Next, the Supreme Court Decides How to Punish US Expats

https://www.washingtonpost.com/business/next-the-supreme-court-decides-how-to-punish-us-expats/2022/08/26/c33b3430-24fc-11ed-a72f-1e7149072fbc_story.html

by voisin • 4 years ago

22 53 4 years ago

washingtonpost.com

superchroma4• 4 years ago

I have often found it puzzling how the US taxes citizens working in other countries for non-US companies.

988747• 4 years ago

That’s because they can. Every country in the world would gladly do the same (Who doesn’t like some extra money?), they just lack the economic and military power the US have to enforce it.

goosedragons• 4 years ago

I don't think so. Do you think Britain taxed individuals living outside their jurisdiction pre-WWII when they were top dog? The US has also been doing this long before they were a superpower. Its been done for over a 100 years.

voisin4• 4 years ago

Every country in the world would gladly do the same

Source? I think this is a particularly crass view of the world and it’s various governments’ motivations. Not every government is as hostile to its populace’s wellbeing as the US.

bruceb3• 4 years ago

Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas.

Majromax• 4 years ago

Because US citizens, such as Brittney Griner, expect the US govt to help them when something goes wrong when they are working overseas.

Other countries don't seem to have a problem extending consular assistance to their overseas citizens.

superchroma4• 4 years ago

Jesus, man, consular assistance should not be contingent on income.

That's a disgusting idea.

MomoXenosaga• 4 years ago

I've always wondered if most expats are Democrats? Every US election the media tries to find Republicans living in the Netherlands and aside from a GOP donor ambassador they always fail.

ehvatum• 4 years ago

The backpackers are, the patent holders and grizzled founders are sometimes not. It was super fun walking the streets in NL wearing a maga hat back in early 2016! I don’t recall a single negative reaction. By day, lots of interested conversation. By night, “grab ‘em by the pussy, American! Woohoo!”

kurupt2132• 4 years ago

When you’re rich, they let you

mbg721• 4 years ago

It doesn't matter, there are so few of them, they can be a stuffed-animal for either party to beat. If rule-of-law were really on the menu, they wouldn't have left.

anon2915• 4 years ago

The supreme court applies the law.

I don't understand where this idea has come from that the court ought to be the provider of novel 'fair' legislation (as opposed to the mean legislation proposed by Congress) or the decider of punishments.

This law is set by elected members of Congress. It is their duty to provide proper punishments for it or to scrap it altogether.

It is up to the president to show mercy when someone faces a trial like this through his power of clemency.

Contrary to this article placing the blame solely with the judiciary, a case like this starts with the federal government starting a case. They don't have to.

The executive is the real one punishing us expats.

Stop making the court out to be some dictator.

aidenn02• 4 years ago

Indeed, if the recent decisions by the supreme court have taught me anything, it's that Congress has been incredibly ineffective at passing legislation over the past 40 years.

kurupt2132• 4 years ago

It took the recent decisions? Congress has almost completely abdicated its responsibility for decades

someguydave3• 4 years ago

One reason for this is because the Supreme Court has deferred to allowing a great deal of legislating in the Executive. Congress passes "blank check" laws that require unelected career bureaucrats to make law ("regulation") with minimal oversight.

If the Supreme Court slowly disallows this, then Congress will eventually be forced to vote on controversial issues again.

throw_m239339• 4 years ago

I don't understand where this idea has come from that the court ought to be the provider of novel 'fair' legislation (as opposed to the mean legislation proposed by Congress) or the decider of punishments.

Cause the legislative branch in US is in shambles, "can't" get anything done, at least that's the perception, as the country is divided to a point that both camps consider the other "the enemy", so everybody now relies on either the judiciary or the executive branch to makes laws. This is essentially a constitutional and political crisis, that has been going for the last 20 years in USA.

patrick4512• 4 years ago

Gridlock in Washington is a feature, not a bug. The more gridlock, the fewer laws get passed. Unfortunately, there never seems to be much gridlock around spending money.

anon2915• 4 years ago

Completele agree.

lumost• 4 years ago

So if we have two broken branches of government, break the third?

In practice the relative power and authority of different branches of government changes over time. The US constitution is now the oldest still operable founding document, and was constructed at a time when the king held extensive influence over British governance.

If we say that no branch of government is allowed to be rational, then we’ll need a constitutional convention sooner rather than later.

someguydave3• 4 years ago

"If we say that no branch of government is allowed to be rational"

"rational" in this case meaning "unilaterally countermand the decisions of the other branches"

patmorgan23• 4 years ago

The constitution is not the founding document of the United States, that would be the articles of confederation. But the US constitution is one of the oldest operating constitutions In the world. Most either get rewritten after 50-100 years or get overturned in a revolution.

rayiner2• 4 years ago

Applying the rules created by the other two branches is the Supreme Court’s mandate. What you’re advocating is breaking the third branch of government on the theory that the other two branches are broken and need to be worked around.

A “results” oriented society is a regression from a “rules” oriented society. We have that in Bangladesh—courts that do what they think is “right” instead of following the rules. It’s better than courts where judges take bribes or act in their personal self interest, but not as good as courts that rationally apply the rules. It doesn’t promote respect for the rule of law because people disagree on what’s just and right. But mostly they can agree on the rules and reconcile themselves to the results if they feel the rules were followed.

