the eyes of the law, and you would not be
officially treated as a foreigner, or even recignized as one. You could go to
the British embassy, but they would be unable to help in regards to Polish
law, because Polish law would not recognize your British citizenship. The same
works in reverse, if you were in Britain, only your British citizenship would
be recognized. However, if you traveled to any other country, you get to pick
which citizenship you want to use for official purposes.

~~~
onli
No. In Germany we had a big debate about doppelte staatsbügerschaft at the
beginning of the millenium. It was already a big undertaking to enable that at
all, for children born here from parent with foreign citizenship. It does not
go further than this, in general if you want to be german, you are german and
nothing else. There are some exceptions as listed above, but they should not
apply here.

------
morgante
It really doesn't make sense how the US is the only country which insists on
taxing their citizens, no matter where they live. It makes American labor less
competitive and promotes the insularity of American culture.

I'm living abroad and you can definitely see the impact of the US tax system
in the background of expats: Americans are severely underrepresented. The same
salary, when offered to a British expat and an American, is much less
attractive to the American because of the 30+% tax burden imposed.

~~~
deong
I'm also an American expat (Iceland), and for a lot of people, there will be
no difference except for inconvenience. If you make less than about $100,000
per year, you exclude that income from US taxes completely. You still have to
file a 1040, but you just declare the income on one line and negate it five
lines later. You send the IRS the completed form showing you owe $0 and you're
done.

And if you make more than $100,000 but live in a country that isn't a tax-
haven, you exclude that income too because you're only taxed on the difference
between the taxes you would owe the US government and the taxes you paid in
your home country. In Europe at least, you're almost always taxed at a higher
rate than the US would have taxed you, so again, you don't owe anything.
You're only looking at that 30% burden if you live in a country with no taxes
and you make millions of dollars (because again, the first $100k is excluded).

I agree it's a bit crazy that the US taxes worldwide income, but the practical
consequences seem pretty minimal. My bank has no problem with me as a
customer, or at least if they do, they haven't said anything to me about it.

~~~
ptaipale
> there will be no difference except for inconvenience.

There also appears to be a factor of risk. I'm not American but have had
Americans in my team. A slight procedural error, either by themselves or by
the IRS, can be a huge financial and legal problem, and expose the person to
litigation. It seems draconian and unfair to me.

Thus the practical consequences are more than minimal.

~~~
deong
I actually talked with an accountant in the US my first tax year living year,
and her advice was "don't use an accountant". I have no idea if this is true
or not, but according to her, the IRS's view is basically, "we know this is
complicated stuff, so do your best, and if you make a mistake, no big deal",
whereas if you hire an accountant and get something wrong, the assumption is
that you're trying to avoid taxes.

~~~
vidarh
It seems tax authorities can be surprisingly flexible as long as they don't
get a whiff of attempted tax evasion anywhere.

E.g. at some point around 2000 or so, I'd just moved to the UK, and my
personal finances were total chaos around the move. I'd sold quite a lot of
shares in Norway, and traded quite a bit on NASDAQ via a US brokerage account
(in 2000... yes, it got ugly; thankfully not that much money), and had income
from both UK and Norway split between employment and contracting in the same
tax year. And transfers back and forth between my UK, US and Norwegian
accounts... To make it more annoying, UK and Norway have different tax years
(Norway follow calendar year, UK does not). And to be honest my record-keeping
at the time was shoddy to the extreme.

So I wrote a letter to UK and Norwegian tax authorities where I set out the
details of my income, assets and losses as best I could. I told them I had no
clue how to accurately figure out exactly what was due (for the US it was easy
because it was all losses that year; the US brokerage account was just
relevant because it provided deductions for losses on my Norwegian taxes).
Gave them a number each that I thought was close to correct. Filled in my tax
returns with estimates (and explained in my letters that the numbers were
estimates). Both just accepted my estimate with no arguments, and no requests
for further documentation. No fines, or angry letters, or conflicting
estimated tax calculations or anything, which was what I feared when I sent it
all off.

~~~
deong
Yes. I moved to Iceland from Tennessee, a state with no state income tax.
However, I needed a permanent address where I was sure I'd get mail, because I
hadn't yet found a long-term rental in Iceland, so I did my Federal tax return
using my mom's address in Arkansas, where there is a state income tax.

A couple of years later, Arkansas wanted to know why I didn't pay them any tax
on my income from that year. I called someone, explained the situation, and he
just had me write a letter. Problem solved.

