There are only two countries in the world that have a Citizenship-based taxation system, the United States and Eritrea. So let’s take a look and how the world reacts when a country without global political clout does it…
Eritrea’s “diaspora tax” is called extortion and, according to the UN, it may even violate the Vienna Convention on Consular Relations.
In 2007, Canadian courts rules in the Tewelde Yohannes v Eritrea case that the diaspora tax is illegal and forced the Eritrean government to pay back taxes collected from the Yohannes family.
Expats in Canada 
Isn’t that an interesting article!
I read that article. For sure, the US has become as odious and corrupt as Eritrea. Indeed the US is even more corrupt than Eritrea, because of the scale of corruption, in the trillions not just the thousands or millions. I used to go to African countries and see the corruption and feel proud to be from the US. Not any more. Now I tell my African friends that the US is the most corrupt nation in the world. Imagine, the US government is borrowing and monetizing 40 cents of every dollar–this is a crime at such epic proportions few of us can even imagine.
My reason for expatriating started with being upset that the USA could tax a TFSA of an American person, but that a non-resident of the US could not open up a Roth IRA which has the same concept (i.e., you pay tax first then contribute and earnings in the account are tax free). So as a US citizen in Canada, I could take advantage of the savings of neither the TFSA nor the Roth IRA. Then I saw the New Berlin wall , the Heroes Earnings Assistance and Relief Tax Act, and decided I’d better get out before I become a covered expatriate.
That’s a really good point. As expats, we’re saddled with all the responsibilities of US citizens without being allowed to take advantage of the perks.
Another thing I’m really tired of is the U.S. press simply MUST make everything some partisan issue and spin the facts or story to do so. Not everything is partisan. This legislation harms everyone affected by it from every walk of life and belief system. It harms the U.S. economy and is no respecter of persons in any way. Why on earth can they not just tell a straight forward factual story without doing this. Both sides of that coin are corrupted as can be. Another reason to renounce. NO ONE works for us, or represents us except supposedly Obama and don’t make me laugh. One good thing about this if you want to look at it that way is we have the option to get out of this corrupted to the bone system for once and all. Not everyone there who would want to, will be able to. I think they’d like to make it impossible for us to renounce and get out if they could but, so far they haven’t. So far.
All the more reason to renounce now. Of course, they could still overturn our renunciations, like they did for people who took Canadian citizenship before you were allowed dual citizenship…
I don’t think that the retroactive citizenship is valid. The Obama administration doesn’t give a rat’s a– about the rule of law, but the courts aren’t going to uphold his unilateral rewriting of any legislation that he wants.
In the early 90s the State Department began to use a “uniform administrative standard”, in relation to intent, that presumed an intention to retain U.S. citizenship when people became dual citizens. Prior to that, there were many cases of people who became Canadian who lost their U.S. citizenship. See for example the Richards case:
http://renounceuscitizenship.wordpress.com/2011/11/13/expatriating-acts-the-status-of-your-u-s-citizenship/
According to the State Department those U.S. citizens who lost their citizenship prior to the adoption of that “uniform administrative standard”, have the option (but are not required to) have their cases reopened in order to retain U.S. citizenship. See:
http://travel.state.gov/law/citizenship/citizenship_778.html
and specifically:
“APPLICABILITY OF ADMINISTRATIVE PREMISE TO PAST CASES
The premise established by the administrative standard of evidence is applicable to cases adjudicated previously. Persons who previously lost U.S. citizenship may wish to have their cases reconsidered in light of this policy.
A person may initiate such a reconsideration by submitting a request to the nearest U.S. consular office …”
RenounceCitizenship – I’m sure your right, although I’ve heard from quite a few “accidental Americans” that they were being considered Americans again for tax purposes despite having taken Canadian citizenship prior to the ability to hold dual citizenship. They said that they took no steps to become citizens again.
So that’s very good news for them if they haven’t taken any actions to restore their citizenship.
