Airing of Grievances: A Quiz
Which of the following repressive countries pursues its subjects around the world to drain them of their hard-earned income to pay for services they neither want, need nor even have access to?
- Iran
- Saudi Arabia
- Afghanistan (current)
- Afghanistan (1996-2001)
- North Korea
- Iraq (current)
- Iraq (1968-2002)
- Cuba
- United States of America
- Zimbabwe
- France
- Germany (current)
- Germany, East (1949-90)
- Germany (1933-45)
December 18th, 2006 at 8:10 pm
I might have some sympathy for the poor lady if taxes were levied on a pay-for-what-you-use basis… but they’re not. Our taxes, as I’m sure you are well aware, are for the most part assessed on the income one makes… regardless of where it’s earned, regardless of how much one helps oneself to the generosity of the federal government, and regardless of whether one even lives in an area in which they can avail themselves of the offerings (the farmer in Wyoming gets to pay his share of the money spent to build the DC subway system regardless of whether the guy ever wants or can come to Washington).
As much as I’d like to see taxes lower (and not based on income, but that’s another post), the taxes we pay are for the privileges of citizenship… such as having the American military show up to rescue one’s rear end if, for instance, you’re hanging out in Beirut when the Israelis start bombing. So long as this lady wants – for whatever reason – to claim the benefits of being an American citizen, she can shut up, stop complaining and keep paying her taxes.
December 18th, 2006 at 8:47 pm
What Steve said.
December 18th, 2006 at 11:03 pm
Income tax is for the “privileges of citizenship?” Puh-leeze. If the whole world worked that way, that would be fine, but no one else does, which puts expatriates in a really shitty position of having to pay taxes to two jurisdictions for no good reason. Besides, it’s not as though our own government really believes that horseshit themselves, else they’d have no basis for taxing the income of resident aliens. And, at a bare minimum, they’d have to stop taxing HER the instant she ceased to be a U.S. citizen, rather than hounding her for another 10 years as they likely will.
December 19th, 2006 at 12:07 am
What Xrlq said.
December 19th, 2006 at 7:23 am
the poor lady isn’t paying taxes to two jurisdictions as she pretty much gets a US tax credit for taxes she pays to whatever country she’s living in.
and since when have you started judging the appropriateness of a government policy on the basis of how many other countries do the same? does this mean we can count on your supporting gun controls and eliminating the death penalty?
December 19th, 2006 at 8:16 am
We also tax non-resident aliens — including Social Security and Medicare taxes which theoretically they will never get back.
I am starting to see the big picture about libertarian philosophy vs. liberal or conservative. Liberals and conservative have a “collective bargaining agreement” view of the Social Contract whereas libertarians want individually negotiated agreements. Or not?
December 19th, 2006 at 8:49 am
Steve, you’re wrong. The credit to which you refer maxes out at $82,400. Anything above that is taxed to the hilt by both jurisdictions. And course I wouldn’t judge the appropriateness of a policy solely according to the behavior of other countries, but there are situations where uniformity is needed, and nationals of one country living in another are such an example. Either let every country tax its nationals wherever they are (a dumb idea, but acceptable if applied consistently) or let every country tax income earned there (a sensible idea, which every country in the world does – INCLUDING ours). But don’t try to have it both ways, by taxing anyone here on the theory that income is earned here, and also taxing U.S. citizens on abroad simply to penalize them for being U.S. citizens – or even for having been U.S. citizens at any point in the previous ten year period.
NK: What social[-ist] “contract?” I never signed one, and if the body of law as we know it were presented to you to accept or reject in the form of a contract, I doubt you would, either. I’m not complaining – laws aren’t supposed to be contractual – I just have little patience for the contrived theory that by existing I should be deemed to have “agreed” to terms I was never given a reasonable opportunity to accept or reject – and which would likely be struck down as unconscionable if I had.
December 19th, 2006 at 12:02 pm
I think these comments conflate two different ideas. First whether the U.S. can tax its citizens abroad and second, whether it ought to. To the first, of course it can. To the second, we wish to avoid people not paying U.S. or foreign taxes. That is one reason we have tax treaties all over the world. Other nations may not tax people overseas but then again those countries also overtax the people who stay.