We're conditioned to fear the IRS because audits look horrible on
fictionalized TV shows. In reality, I think you're right. The IRS is just a
collection of people, and if you make an honest effort, the person on the
other end isn't out to ruin you.

~~~
ptaipale
> The IRS is just a collection of people, and if you make an honest effort,
> the person on the other end isn't out to ruin you.

Yes, they are people, but if what happens to you depends on people, the end
results can be rather unpredictable.

------
mark_l_watson
My wife and I had been planning on buying a home in either Belize or Costa
Rica but gave up this plans because of FACTA. Too bad because I really like
Central America and was looking forward to a major lifestyle change from
integrating into a local rural community.

Really a messed up law and messed up policy.

I do understand why our government did it: not good for the economy to have
older people spend their social security money in a relatively inexpensive
foreign country. I think the money laundering and anti terrorism arguments may
just be a smokescreen. This may also be just our government throwing their
weight around, bullying other countries.

~~~
dangjc
You really changed your life plans because of FATCA? Are there really no banks
in Central America willing to work with Americans? I'm in Singapore, and
though I've had to close one bank account due to it, I've had no problems with
my others. Filling out an FBAR the first year took me a couple of hours to
figure out, but every year after it took me like 10 minutes.

~~~
mark_l_watson
Yes I did. My wife and I had a pro and con sheet for reasons to move and
reasons not to move. FACTA tipped the scales, so to speak, and we decided to
not do move.

I am still a little sad about our decision though. I think that life is more
interesting living in different places, doing different kinds of jobs, etc.

BTW, I didn't want to move for financial reasons as much as wanting a low key
lifestyle. There is something about Central America that makes me feel great
just hanging around. Anyway, my wife and I live in the mountains of Central
Arizona, and I also love our lifestyle here, so life is good.

------
jbpritts
Major banks in the Czech Republic will not issue checking accounts to US
citizens because of the costs of FACTA. This leaves expats with large,
bureaucratic, formerly state-owned banks, like Ceska Sporitelna, which charge
exorbitant fees and have dubious customer service. FACTA is a big problem. It
is comical that major banks in Europe have a "No Americans" policy because of
this stupid legislation; it needs to end.

------
TazeTSchnitzel
I suspect that the U.S. taxing its citizens abroad has a lot to do with it
being the world's richest country and not wanting people (billionaires and
such particularly) to be able to easily escape their tax burden by moving
abroad.

~~~
matthewmacleod
Genuine question though – why should citizens living abroad (i.e. not using US
public services) pay for those services through taxation?

~~~
crdb
The key is to look at the current budget:
[https://en.wikipedia.org/wiki/2015_United_States_federal_bud...](https://en.wikipedia.org/wiki/2015_United_States_federal_budget#Outlays_by_budget_function)

It can be split into three families of spending:

\- defense, which benefits you globally via Pax Americana, free trade routes
etc. and should you require it, "Captain Phillips" style rescue.

\- "socialism", in the form of benefits that everybody has to pay for and that
you can receive if you trigger certain situations (retirement, unemployment,
etc.). Most expatriated Americans probably already benefitted from free
education which is included here.

\- "generally making the country locally better" (justice, environment, etc.).

Of these, only the latter doesn't directly impact Americans abroad. The first
benefits you wherever you are; foreign citizen somewhat benefit from Pax
Americana but there is no guarantee it will continue, whilst US citizen are
covered globally with much more certainty. The second is a form of compulsory
insurance for life developments that will probably coincide with repatriation.
But that's about 7% of the budget (rough back of the envelope).

The question is why don't other countries tax their citizen abroad? I think it
is mainly because they can't afford to enforce it (good luck, Estonia, forcing
JP Morgan to give you access to their New York client data). If they could,
with any degree of certainty, they would in a heartbeat. France proposes to do
it every 6 months.

~~~
rwallace
\- defense, which benefits you globally via Pax Americana,

This is, to put it mildly, a controversial claim.

\- Most expatriated Americans probably already benefitted from free education
which is included here.

When I point out the insanity of the law that denies free choice of public
schools, its defenders usually try to justify it by saying schools are funded
by local property tax rather than national income tax. Is this not the case?

~~~
crdb
Pax Americana started in WWII (which killed over 55 million people) and since
then, there has been no global conflict of a similar scale. Cf
[http://www.scaruffi.com/politics/massacre.html](http://www.scaruffi.com/politics/massacre.html)
(top result in DDG).

Whether you consider that global relatively free trade is not beneficial to
the rest of the world is up to you, but as a citizen of the rest of the world
who did benefit I'm quite glad the US did not go isolationist after WWII.

Regarding schools, whether the taxpayer's money is used appropriately is
another discussion, irrelevant here since Americans, through their elected
representatives, chose to spent the money in this way.

Funding-wise, last year's budget spent $100bn and this year wants $117bn on
the Federal end for "Education, Training, Employment and Social Services" (see
link above) of which $69bn in 2015 is for Education (see:
[http://www.ed.gov/news/press-releases/obama-
administration-2...](http://www.ed.gov/news/press-releases/obama-
administration-2015-budget-prioritizes-key-education-investments-provide-
opportunities-all-americans)).

------
gambiting
I said this before, but I will say it again - as a child, I dreamed of
emigrating to the US and getting a US citizenship. Nowadays, I would reject
one if anybody offered, and if I had one I would denounce it. Like the article
states - being American abroad is now seen as liability, and I am not
surprised Americans living abroad give up their citizenship just to stop
dealing with this nonsense.

