« Quarantining gays from marriage | Main | HRC's balls are for dancing (II) »
December 15, 2008
U.S. citizenship (and taxes) are forever
Posted by: Andoni
Regular readers know how often Chris, Kevin and I highlight the tremendously unfair discrimination lesbian and gay couples face under current U.S. immigration law.
Tayland read my post entitled Obama on same sex immigration and left a comment vowing that if U.S. immigration laws don't change soon he and his partner will move to Canada, adding
... then the U.S. will have one less tax payer and Canada will gain one.
I don't know how to break the bad news to you, Tayland, but here's something most U.S. citizens don't realize:
U.S. citizens (and permanent residents) have to file and pay U.S. income taxes no matter where they live in the world, even if none of their income is generated in the U.S.
Read that again because it is a very sobering thought.
The U.S. is the only country in the world that has this world wide grip to tax its citizens -- and it has tax treaties with most of the countries in the world to enforce it.
Is it possible to get around this law? Well Sir John Templeton found a way. He renounced his US citizenship in the 1960's and moved to the Bahamas where there is no income tax. He made millions tax free and everything was fine until he appeared on the cover of Forbes Magazine in a story boasting how U.S. millionaires can avoid US income taxes. This so enraged the public, that Congress passed a law (that was upheld in court) that created a 10 year shadow period for tax obligation even after you renounce your U.S. citizenship. Under that law you had to file and pay U.S. taxes for an additional 10 years.
However, that wasn't the end of the story. Apparently, enough really rich people found a way to keep their incomes reasonably low during this 10 year period, only to sell their major assets in the 11th year. This prompted Congress this year to pass and George W. Bush to sign what is called the "exit tax" law.
Under this law, people who renounce their U.S. citizenship get taxed on their entire world holdings, valued on the day before they renounced and as if they had sold those holdings.
The law is meant to apply to high net worth, high income people. Critics of this law point out that the only other time in history that such a tax was imposed on its citizens was by Nazi Germany aimed at the Jews who were trying to flee that country in the 1930's.
(As an aside, it appears that enhanced interrogation techniques is not the only concept our current government has borrowed from the Nazis.)
So Tayland, if you are a U.S. citizen in a same sex bi-national relationship, you get screwed trying to live here because the government won't acknowledge your partner for immigration purposes ---- and if you decide to improve your situation by leaving and going to a country where they honor and value your relationship, you get screwed once again by a government that asks you to pay tax to it no matter where you live or no matter where you earn your money.
U.S. rights and freedoms may be shrinking and fading, but U.S. citizenship and taxes are last forever.
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d834527dd469e20105365bdffc970b
Comments
-
Andoni, not Chris.
Just take the hit and renounce citizenship.
-
I'm american by birth. my spouse and I moved to Canada about three years ago. All I can say is the water's great, you should come on in.
The tax thing is pretty much irrelevant. A bilateral tax treaty prevents double taxation on the same income. Effectively, I pay taxes only in Canada. I file a US return also, but I pay no additional taxes. don't let the tax thing dissuade you from making the move, it is not a big deal.
-
I'm american by birth. my spouse and I moved to Canada about three years ago. All I can say is the water's great, you should come on in.
The tax thing is pretty much irrelevant. A bilateral tax treaty prevents double taxation on the same income. Effectively, I pay taxes only in Canada. I file a US return also, but I pay no additional taxes. don't let the tax thing dissuade you from making the move, it is not a big deal.
-
Grendel's right. If you're a US citizen (or you're a US permanent resident and have not renounced your green card), you are obliged to *file* a tax return every year. But unless your income is enormous and the country you've moved to has exceptionally low taxes, you won't end up *owing* any tax to the IRS.
Even if there isn't a tax treaty aimed specifically at preventing double taxation, you can claim a Foreign Earned Income Exclusion (on your foreign earned income up to about $100,000) and a Foreign Tax Credit (on the foreign tax that you paid), which will usually leave you with no US tax liability at all.
-
This post is crude, nasty, and dumb. If the US were using tactics adapted from the Nazis in interrogating jihadist prisoners, there would be no jihadist prisoners alive. Reasonable people can disagree whether it made sense to use rough interrogation techniques to procure critical life-saving information from a few Al Qaeda high-ups, but to compare that to Nazi tactics shows an alarming degree of ignorance. It also shows horrific insensitivity to the hundreds of thousands of innocent civillians who had limbs and organs ripped out of their bodies in 1933-45.
Also, Andoni's claim that only Nazi Germany had an exit tax is supported only by a link to a blog, which doesn't provide any source for that contention, and which itself does not even make that point (the blog claims that Russia also had an exit tax). Apparently, Andoni can't be bothered do actually do a little research in support of his own ravings.
Further, even if the unusupported contention were true, that does not mean that America is a Nazi regime. Andoni commits the following fallacy: all great philosophers are Greek. I am Greek. Therefore, I am a philosopher.
I like this blog, but posts like this undermine its credibility.
-
You know, "Dave" if you are going to leave such a nasty and negative comment, you should have had enough courage to use your real name and real email address .... or at least one of the other names you regularly use on this and other blogs. You should know that when you leave a comment, a lot more information is left at this site than just your fake name and fake email address. You're lucky the policy on this blog is that we keep everyone's personal information private, so I won't be a jerk and tell everyone your real identity.
You must have been having a really bad day and needed to dump on someone. All of your points deal with tangential and parenthetical things I said, not the main theme. You are correct on only one thing, that is that the US exit tax was not likened ONLY to Nazi Germany's. but to other regimes as well, such as the Soviet Union.
However, you are very wrong that only one blogger makes this comparison to Germany. Many tax experts and advisors have have made this analogy, not just the one I linked to. Google it, and you will find dozens. The problem was that I could only link to one. To paraphrase you (above), couldn't you be bothered to actually do a little research in support of your own ravings?
As to your comment about "enhanced interrogation techniques" you obviously did not read the whole post by Andrew Sullivan that I linked to. Additionally when you refer to my "alarming degree of ignorance," I was simply agreeing with Andrew Sullivan's post, so thank you very much for the compliment by putting me in the same 'knowledge-ignorance' category as Andrew ---one of the most knowledgeable bloggers out there.
Finally, you end your comments with a personal attack. You should know that personal attacks usually say more about the attacker than the attackee.
I hope you're having a better day today, "Dave."
-
Thank you for pointing out my error, Lucrece and my sincere apologies to Andoni and Chris for misdirecting my comment.
-
Online cash loans are for anyone who needs to borrow funds and is not limited depending on credit. If you have bad credit there are online cash loans that will fit your needs but anyone can apply online including those with shining credit. click Here
-
Would you like to become a bigger, better, stronger or more successful online income affiliate? If your answer is yes, then "
-
"U.S. rights and freedoms may be shrinking and fading, but U.S. citizenship and taxes are last forever."
So true!
The comments to this entry are closed.
Chuck on Dec 15, 2008 1:40:55 PM:
I too, had this rude awakening, Chris.