A lot of people did not know that Americans abroad are still taxed by the U.S.. The fact is that even if they are abroad for many years, they are still subject to U.S. taxes. Even further, there is soon to be implemented a requirement in which these people will be required to disclose information about their income, foreign bank accounts, and other assets. For some people, taxes were already a hassle and costly. Now some people will have to pay $4,000-$5,000 to get their taxes done, just to find out they do not owe anything. In response, some have even gone as far to renounce their citizenship, but this will not exempt them from any current or back taxes owed.
I think this is a little extreme to renounce your citizenship, but many feel it is their only choice. This is intended to catch people trying to hide funds or circumvent taxes, but it is unfortunately affecting the honest ones too. In class we examine pushes and pulls that bring people to America, so I decided I would check out a push from America to switch it up a little.
Click the link below to see the article
http://www.bbc.co.uk/news/magazine-24135021
I agree, many foreigners are lured here by the lavish lifestyle many can enjoy living in the US. However taxes are what push many people away. For example I see this in the merging MLS (Major League Soccer). Teams in the United States are very intrigued by bringing in soccer stars from Europe in order to promote the League. The MLS has seen the likes on Beckham, Henry, and Keane. Those 3 players belong to the rich teams, NY, and LA. However many teams just can't pull it. LA and NY have to drop enormous amounts of undisclosed cash just to keep them here. And i know for a fact that many smaller teams within the league have tried to bring in players from abroad who are good but not that well known. And a lot of them face the same problem with taxes. And vice versa for American players who go abroad to Europe, many of them denounce their citizenship to avoid taxes.
ReplyDeleteI also found this really interesting. Its crazy to see how much money people have to pay, even though they don't consider themselves as part of the US. The sad part is that people are going to the extent of even denouncing their citizenship just so they don't have to pay taxes. Although not everyone can truly pay for taxes, we need taxes to keep this country running. In the long run we benefits from spending that extra couple thousand dollars. we get to live in a great country and get to live a happier life.
ReplyDeleteStrangely my dad was reading the same article today and i was thinking about posting it as my next blog post but its good to know that you are already ahead of me haha. I thought this would be one of the interesting topic to be discussed in class.
ReplyDeleteI’ve never heard of this situation before. I knew that tax was a subject that Americans dreaded, but I never knew that it would go to this extreme. I actually have mixed feelings about this though. On one hand, I completely understand why some people despise taxes, especially when our economy has not been doing so well in recent years. But to renounce citizenship is a little bit over the top for me. It makes me question why some people would prefer to give up their citizenship instead of trying to pay the taxes and what kind of financial dilemma they are having.
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