Good post. I tend to put it a little differently, but I think there is an overlap in idea:
America rose to greatness when it maintained a high degree of “moral capital”. It was trusted and admired. There was a sense that American believed in the right values – most notably “freedom” and “democracy”. Those days are long gone.
The above tweet references a fascinating discussion about the best Thomas Jefferson quotes. Homelander lawyers often justify U.S. citizenship-based taxation by citing the 1924 U.S. Supreme Court decision in Cook v. Tait. The world in 1924 is very different from the world today. What is meant by “taxation” in 1924 is very different from what “taxation is today”. Neither the factual context nor the reasoning in Cook v. Tait bears any relation to the world today. The quote referenced in the above tweet is:
The above tweet references the following comment at Robert Wood’s blog.
The comment includes:
Tax loopholes? You must be joking Robert! Pity the poor US Slave (sorry, Citizen) who is self employed and happens to live in New Zealand (or any other country on the planet except for the 25 without an International Social Security agreement with the US). Having paid their taxes to their country of residence, they then face paying US self employment tax to the US as there is no exemption. In the case of New Zealand this is 33% local tax + 15.3% US self employment, a marginal tax rate of almost 50%.
It gets better – Firstly, non-US residents are not eligible for Medicare anyway. Secondly, even if they qualify for Social Security, New Zealand will simply deduct the benefit from their New Zealand state pension which has been funded and paid for from general taxation.
So, a person may spend half a lifetime paying 15.3% of their income in self employment taxes to receive NOTHING in return. Oh, did I mention PFIC, FBAR and all the other “gotchas” faced by the unfortunate US slave in New Zealand. Is it any wonder why people are willing to pay almost anything to get out from under this financial terrorism?
This comment is a reminder that there are no consistent principles for Americans abroad are taxed by the U.S. It depends completely on what country they live in. The situation described in this comment would NOT be shared by a U.S. person in Canada.
The “country by country” discrepancies in how Americans abroad are taxed, compounds the pre-existing injustice.
This is one more reason why it’s impossible to live as a U.S. citizen abroad.
Renounce and rejoice!
I was alerted to the above comment that appeared on Facebook. Here we have one more casualty of the “Code of Conduct” that governs Americans abroad. You have heard the saying:
“When in Rome, do as the Romans”.
When it comes to Americans abroad, the Code says:
“When an American goes abroad, do as an American in the Homeland.”
The above tweet references an article on how dangerous Foreign Exchange rates can be to the financial health of an American abroad. It’s fascinating how fluctuating exchange rates impact the lives of Americans abroad in so many ways.
By the way, the Canadian dollar is feeling. This means that:
2015 is a very good year to renounce U.S. citizenship. To understand why, read this post.