~~~
Amezarak
I really find it hard to feel sympathetic about rich Americans (only applies
to income of 100k+) paying no more taxes than if they lived in America (live
in a country with higher income tax, pay US nothing, country with lower tax,
pay US the difference.)

This seems hardly worth 'denouncing' American citizenship. Can you explain?

I feel like threads like these really illustrate the difference between
someone on HN and the average person.

~~~
gambiting
It's not about America per se - I would feel the same way about any country. I
live and work in UK while being a Polish citizen. If Poland now asked me to
pay income tax in Poland based off my income in UK, I would be very very upset
- I already pay income tax in the UK, so paying it twice sounds absolutely
ridiculous. On the most basic level - Poland has absolutely no "right" to any
of that money. I would denounce my Polish citizenship over this if that was
the case. And US feels like they do have the right to the money of their
citizens, even if they made it abroad. Every single person I spoke to about
this said the exact same thing - the US tax system is stupid, and it's the
example of US behaving like it owns the world and its own citizens. Just
because it only targets "rich" people doesn't make it any less stupid.

~~~
Amezarak
> I already pay income tax in the UK, so paying it twice sounds absolutely
> ridiculous.

You aren't paying twice. That's the point. Assume the US has a 30% tax rate in
your bracket. Poland has a 35% rate for that same bracket. Then as an American
expat, you would pay 35% in taxes. If Poland had a 25% rate, you'd pay 30% (25
+ 5) in taxes. You aren't paying 65% of your income in taxes. You aren't
paying twice.

> On the most basic level - Poland has absolutely no "right" to any of that
> money.

Then Poland has the right to say you are no longer a Polish citizen that can
take advantage of Polish embassies or move back to Poland at any time as a
full citizen.