What a shamefully misleading article title! I’m shocked to see so many well educated Americans, who should know better, embrace such thinking. What I admire most about Americans is that they’ll jump off a bridge if a court tells them to and the paperwork is in order. That’s how you build a marvelous civilization.

patrick4512• 4 years ago

Allowing the courts to legislate makes them broken. That is job of of congress.

Appealing to the age of the constitution to defend the courts arrogating power which that constitution did not grant is complete nonsense. If you want the courts to have that power, pass an amendment. If you don't want to do that but still want the courts to be able to create law, then bringing up the constitution is pointless. You have already tossed it in the waste bin.

anon2915• 4 years ago

I'm unsure what you're arguing for. The supreme court has no authority to be 'rational', if congress dictates otherwise. That's not its place.

American government gets its power from the people. If the people, via their representatives, act irrationally, then the government is irrational. no government is going to be perfectly rational. That's kind of the entire point of our constitution. I would highly recommend reading the commentary written by its writers.

andrew_eu• 4 years ago

The tax deduction for non-resident Americans is, of course, a little more complicated than the article suggests. With the disclaimer that I'm not a tax professional and this isn't tax advice, there are two options: for income up to some threshold (around 120k) it can be "excluded," basically a deduction on your AGI, with anything above that threshold taxed at the higher bracket; the other option is to basically treat taxes paid to foreign governments as a tax credit (with no threshold).

If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. The fun twist: many countries in Europe have a tax system that doesn't assume everyone pays TurboTax, so actually filing is somewhat unusual, and basically impossible to do before 15 April. To find a European tax professional isn't always easy, and if you tell them you're an American they often back off, knowing your case is nightmarishly difficult. And if you do pay some US taxes still (e.g. capital gains on stocks still in a US account) then you're required to at least declare it on your European tax statement -- which itself must be submitted before you know how much US taxes you pay.

The pool of recursion-ready tax advisors is unfortunately very small, and US citizens living abroad suffer for it. As a US citizen living abroad, I think it's still preferable though.

tzs• 4 years ago

If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. [...] so actually filing is somewhat unusual, and basically impossible to do before 15 April.

Would this work?

File in the US for an extension on filing. That gives you until October 15 to file. That doesn't give you an extension on paying, so by April 15th make an advanced payment of either what your US taxes would be without the foreign tax credit, or if you can reasonably make a conservative estimate your foreign taxes what you US taxes would be with that as your foreign tax.

After you know for sure your foreign tax you can do your US taxes and get back however much you overpaid with your advanced payment.

I suppose you could also file by April 15th without an advanced payment and without claiming the foreign tax credit, and then file an amended return after you do your foreign taxes to get back the overpayment.

anaisbetts2• 4 years ago

It works great, except that you must pay your estimated tax debt in full when you make an extension. This means you will pay double taxes, then wait on the US government to refund the money that you floated them. Because of the current IRS mess, this can easily take 6mo+ or more.

iamjdg2• 4 years ago

I’ve been a US expat in Canada for 21 years, and I can say the time and stress of US citizen based tax law is extreme. But every year I do it, send tons of info to the IRS, because I knew the laws, but I would love this burden being removed. I am not super wealthy, my net worth is ~$3 million which is from decades of a high savings/investment rate into primary retirement accounts and equity in my principal residence.

On a side note, another draconian US expat tax law, the US will tax US citizens on capital gains over the US limit on the sale of your foreign principal residence. Crazy right. Don’t live the US, maybe never have, but if you have US citizenship, accidentally or not, or a green card, they can tax you on the sale of a principle residence located outside US jurisdiction.

The US/Canada tax treaty is good in the sense I rarely pay double tax, except for some special circumstances (stock options), but it is a ton of paperwork, information, and stress that I didn’t mess something up. I worked in Germany for a couple of years, and when I wasn’t a Canadian tax resident (I am also a Canadian citizen) the Canadian Revenue Agency didn’t care about my German income and I didn’t have to file any information for it. It was bliss. But of course the US IRS cared. This tax filing years were nightmares.

ncmncm• 4 years ago

Wondering if renouncing US citizenship relieves this particular indignity. Retroactively, one might hope...

jonp888• 4 years ago

The traditional solution of the US government to prevent this was to make you pay thousands of dollars to do it. So much that Germany, which normally doesn't allow dual citizenship, would make an exception on the basis that it was financially impossible for low earners.

They've now come up with an even better solution, which is to force you to go to an in person appointment, but also to ban you from doing so due to covid. Problem solved!

anaisbetts2• 4 years ago

Google "US Exit Tax" if you want to find out just how much the US hates people who expatriate.

iamjdg2• 4 years ago

Yeah this is an option. There is a fee and and exit tax audit. But I travel to the US frequently for visiting family and business and I worry renouncing would lead to border crossing troubles. Im not living outside the US because Im anti US. It’s just where my career took me and then I met my spouse, bought a house, had kids, etc. I don’t want to give up the citizenship of my birth country. So I will complain about the draconian US tax laws but I will probably just endure them for the rest of my life.

dionidium• 4 years ago

I am not super wealthy, my net worth is ~$3 million

It's worth noting that this is the 96th percentile for net worth in the United States. Maybe by "super wealthy" we only mean the 97th, 98th, and 99th percentiles?

Source: https://dqydj.com/average-median-top-net-worth-percentiles/

wrp2• 4 years ago

This seems to be an appropriate thread to ask, how is the US Exit Tax not a human rights violation? By birth, US citizens are considered the property of the US government and have to purchase their freedom.

Next, the Supreme Court Decides How to Punish US Expats

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