Category: Uncategorized


I have been thinking about the IRS concept of Horizontal Equity and it has occurred to me that Horizontal Equity actually attempts to do something that the U.S. tax code has never claimed as one of its goals, and that is to “equalize outcomes” for all taxpayers.  The U.S. income tax system has always publicly been portrayed by the politicians as being a “progressive” tax system. A progressive tax system places the burden of income taxation on those citizens who have increasingly higher outcomes while putting little to no tax burden on those with lower incomes.  Having a tax system that varies the amount of income tax charged by using income as the guide for collecting tax is much different from having a tax principle that attempts to guarantee equality of outcome or assure that everyone strictly has access to only the same taxation rules without regards to differing circumstances.

Progressive taxation is fundamentally in line with the goals of Capitalism because it acknowledges the fact that people are not all equally equipped when it comes to natural talent. industriousness or circumstance. Progressive taxation does not attempt to make sure that any one is prevented from profiting from any of these three advantages. Instead it exploits these advantages by increasing the level of taxation that is born by people who employ their advantages.

Horizontal Equity is the exact opposite. Horizontal Equity strictly forces the same tax circumstance upon expat and resident taxpayers.  The language of the imposition is couched strictly in the negative, where expats are forbidden access to the unique and sometimes not so unique tax provisions of their country of residence.  Forcing the same circumstances upon everyone is the central tenet of Socialism.  So it would seem that, under the name of Horizontal Equity, the U.S. does embrace a form of taxation Socialism which is reserved strictly for expats, while espousing taxation capitalism for home landers.

This was just a thought that I had tonight. Comments and corrections are most definitely sought.

 

I would encourage any young person who has American citizenship to renounce it as soon as he/she reaches the age of 16 or at least before turning 18 1/2. The cost is the same but the paperwork involved is much less. Going out into the world as an American citizen will now mean less opportunity for you because no one is going to want to employ you and opening up a bank account will be pretty well impossible. Already U.S. citizens who live abroad are being denied bank accounts and losing out on high profile job opportunities because none U.S. companies don’t want to have anything to do with reporting their finances to the IRS.

If you don’t want to live like a second class citizen in your own country of birth or in another country or as an American who lives outside of the States then dump your U.S. citizenship. The Americans expect you to abide by all U.S. travel restrictions even if you hold citizenship in another country. America does not believe in dual citizenship. They won’t force you to drop another countries citizenship but when it comes to how you live your life you MUST live it as an American. So what that means is that you are not free to engage in the same freedoms as those of your fellow countryment.

When it comes to your financial life you have to be prepared for a life time of form filing and the forms are voluminous in number. But don’t think for one minute that you can file and complete these forms yourself because you can’t. It takes an accountant or tax lawyer to fill out these forms and believe me it will cost you a bundle of money. And that is if you can find a professional in your country and town who is certified by the IRS in the completing of these forms. It is a guarantee that you will commit an error when submitting these tax forms and then you will be slammed with disproportionate financial penalties.

And don’t think about investing your money. The last thing that the U.S. tax system is set up to promote is the financial success of its citizens who live abroad. You will not be able to partake of the same financial incentives that are available to the people in the country that you live in. You will not even be able to take advantage of the same financial incentives that are available to Americans who reside in America. This is because the U.S. treats all financial instruments that are sold outside of America as tools of tax evasion when they are bought by Americans. Some financial instruments you will be able to buy but you will have to report them every year when you file your taxes. And don’t fail to report them because  that will draw a penalty.

Now I know that this last piece of advice seems to contradict my previous statement about foreign financial institutions turning away U.S. clients. Well I am no denying the former statement but I am telling you what things are like right now. We are currently in the transition period where Americans do still have assets in foreign bank accounts. The end game that the U.S. government is playing is one of capital controls by controlling the financial options that its citizens have. The Patriot Act has already forbidden U.S. citizens to hold financial assets in the U.S. if they do not have a U.S. address. The Foreign Account Tax Compliance Act (FATCA) is the sister legislation that will force expat U.S. citizens and their money back to the U.S. or else to drop their U.S. citizenship. Your choice.

As a U.S. citizen resident abroad you will be the citizen of the only Westernized country on the planet that subjects you to double taxation. Each year when you file your taxes you must submit a form that verifies to the IRS that you have indeed been a resident of a country other than the U.S., and this has to be done even if you are living in the country of your birth. Plus you have to answer if you were in the U.S. at anytime during the year. If you were in the U.S. then you must give the dates. The Soviet regime could not have made a better way to keep track of its non-resident citizens than the one that the U.S. has constructed under the guise of citizenship based taxation.

As an American living outside of the States you have very few freedoms. If you want to live anywhere else in the world that you like then you will have to drop your U.S. citizenship. Don’t be a sucker for the faux freedom that the U.S. is offering you.

I would encourage any young person who has American citizenship to renounce it as soon as he/she reaches the age of 16 or at least before turning 18 1/2. The cost is the same but the paperwork involved is much less. Going out into the world as an American citizen will now mean less opportunity for you because no one is going to want to employ you and opening up a bank account will be pretty well impossible. Already U.S. citizens who live abroad are being denied bank accounts and losing out on high profile job opportunities because none U.S. companies don’t want to have anything to do with reporting their finances to the IRS.