It seems perfectly sensible to me.

~~~
gambiting
So basically "you will always pay us a bit of your income,no matter where that
income comes from, or you are no longer our citizen"? That's a bit of a mob
mentality, and in general, not how countries work. You don't need to pay taxes
to be a citizen and enjoy protection of the law, otherwise what would we do
with people who really don't earn anything? Kick them out? I'm perfectly happy
to pay income tax on the money made in Poland. But I see no reason to pay
income tax on the money made elsewhere.

And yeah, I'm not totally sure about your example. I'm quite certain that I
would pay 30% of my income in Poland, and then US would want a further 30% of
the remaining amount, IRS would not care that I have already paid income tax
in Poland.

------
jake_morrison
I am a business owner living overseas in Asia. I generally spend about
$2500/year on tax preparation, between my personal return and the 5471 form
that I have to file to report my company information on my US tax return.
While my financial life does have it's complexity, I have to pay this simply
for compliance, independent of income. The $100K/year deduction is on "earned
income", i.e. salary. So if you have other income, e.g. dividends or other
capital gains on real estate or selling your company, you have to pay at your
full standard income rate (small company dividends are not "qualified" unless
the US has a corporate tax treaty with the host country).

As a business owner, my best strategy from a personal tax perspective is that
my company makes no profit - it should all go to me as salary. In the past,
that has put me in conflict with a non-US partner, as it didn't match his best
strategy. And it means that "profit sharing" for employees doesn't make sense.

So US tax law costs me considerable money in compliance costs and
fundamentally distorts the way I run my business, for no additional tax
revenues to the US.

Fundamentally, residence based taxation makes more sense. It's more direct and
easier to manage. People talk about these benefits of being a US citizen, as
if I don't get services from the country where I live.

------
dmotto
They mention at the end of the article the "same country exemption" which is a
realistic solution. If you are an American, you can contact your
representative and ask them to support it. Here you can find more info from
the ACA about FACTA and how it is harmful to Americans abroad:
[https://americansabroad.org/issues/fatca](https://americansabroad.org/issues/fatca)

------
Randgalt
Try opening a bank account as a foreign US resident. It took my over a month
to get my bank account and required copious documentation and a lawyer. All
the time there was no guarantee that I would actually get the account. I
personally know several US expats who were unable to get bank accounts. It's
so much work for the banks that many are just not accepting US citizens for
new accounts.

------
dangjc
My general experience with FATCA has been quite mild. I've been in Singapore
for 5 years, and I had one investment account that had to be closed, but all
my bank accounts were fine. The FBAR took me a few hours to figure out how to
fill out the first time, but every year after it only took 10 minutes to
update the numbers. The laws about starting a business are much more onerous.
If I become a founder/shareholder/director of a company not incorporated in
the US, there are all sorts of painful compliance requirements that are
basically there to make me rather incorporate in Delaware or something. Net
net, I sense that except for a few unfortunate cases, most of the pain of
compliance with FATCA is coming from those who it was meant to target: wealthy
tax evaders. This article did appear in the WSJ...

------
xlcashlx
It appears the first $100,000 you make overseas is tax exempt by the FEIE[0].

As far as I understand my rent details as well as bank accounts overseas are
reported to the IRS. This extra work can be seen as a burden for both parties.

[0] [https://www.irs.gov/Individuals/International-
Taxpayers/Fore...](https://www.irs.gov/Individuals/International-
Taxpayers/Foreign-Earned-Income-Exclusion)

*edit grammar

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ucaetano
Funny thing is that this affects not only American citizens, but also anyone
who studied, lived or worked in the US, regardless of citizenship, since
unless you prove otherwise, that could be taken as evidence that you are a "US
person".

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patrickmay
"The best solution is for the U.S. to join the rest of the world in taxing
based on residency rather than citizenship."

As a former expat, this would have made my life significantly easier. The
current U.S. tax code is appalling in its overreach.

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binarray2000
You must look at it from the perspective of the Oligarchy: Wars, regime-
changes, support to "moderate" forces, spying on the world just cost money.
And you cannot afford all that by only taxing those at home. You need every
dollar. So, you tax the expats (8.7 million of them!). They are abroad to work
after all - they MUST have earnings. As an alibi for your new revenue source,
you pass a new law (Fatca) while saying that you fight "terrorism, tax evasion
and organised crime". Again! The game you have played so well (and so often)
in the past still works. This time it's even easier: Expat "elitists" have no
representation, and the Average Joe cannot think about Fatca when he comes
back home - tired and overworked - after two jobs, worrying about his CC debt
and plethora of other issues.

~~~
jjoonathan
If you asked "Average Joe who is overworked, has two jobs and CC debt" how
much he was concerned about the great injustice of requiring expats earning
>$100k/yr in low-tax nations to make up the tax difference, you wouldn't get
much sympathy. However, it wouldn't be very honest to attribute his lack of
sympathy to apathy. I imagine he'd care, and that he'd find the present
arrangement agreeable.

~~~
binarray2000
> attribute his lack of sympathy to apathy

I wrote "the Average Joe cannot think", not "the Average Joe doesn't want to
think". Other than that, I agree.

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pibefision
Maybe I'm wrong, but america is not the only country who taxes globally. Spain
is taxing globally also.

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brobinson
Only two countries tax non-resident citizens on foreign-earned income: the
United States and Eritrea. I'm assuming this is what you meant (non-resident
foreign income).

[https://en.wikipedia.org/wiki/International_taxation](https://en.wikipedia.org/wiki/International_taxation)

You can sort by what you want to see:
[http://i.imgur.com/hSsVmwd.png](http://i.imgur.com/hSsVmwd.png)

~~~
pibefision
thanks for clarifying this.

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Simulacra
Interesting article.

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rlpb
"By virtue of living abroad, they are second-class citizens, paying onerous
tax burdens without representation."

This seems pretty ironic to me given the "no taxation without representation"
principle.

~~~
amalcon
There's actually a more direct case of this: Washington, DC. Yes, people who
live in the capital of the United States have no representation in congress.
For years, they've even advertised this:

[https://en.wikipedia.org/wiki/File:DC_2013.jpg](https://en.wikipedia.org/wiki/File:DC_2013.jpg)

edit: spelling / typo (thanks mikeash)

~~~
ckozlowski
Mmmhmm. Observer status only.

You can vote for president, but you have no voting congressman.

Cultural tidbit: If you're a resident of the D.C. area, and you live in
Southern Maryland or Northern Virginia, be careful not to call yourself a
Washingtonian. Residents will kinda frown at that. There's a perception that
sometimes residents from the neighboring states will make it seem
(unintentionally or not) that they're part of the city itself, without paying
the cost of being an actual resident: No representation.

Consider that as you will. I always thought it was yet another little quirk of
what is a pretty unique city.

(I'm from Northern Virginia. ;)

