Tag Archives: citizenship taxation

Opposition to #CookvTait requires one to address the argument: All citizens are subjected to the same tax laws

Assistance required. Many people defend (not justify) citizenship taxation on the basis that:

  1. All U.S. citizens are subject to the same provisions of the Internal Revenue Code
  2. Americans abroad are U.S. citizens

Therefore, Americans abroad should be subject to the same provisions of the Internal Revenue Code as Homelanders.

Or in Homelanderspeak:

All U.S. citizens are subject to exactly the same set of tax laws. What could be unjust about that? We are ALL citizens. Therefore, we should ALL be subject to the same set of laws.

Could you please address your mind to the following question:

What is the best response to this argument? How can one best explain that it is wrong to justify citizenship taxation on the basis that ALL citizens are subject to it in the same ways?


Continue reading


Thoreau vs. Lincoln: Two great Americans with conflicting views of how one should respond to unjust laws

What follows is my comment (final thought to 2014) to the post referenced in the above tweet. I believe that it is becoming more and more relevant.

Continue reading

Cook v. Tait 29: “Citizenship-based taxation” or “Taxation-based citizenship” – From @IsaacBrockSoc

1. Citizenship-based taxation?

The above tweet references the following comment which is certainly “food for thought”.

A small change in vocabulary may be helpful. In point of fact, the US primarily practices RBT. More than 99.9% of tax returns are filed on by US residents. Within the US, the US tax net applies to RESIDENTS, both citizens and aliens and without distinction. It is meaningless to talk of taxing resident citizens based on citizenship when non-citizens are taxed on precisely the same basis. It is like saying we only tax people with blue eyes, but all people with eyes must pay the same tax. Within the US, it is meaningless to talk of CBT, since citizens and non-citizen residents are taxed on exactly the same basis.

The ONLY instance where the US practices CBT is in respect of NON-residents. That is a tiny fraction – fewer than a million filed returns from “compliant” non-resident citizens. With 7.6 million citizens outside the US and fewer than a million filed returns, one can only conclude that FATCA + CBT of non-residents has created is a situation of MILLIONS of US citizens hiding from the US government (7.6 million expats or duals can’t ALL be earning less than $2,500 per year…). The queue of renunciants is of course only the tip of the iceberg since almost all non-resident citizens are unquestionably non-compliant and simply live off the (US) grid and have ever done so.

Viewed in that light, the case for finding CBT to be discriminatory would seem to be a whole lot more evident since it ONLY applies to non-residents. A theoretical US resident who somehow renounced US citizenship would still be liable for precisely the same tax the next day as the day before. Citizenship is only a meaningful criterion for eligibility for taxation OUTSIDE the US; it is completely irrelevant within it. I’m sure someone who knows this better than I can check, but I’d be surprised if the domestic US tax return even asked if you are a citizen: why should they care?

2. If NOT “citizenship-based taxation”, then perhaps “taxation-based citizenship”?

The above tweet references the beginning of the discussion on whether the essence of U.S. citizenship really is just taxation. Remember that in 2004 the United States legislated a new kind of U.S. citizenship – that is the “U.S. Tax Citizen”.

Does the U.S. practice “citizenship-based taxation” or is it just “taxation-based citizenship”?

Bubblebustin suggests an answer.

We’ve had it all wrong! Unlike the rest of the world, the US practices taxation-based citizenship.


Bubblebustin: “Taxation-based citizenship”. Wow! Why haven’t we noticed that before? Well done! Actually, this very morning I woke up with the realization that those expat Americans who are quoted in articles or surveys as being perfectly happy and willing to pay their U.S. taxes from “overseas” because “they’re American and they owe it” are actually filing and paying their U.S. taxes *in order to keep their American citizenship*. That is, indeed “taxation-based citizenship” …. which is about as un-American as it gets!


Echoing MuzzledNoMore, great phrase you coined @Bubblebustin, re;
“… “Taxation-based citizenship”..”

Got to get that into common usage! Very insightful and useful turn of phrase.


Leave it to you, dear bubblebustin, one among others of the most creative here, to come up with this descriptive term — CBT turned on its head.


Taxation-Based Citizenship — TBC

Best one yet, Bubblebustin. It expresses perfectly the mindset of the U.S. government and those shadowy figures behind the U.S. government. Americans at home and abroad are nothing but tax fodder (some are both tax and cannon fodder). And they all thought they were being “loved” for their devotion to flag and country.


Thanks everybody, but can we make the argument that Taxation-Based Citizenship is correct? I’ve struggled with the term CBT for quite some time and always thought there’s a better, less incriminating way to frame the issue. This all ties into the Human Rights Complaint that I’m actually just reading through now, which is very inspiring in terms of freedom, equality.

I think the argument here would be whether one can still enjoy US citizenship regardless of their personal tax situation. Can someone be denied certain benefits of US citizenship if they aren’t tax compliant?

Language matters. It’s important that we be clear in how we describe the taxation of U.S. citizens abroad.

Cook v. Tait 27: The US Government uses the fact of “U.S. citizenship” to control #offshore banks

The above tweet references a post at the “Citizenship taxation Facebook Group“.

The post raises questions that include the following:

Can a Swiss bank be sanctioned because it fails to discriminate against U.S. citizens? Can the United States ensure that its citizens be subjected to discrimination because they are U.S. citizens? This is what is happening with FATCA and the the FATCA IGAs.

Should U.S. citizens be required to live in a world where, if they are outside the United States, they are permitted only the freedoms that the U.S. Government allows?

Interesting questions indeed.

The post about the “Non-prosecution agreement” entered into between the U.S. Department of Justice and thw Swiss Bank EKS. This was discussed on Jack Townsend’s blog as follows:

Mr. Townsend reports that:

Continue reading

Cook v. Tait 18: #Americansabroad by their very nature benefit the US government wherever they may be found

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:

Continue reading

Cook v. Tait 19: Q. How are #Americansabroad taxed by the US? A. What country do they live in?

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!