If you don’t want to live like a second class citizen in your own country of birth or in another country or as an American who lives outside of the States then dump your U.S. citizenship. The Americans expect you to abide by all U.S. travel restrictions even if you hold citizenship in another country. America does not believe in dual citizenship. They won’t force you to drop another countries citizenship but when it comes to how you live your life you MUST live it as an American. So what that means is that you are not free to engage in the same freedoms as those of your fellow countryment.

When it comes to your financial life you have to be prepared for a life time of form filing and the forms are voluminous in number. But don’t think for one minute that you can file and complete these forms yourself because you can’t. It takes an accountant or tax lawyer to fill out these forms and believe me it will cost you a bundle of money. And that is if you can find a professional in your country and town who is certified by the IRS in the completing of these forms. It is a guarantee that you will commit an error when submitting these tax forms and then you will be slammed with disproportionate financial penalties.

And don’t think about investing your money. The last thing that the U.S. tax system is set up to promote is the financial success of its citizens who live abroad. You will not be able to partake of the same financial incentives that are available to the people in the country that you live in. You will not even be able to take advantage of the same financial incentives that are available to Americans who reside in America. This is because the U.S. treats all financial instruments that are sold outside of America as tools of tax evasion when they are bought by Americans. Some financial instruments you will be able to buy but you will have to report them every year when you file your taxes. And don’t fail to report them because  that will draw a penalty.

Now I know that this last piece of advice seems to contradict my previous statement about foreign financial institutions turning away U.S. clients. Well I am no denying the former statement but I am telling you what things are like right now. We are currently in the transition period where Americans do still have assets in foreign bank accounts. The end game that the U.S. government is playing is one of capital controls by controlling the financial options that its citizens have. The Patriot Act has already forbidden U.S. citizens to hold financial assets in the U.S. if they do not have a U.S. address. The Foreign Account Tax Compliance Act (FATCA) is the sister legislation that will force expat U.S. citizens and their money back to the U.S. or else to drop their U.S. citizenship. Your choice.

As a U.S. citizen resident abroad you will be the citizen of the only Westernized country on the planet that subjects you to double taxation. Each year when you file your taxes you must submit a form that verifies to the IRS that you have indeed been a resident of a country other than the U.S., and this has to be done even if you are living in the country of your birth. Plus you have to answer if you were in the U.S. at anytime during the year. If you were in the U.S. then you must give the dates. The Soviet regime could not have made a better way to keep track of its non-resident citizens than the one that the U.S. has constructed under the guise of citizenship based taxation.

As an American living outside of the States you have very few freedoms. If you want to live anywhere else in the world that you like then you will have to drop your U.S. citizenship. Don’t be a sucker for the faux freedom that the U.S. is offering you.

Censorship in the U.S.

http://www.thefloridanewsjournal.com/2012/04/10/miami-marlins-coach-ozzie-guillen-suspended-after-complementing-fidel-castro-and-saying-h

If this man or anyone in America loves Fidel Castro why isn’t he allowed to say so without there being an uproar? Doesn’t America believe in freedom of speech? Secondly why should anyone care about what is said about politics by a man whose life is coaching grown men to play a child’s game? What kind of an apology is it when it is given under duress? How is this any different then when a terrorist group forces a U.S. hostage to make a video denouncing America?

When you consider that America has diplomatic relations with many other governments that are ruled by more unsavory characters then it seems apparent that America’s obsession with destablizing Cuba is irrational and should be an embarrassment to the nation.

I attended a U.S. tax seminar yesterday and where the following link was given out on what does not “constitute” reasonable cause for not filing your tax returns. If you use any of these reasons you can be assessed a 5000.00 penalty.

http://www.irs.gov/irb/2007-14_IRB/ar20.html

I can say that after coming out of that meeting yesterday I can only conclude that, unless one took a vow of poverty, it will be well nigh impossible to get out of this mess without incurring a lot of pain. According to the presenter the IRS is coming out sometime soon with guidelines on how dual citizens can become compliant.

You know I have…

You know I have been watching the CNN business show, “Your Money”, every weekend for over a year and never once have they dealt with the issue of taxation of expats and dual citizens or green card holders. Neither have they have never mentioned FBAR’s, FATCA or double taxation.

While many of you want see that as unusual I believe that what makes it unusual is the fact that this show is hosted by two Canadians- Ali Velshi and Christine Romans. Why won’t these Canadian citizens address an issue that is affecting their country and must be affecting them also?

Chapter 8 On Taxes

 

8.1

“Taxes are a portion of the produce of the land and labour of a country, placed at the disposal of the government; and are always ultimately paid, either from the capital, or from the revenue of the country.”

From this passage we can see that any steps that one country may take in order to impose its tax regime on its  citizens who reside in and earn their wealth in another country is not a tax that is being levied on its citizens but is in fact a tax that is being levied on the economic productivity of their country of residence.

In other words what the “Savings” clause says about the U.S. is that it does not understand economics at all.

I’ve thought u…

I’ve thought up my own little axiomatic statement with reference to politicians.  It goes like this:

In the event of a crisis or the immediate aftermath you can be assured of one thing from your elected officials, which is that in their attempt to restore things back to what they were; they will inevitably make decisions that will make things worse rather than better.

The America tha…

The America that exist now is not the America that you would like to believe you love.

http://www.salon.com/2011/12/15/obama_to_sign_indefinite_detention_bill_into_law/

This link to the recent Taxpayer Advocate Service report on the IRS comes to us compliments of Calgary411.  In the report the Taxpayer Advocate levels many of the same criticisms towards the IRS that have been uttered by the U.S. expat community.