I will never forget being in Monte Carlo on the 4th of July looking out over all the American tax avoiders in their yachts watching the fireworks for Independence Day. I am almost always for lower taxes but have very little sympathy for people who “love our milk and honey” but go on about “some other way of living.” As the song says, “if you don’t love it, leave it.” Just renounce your citizenship and have some other country defend you.
December 19th, 2006 at 12:17 pm
People living abroad are having some other country defend them. If Monte Carlo were attacked, the U.S. would indeed defend it, but only because of our NATO obligations and interests in Western Europe, not because a few rich American expatriates happen to be living over there.
I think the general tone of your comment, along with Steve’s, sums up the theory behind the Asshole Tax more succintly any substantive argument can: populist ‘Mercuns don’t much like rich people, and they really don’t like expatriates, so right or wrong, fair or unfair, let’s sock it to the rich expatriates. So go ahead, feel good about that asinine policy if you must, just don’t criticize the liberals for feeling equally good about the equally misguided and equally unfair (and, at least in some cases, *more* popular) policies that they support.
December 19th, 2006 at 1:40 pm
Xrlq,
So it sounds like you think that I’m on the right track with my general theory of libertarianism. That it does not tolerate “the greatest good for the greatest number” with a necessary corollary of “acceptable losses”. Or would you say that such thinking is not restricted to libertarianism but is, or should be, also part of conservatism?
December 19th, 2006 at 3:04 pm
As I have nothing better to do right now than keep this thread going…
So I can guess how much you like the states taxing their residents on all their income, regardless of whether it was earned out of state…
While I usually don’t frown on those who use the tax code to their advantage, a lot of the people caught in this were simply looking to shelter future income by moving out of the country, not because they’re truly renouncing their citizenship. that’s why the ten year period applies, to keep people from, for example, moving abroad and then immediately liquidating their portfolio or selling their business.
And I don’t like this tax, I was merely offering up a defense of it. Nor do I hate rich people (I hope my kids are rich some day). Having said that, as there are unfortunately many bigger injustices in the wonderful world of tax law (such as the rule that substance takes precedence over form), I’m not going to get bent out of shape over a tax that applies to very few people, all of whom are spitting in the face of Americans with their opting to pursue citizenship elsewhere.
And it’s a quibble, but the $82,400 limit is a tax credit, so the poor lady can shelter close to a quarter of a million dollars in ordinary income, over a half of a million in dividends and capital gains. Per Adam Sandler, not too shabby.
December 19th, 2006 at 3:59 pm
Setting aside the silliness of equating foreign citizenship with spitting in the face of Americans (are all naturalized American citizens “spitting in the faces” of their former countrymen, too?), the Asshole Tax is not a special tax on Americans who renounce their citizenship. It is imposed on all Americans who earn money abroad, whether they retain their U.S. citizenship or not. In fact, “spitting in the faces” of their fellow Americans is the only way they can escape that tax – eventually.
No, it’s not, even if I did lazily employ that word myself in a prior comment. As Form 2555-EZ makes clear, $82,400 is the maximum amount of excludable income, not a dollar-for-dollar credit against taxes paid to other jurisdictions.
December 19th, 2006 at 4:58 pm
yes, naturalized americans are spitting at their former countrymen. changing citizenship isn’t like changing your underwear or girlfriends, it’s a really big deal, a repudiation of your allegience to your home country so you can pledge allegience to some new place. I take it personally (in the royal ‘we’ sense) when a US citizen renounces his or her citizenship, and especially when they do so to save some money on their taxes.
and you got me, sortof, the $82,400 is a deduction… but there is a foreign tax credit Form 1116 where you get to offset your US taxes dollar for dollar for taxes paid overseas (just like most states give residents a tax credit for taxes they’ve paid on income earned/taxed in other states)… so there isn’t any double tax.
so the only people who are screaming about having to pay the IRS are the ones who packed up and left for a country with tax rates lower than ours. forgive me for not mentioning them in my prayers tonight.
December 20th, 2006 at 12:14 am
Ah, didn’t know about the credit. I wonder if the two can be combined?
Still, I’m hard pressed to harbor too much ill-will toward those who leave the U.S. for precisely the same reason so many others want to enter it. The solution is not to punish those who want more freedom, but to fix our laws so that those who seek maximal freedom will want to come here.