ExpatinCa: Although there are many people who clearly are U.S. citizens, there is a large group who may not be. Before people make any contact with the U.S. government they should ensure that they are a “U.S. person” for tax purposes. The fact of being born in the U.S. is a starting point. There are reasons why one might no longer a U.S. citizen. The reasons include: becoming a dual citizen or not complying with various conditions required to validate or maintain U.S. citizenship (in the case of people who were not born in the U.S.).
FYI: here is a post that I wrote for the purpose of discussing this idea:
http://renounceuscitizenship.wordpress.com/2011/10/24/you-may-not-be-u-s-citizen/
I am sure that the IRS would be willing to assume one is a U.S. person for taxes. However, one might not be one.
One person who just renounced seems to think they used google street view to access the value of her home to guess the exit tax requirement. It seems extremely creepy and just like something a place like Eritrea would do.
Ruth:
If they come to my house they better be armed. I have four attack cats (and that’s just the beginning of my defenses: I have a storehouse of canned spam and I can send them against an IRS agent as a projectile weapon).
What you said that its not a partisan issue is correct. That’s why you, a democrat party activist, and me, an Alaskan libertarian (just leave me alone I want to live in the woods by myself and eat my moose and spam) are becoming good friends. The enemy of my enemy is my friend. 🙂
Even the IRS couldn’t stand up to attack cats!!
Some IRS agents do carry guns – have a look at this:
http://blog.al.com/businessnews/2010/10/some_irs_agents_carry_guns_too.html
Armed IRS agents in Canada–unlikely for now. In Panama, however, I’ve read that it is already the case: http://nestmann.sovereignsociety.com/2011/10/11/usa-to-non-resident-citizens-pay-up-or-face-the-consequences-part-ii/
Just out of interest, what percentage is the US expat taxtion?
As though you were living in the US. There is a exemption for foreign earned income up to about 90K and a dollar per dollar credit for taxes paid in other countries. For 1 million Americans living in Canada, this issue had been hardly enforced for the obvious reason that very few Canadians could ever a have a tax liability. The thing that has made this issue intolerable has been the Obama administration’s draconian enforcement of FBAR laws, which could conceivable lead to a prison sentence or over 300% of net worth fine. Please consider this article: http://righteousinvestor.com/2011/11/15/when-government-turns-predator/
I am an EX democrat since they did not count my vote in 2008. The same day I finally got Dr. Dean on the phone and blasted him with my “opinion” on the vote manipulation I saw and told him why I would NEVER support them again. Trust me I learned my lesson, the so called “D’s” are every bit as corrupt as the “R’s” all else is kabuki theater.
I have always had friends from every point of view. My favorite uncle was a far right wing republican died in the wool. He and I had some great debates but, always held each other in high esteem and respected each others opinions. A long time ago, Americans used to be able to politely debate issues and still be friendly. These days the rhetoric is so vile and hate fueled by the media both sides act like adolescent children and no one seems to be able to engage in lively but, friendly debate. I am afraid that situation has really harmed the United States since everyone is so convinced they are right and everyone who disagrees on any issue is evil. I won’t miss the lack of intelligent and respectful disagreement either. Life is very dull if every friend you have is someone who agrees with you all the time and you will never learn anything new that way. I value friends from all points of view and all walks of life so I’m very happy to know you! It says a lot to me about how caring people are open to differing pov, that would include you and I really appreciate that.
Attack cats might be a good idea. We have been approached this week though about adopting a homeless English Mastiff. Maybe I’ll get google earth to include a snapshot of said beast in front of our house. lol!!
LOL: we adopted a nice little stray kitty a year and half ago, and she had four kittens, and life hasn’t been the same (we still have two kittens, and two cats from our previous existence).
And oh sorry, I should have said, “former democrat activist”. But I’m pretty sure Alaskan spam-eating libertarian still describes me pretty well.
I’m glad you posted the link I sent you on the Eritrea court case. Hopefully more and more people will be motivated to create a Class Action suit against the US Government and the IRS.
How the USA can create laws that go against it’s own Constitution and enslave people is beyond comprehension???