Posted on 06/19/2022 7:37:17 PM PDT by markomalley
Every year, Greenback surveys US expats on key aspects of life abroad. This year, over 3,200 US citizens living in 121 countries shared their opinions on US expat taxes, foreign financial reporting, the Coronavirus pandemic, remote work, and more.
Why do expats live abroad? The majority of expats choose to live abroad for their career, significant other, or their love of adventure and travel.
28% Job relocation 33% Significant other 16% Adventure/love of travel Many expats feel burdened by US tax obligations. Because the majority of the world’s nations use a system of residence-based taxation, most US expats are required to pay taxes in their host country. Despite this, most also have to pay taxes to the US government on the same income due to the US’s practice of citizenship-based taxation. This taxation method has caused the expat community to feel extremely excluded. 86% feel like their concerns are less likely to be addressed by the US government than US citizens living in the USA.
The US government has put several measures in place to help avoid double taxation, but all expats must still file an annual return—and many still have to pay a US tax bill.
77% don’t think they should have to pay US taxes while living abroad 10% were feeling worried about filing their US tax return this year 30% owed money to the US government last year, 53% did not owe, and 13% received a refund.
(Excerpt) Read more at greenbacktaxservices.com ...
- 40% find filing US taxes too great of a burden - 15% are concerned about the current political climate - 12% have married a non-US citizen abroad - 10% are disappointed in the direction of the US government - 10% don’t have strong ties to the US - 8% have difficulty working with foreign banks as an American citizen
------------
My comment: I am an expat living abroad and have experienced each one of those reasons listed above. While I don't have any intention of renouncing citizenship, I can't blame anybody for doing so.
Do you people realize that there is literally only one other country in the world that has citizenship-based taxation?(Eritrea) All other countries tax people who live inside the country and basically leave their country's citizens who live abroad alone.
I've heard a lot of people say that they don't want to be far from their loved ones. I can appreciate that as a reason not to leave.
I've heard many people comment that the US is the last great bastion of freedom. The US has a unique Constitution...that's a fact. (I've looked at other Constitutional documents and none of them are constructed in the same way as the US' Constitution -- that exists to LIMIT the power of government in order to protect liberty).
But in this age, after seeing political prisoners, legal spying on citizens, government control of corporations and financial markets, social credit scores for individuals (read that as cancellation of people based on Diversity, Inclusion, and Equity -- or DIE, for short), extrajudicial executions of domestic enemies, etc., is this still true? Obviously, I have my opinion, but is it objectively factual in 2022?
Renouncing citizenship is not for me. But I can't blame anybody for jumping ship at this point.
X
“Do you people realize that there is literally only one other country in the world that has citizenship-based taxation?(Eritrea) All other countries tax people who live inside the country and basically leave their country’s citizens who live abroad alone.”
I thought it was 4. Eritrea, Cuba, North Korea, and Libya.
But yeah, I found all those problems too. Here is an additional one. If you live outside the US for decades (As I did) you better have a US tax lawyer go over you accounts with a fine-tooth comb because the IRS assumes you are a money-laundering terrorist and will throw your school teacher rear end in jail!
You still need an accountant but it is a good idea to move to a corrupt US territory, like the US Virgin Islands or (ahem) Guam. You file US taxes there but everything stays on the island and all the tax employees are lazy locals who don’t audit anyone. This gives you a paper trail of filing taxes for several years to get the IRS off your back
God-forbid you should have a non-US citizen spouse who isn’t poverty strickened!
Honestly, while I was on Guam or in China, I’d have gladly voted for even The PIAPS if she had changed US tax laws and made the line up with other countries.
I’ve been an expat in the past. You pretty much need a professional in the states to prepare your taxes. You get a 1 to 1 deduction on any taxes paid abroad. The upshot of this is if you live in a higher tax foreign country, you pay the US nothing but you’re stuck paying your country of residence their higher rate of taxation.
If you live in a lower tax country, then you subtract what you paid to that country but now you owe Uncle Sam what’s left of what you’d usually pay. For example if you lived in Hong Kong and paid their 15% flat rate and your effective US tax rate was 35%, you’d still have to cough up 20% more of your income to the US once you were done paying your Hong Kong taxes.
Basically, as a US citizen, you can never get a lower tax bill by moving to a foreign jurisdiction.
Absolutely. If I lived abroad and had no intention of returning I’d tell uncle Sam to eat a d.
people want to be in another country but do like to collect the money we taxpayers pony up...we are paying those taxes.....WE.....
I think you shouldn’t have to pay US taxes but if you live outside the US maybe you should NOT get a govt pension or health care nor SS....how does that sound?
My mother came to USA at age in 70’s, with a permanent resident visa, sponsored by my sister who is a US citizen.
Mother was paid supplemental SS even though she never worked or paid taxes in USA. No wonder SS is going broke.
I already paid taxes on the money I put into social security. As far as I’m concerned, I already paid for my military pension through the substandard pay I got while on active duty (for the first 10 years, defending freedom. For the second 10 years, acting as the enforcer for the new world order). But I don’t mind paying a reasonable amount of tax. Especially on the 401k that wasn’t taxed earlier.
And BTW, Medicare doesn’t work overseas. And Tricare barely works.
But it sort of sucks having to pay tax on money I earn it invest while living here.
Sorry if you don’t approve.
Expat in Ba-Wü.
Regards,
The United States is absolutely not a bastion of freedom or ‘a beacon of light atop a hill’.
My view is as soon as the ink on the US constitution was dry, evil people went to work subverting it and it has been diluted over the years to effectively be worthless. I think it hit the worthless stage in the early 1900s.
Now it is only used by those evil people when it is advantageous to them and hurtful to the people. That is what the Jan 6th hearing were all about and it is also why 5 evil people in robes wrote in 1973 that a state could not make it illegal for a woman to murder a baby.
Thanks for your interesting post and perspective.
“I think you shouldn’t have to pay US taxes but if you live outside the US maybe you should NOT get a govt pension or health care nor SS....how does that sound?”
Within a decade, this will be policy for blue state retirees fleeing to red states for greater freedom.
Meaning, your NY, NJ, CA, IL etc pension will only be paid if you continue to be a demonstrated and proven resident of that blue state.
I felt more at home on my recent trip to Poland than in the US.
It’s a financial “Iron Curtain”.
There are reciprocity treaties in place for pensions in many countries.
E.g., while working in US, you pay into SS. While working in UK you pay into their system. You can retire in either country and get the benefit as if you were paying into the one country all along.
If you do not work for a US company you do not pay SS.
Congress declared, essentailly, all wealth of US Citizens was beholden the the USG in an attempt to prevent rich folks from renouncing their citizenship to avoid taxes. Even if you own a a large company, you can’t take it or the money with you - it remains an asset of the nation. I think this was done in the 90s.
I spent 22 years overseas. I don’t mind paying US taxes. The United States is still the best place in the world and I slept better at night knowing that the US was there when I returned. Now I did everything in my power to stay overseas. Once I returned in 2011 I didn’t recognize the US anymore - Obama’s racism, the gender-benders, and selective law enforcement against conservatives by lawless democrats really stood out.
I don’t mind paying US taxes on US-based income (SS, Military Retirement, 401k distributions), but I think it’s crazy to pay US taxes on income generated overseas when I live overseas (employment, investments, real estate, etc)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.