US expats: No tax reform for you!

Document here: http://citizenshiptaxation.ca/wp-content/uploads/2017/11/bill_text.pdf

But don’t bother, there’s nothing in it about moving from citizenship-based to territorial taxation, nothwithstanding the Republican campaign platform and a petition by Republicans Overseas to that effect. (Democrats Abroad made weak, and rather late, statements of semi-support, after having done nothing while their party was in power.)

It is dimly possible that such reforms will be included as an amendment (it would have to be done this week)–but rather more likely that the whole bill will crash and burn due to the inherently controversial nature of tax reform, and the fact that the Republicans have such a slim majority.

Expect US renunciations to continue to rise.

It isn’t the dissolution of IRS that I was vying for, but in general I do like the bill. It does a lot of consolidation and repeal rather than piling on more and more code. The bill strongly favors business. The bill also has some advantages for outbound transactions such as repeal of Sec 956.
This article has some good commentary on the proposed changes for those of you that are US with interest in CFCs (not chlorofluorocarbons). OP is correct in that it will not affect most of you. Here is the closest we will get to territorial based, "The bill would reduce the 35% corporate income tax rate to 20% beginning in 2018, and modify the current US worldwide system of taxation and adopt a territorial system that exempts from US tax dividends from foreign subsidiaries paid from foreign earnings. The move to a territorial tax system includes anti-base erosion provisions targeting both US-based and foreign-based multinational companies. "
HA!
Oh, and I’m super stoked about not paying the damn Obamacare penalty!

Good. Let those dead beats be someone else’s burden.

A tax-cut without the appropriate cut in spending, means nothing. If there is a cut in spending, it will be to social and infrastructure. Cannot cut making shiny killing machines.

Another way for the top 10% to get more of the 90%'s money. And give the 90% just enough of a break so they won’t bitch too much.

Nice to see they still tie jobs and tax cuts together. Keep repeating a lie and people will believe it.

I’m not sure how you define “deadbeat”, but it is unequivocally 1) a single word, not “dead beat”, 2) pertinent in describing someone who actively participates in tax fraud (cough cough), and 3) not at all applicable to Americans overseas who try, to the extent possible, to remain compliant with the endless spider web that is the US tax code.

The people who are renouncing their US citizenship are not doing so because they’ve been cheating on their Federal taxes. They are doing so because the costs of compliance have become overly egregious. These costs are more than just financial expense of paying personal income tax in exchange for zero services (the marines ain’t gonna come to save you or me when the bombs start dropping), but also opportunity costs (i.e., loss of business and employment opportunities) and a deep and abiding distrust of a government that demands the disclosure of unprecedented levels of personal financial information – an invasion of privacy that goes far beyond what US-only persons must accept. Put another way, if a US citizen has been cheating on his taxes for years and getting away with it, he has little motivation to renounce given the increased government attention on his finances that will result from his application to renounce. No, the deadbeats aren’t going anywhere.

As far as these folks becoming “somebody else’s problem”, I guess you are assuming that they are taking passports in places like Singapore and Switzerland or even SKN because of those countries’ generous socialist policies. I would tend to disagree, and instead submit that a welfare check is not what former US citizens are actualy seeking.

Perhaps my interpretation of your comment is wrong.

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I was laboring under no hope whatsoever that global taxation on individuals would be part of this. But I have to admit that I had a glimmer of hope for the end to the ridiculous and redundant FBAR and Form 8938 filing requirements. I guess Rand Paul won’t be grandstanding on this issue much with his broken ribs and bruised lungs. Congress is Lucy and we are all Charlie Brown.

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Kind of…let me do some clarification.

“deadbeat” however you want to write it, is my catch-all for people who whine about paying taxes, as if the US has the absolute most burdensome system in the world. “If things don’t change, I will renounce my citizenship!” See ya.

In the US, the gov already has your income, assets, and banking info. You have to go through a myriad of forms and hoops due to capitalism. In part to some of the corporations and billionaires who are getting a nice slice removed from their share. Living/working abroad, unless otherwise, the US gov has no clue. The banks report your info, and the local tax bureau may, but otherwise your employer probably does not. So, you have to give it. Is it complicated and mundane? Sure. It is like that for a reason. As long as more and more home-bound financial companies offer filing services to expats, just mark it on your calendar to contact and pay them. They are the reason your filing reqs will not change.
And you DO benefit from taxes when you live/work abroad. Namely, consular services.
Do you think you should not pay for that? Do you feel only the poor saps on the mainland, many who will never travel outside the US, need to pony up for you? Citizens can get passports, visas for spouses and other new additions to the family. You cannot just go to LA and announce “we are here!” If it all goes to pot, they can help get you out. In legal trouble they can facilitate representation. Maybe you feel you do not need that.

As for being someone else’s problem, well go to some place that does not require expats to file any foreign income what so ever. Better, go somewhere where they pay next to zero taxes. I hear Somalia does not require its expats to pay file taxes. Afghanistan, too. I don’t think ANYONE has to pay taxes there!

Comparative annual report from Treasury Inspector General


I’m looking forward to reading next season’s version. It does appear that fraud is improving (fig 5). But this only addresses the ‘identified’ fraud cases, not the hemorrhaging of undetected fraudulent refunds. Until this wound is staunched, I am refraining from weighing in on how US tax dollars should (or should not)be spent.
Also fig 3 has some interesting statistics on ACA premium assistance for everyone’s political poo-slinging desires.


Green = no income tax on individuals. Don’t miss the little dots!

So you actually pay U.S. taxes while living in Taiwan given the $102,100 foreign earned income exclusion?

Actually, no. But, I am not complaining about filing, and nor would I make a stink about paying them if I needed to. Also, I would only be taxed on any amount OVER that threshold. If you made US$204k/ year, you only paid tax on half your income. Price of admission, as far as I am concerned. Stop complaining.

If I did make enough to pay there, I could use what I paid here as leverage on that. Similar to where I used to live. If you live in MO and worked in KS (or vice versa) you could use the state tax paid against your own state taxes.

I had a boss who went out of the way to bitch about taxes and filing and paying and all that nonsense. He wanted to cut every social program imaginable, because he didn’t want to pay for it. We were walking down a street and I saw an elderly couple. I stopped and asked them if they were on social security, because if there were the guy behind me wanted to take it away. I was fired later that day. Hey, if your gonna talk the talk, you gotta do the walk!

Actually I am kinda happy I do not. I do not want to pay for 45’s wall. Or his salary, or his security.

So you pay zero taxes too for all the benefits the mainlaind-taxpayer-paid AIT provides?

We’re all deadbeats then it seems to me.

Or maybe it’s not about paying taxes after all but about unwarranted government intrusion and being treated like a second-class citizen in Taiwan because we’re too much trouble to deal with.

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AIT is not an embassy. While it does provide embassy functions, its structure and funding are more complicated. The employees are not state department employees, and the institute is managed separately from the state department. It is a pretend embassy, if you will.

What is this “unwarranted” thing? Where in the constitution does it protect you against that? Are you one of those “taxes are unconstitutional” sorts? Because, Article I outlines that, indeed, they are. State-side the gov has the info on you. Here, they do as well. The banking and, @yyy could clarify, I believe tax information is shared from Taiwan to Washington.

My ex in the states was someone who refused to work and refused to pay for anything she did not explicitly ask for. She claimed why should she? She did not ask to be born. She would not pay for cable, a car, food. She literally expected others to pay her way. It was her birthright, she felt. That is how I view the anti-taxers. It is not the governments business how much I make, so I am not paying anything. You pay for the roads and infrastructure I will gladly use.

They don’t share that info with yyy. What they share with each other, I have no idea.

Incidentally, someone recently shared a lot of info with journalists in several countries. CBC spent at least half an hour last night sniping at the Bronfmans (friends of the Trudeau dynasty) for alleged evasion via the Caymans, complete with spooky incidental music. It was like Halloween came late this year! :ghost:

No Taiwanese seem to be implicated in the “Paradise Papers” (unlike the Panama Papers), but at least one figure in the Trumpssia saga came up: Wilbus Ross.

Hopefully this won’t result in terrorist attacks.

CBC. Do they still have that “5th estate” or whatever? That was fun. And the radio side, “as it happens” was a favorite of mine.

Anyhoo…

“Wouldn’t need no paradise panama papers if we didn’t have to report taxes!” I can hear them complain now.

So you don’t file yearly U.S. tax returns as well as Form 2555’s? No interest income? Any self-employment income in Taiwan? That’s taxed 15% and not covered by the foreign earned income exclusion.

I have to file. 1040 and 2555 and whatever the fbar one is. I’m not self employed. My wife files as a PR, too. Although her green card is most likely useless. Its been 7 years and we own no property in the states.

Pffft…righhht.
Did you forget you have to pony up $200 USD to renew a passport? Visas are free then? I certainly think not.

If I am paying a fee for those services for US citizens and paying taxes which supposedly are going towards those services, isn’t that a bit of double dipping?

www.cbc.ca/fifth/

The other day they got nasty on that international pipeline thing.

The US does have the most burdensome tax regime in the world in the sense that it (along with Eritrea, which presumably lacks the same ability to enforce its will on the rest of the world in violation of every other country’s sovereignty) is the only country to tax its citizen’s income globally.

But this issue has become compounded by FATCA. The burden here is greater than just cumbersome paperwork that we must all file with the Financial Crimes Enforcement Network, although the criminality of failing to do so or of improperly computing the highest annual balance in your financial accounts creates a huge amount of unnecessary stress (unnecessary in the sense that the IRS already collects this information for US citizens’ financial accounts in most countries, including Taiwan).

This also makes it more difficult to obtain financial services overseas. Maybe not for a bank account, or even a stock trading account, but anything more complex is basically impossible because the banks and other financial institutions don’t want to take the risk of angering the IRS or US Treasury Dept.

The burden is even higher for US citizens who lose corporate job opportunities because of their requirement to report all information about bank accounts over which they have signature authority (i.e., corporate officers). They might lose these opportunities because the corporations do not wish to report these accounts to the US treasury, or because the corporations fear the legal risks of “incorrect” reporting, or because the individuals themselves fear the risks of getting it wrong on their FBAR – which is a criminal offense, not a civil offense. This is not a concern for those living and operating in the US only, so you are wrong to state that the Federal government already has this data.

None of the above apply to anywhere else in the world, including socialist countries that you may admire such as Sweden, Denmark, France, or Canada. These countries, who sit the pinnacle of Wakefulness, do not apply such a mad system on their expatriate citizens. Are you suggesting that they should learn from the wise ways of Washington DC? Moreover, US citizens who renounce do not need to seek sanctuary in Afghanistan or Somalia in order to find countries where they are not taxed globally or burdened with onerous tax reporting requirements or financial account reporting requirements.

The US government releases the names of citizens who renounce, but not, as far as I know, the countries of emmigration. I suspect that they will quietly drop the practice of naming names because it was intended as a mechanism of publically shaming the renouncing former citizens but instead has become symbolic of the stupidity of the Fatca laws. I would argue, without evidence, that the largest country of emigration in terms of the number of individuals is very likely to be Canada. These are not all the fat cats whom you so despise. I’d be willing to stand heavy odds that the number of US emigrees to Afghanistan is zero.

For some, the reason for renouncing is probably the requirement to pay tax, but this requirement has existed since the Reconstruction era and it has been aggressively enforced for more than a decade. The number of renunciations only went parabolic after Fatca was adopted. Granted, Fatca makes it more difficult to hide assets (but not impossible for those with the sufficient wealth, as we can see now with the Manafort thing). But Fatca does not actually increase one’s legal tax burden – so perhaps you might consider that the ancillary damage of Fatca (i.e., employment and business opportunities that would be lost or forsaken because of FATCA by those who remain citizens) may be a more pertinent reason for the increase in renunciations. What this means is that a large number of economicallly-productive people (post-FATCA renouncers, if that’s a word, now number in the tens of thousands in aggregate) are no longer paying taxes to fund the US Federal budget that pays for the weapons, handouts, and interest on the Federal debt. Again, these are not deadbeats – deadbeats are those who fail to pay or file, or those who file fraudulently (which includes filing fraudulent returns in Taiwan even though it’s the boss’s fault – not that anyone on Forumosa would ever facilitate anything like that).

Simply put, FATCA is a dumb law.

I agree with your point that the tax preparation industry is a major reason why this situation will never be alleviated. But this only further supports the argument that the system is fucked. The tax preparation / FATCA preparation industry benefits from the incredible complexity of the US tax code and is a strong and well-funded lobbying force, unlike expat individuals – but that is hardly a cogent argument against simplifying the tax code or eliminating FATCA. It’s like saying that we should keep dropping bombs on other countries because Raytheon supports such policies.

As for the value of consulate services, I’d say we’re getting a raw deal. I already have to pay for my passport, both through the taxes that I pay and the specific fee for the passport itself. Also, do not assume that passports are a naturally-occurring phenomenon – they are not an endogenous feature of mankind but rather a product of centralized government power that only emerged in the latter part of the industrial revolution (along with other goodies like Coke, Pepsi, fascism, communism, the Federal Reserve Bank, and World War 1). I concede that having a passport is useful in today’s Orwellian global order, but once they stopped handing out extra pages, they lost me. As far as visas for foreigners, I reckon foreigners ought to pay for that service. They aren’t going to provide you with legal assistance – they may give you names of service providers, but I reckon a google search will suffice.

And again, please don’t assume that the marines are coming to your rescue when the missiles start flying across the Strait – there are far too many US passport holders here for a helicopter evacuation. If you don’t believe me, call AIT and ask them what their contingency plan is. They’ll tell you that they’ve got a very detailed plan to evacuate government employees and their families – but not you. Or, more to the point, me.

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