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Purple Mountains – A Poem For America

15 Saturday Aug 2015

Posted by John Hanson in America, Literary, Poetry, Politics, Taxes, Writing

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Tags

America, American Revolution, citizen-based taxation, Climate Change, dollar, Evil Empire, Expat, expatriates, fatca, FBAR, healthcare, racism, Sex discrimination, tax cheat

4172_canadian_rockies

I have thought many futures since I was hauled away
Will I return or will I stay
I saw the mountains, prairies, and seas
I learned such treasures are not all glorious,
That binding words are more likely to fill prisons than free slaves
The currency of freedom should not be a crime to possess

Living on the fringe one learns to appreciate rainbows
But some lessons take time to learn
One does not easily befriend the absence of colour,
When one has been circled by white cars with red and blue lights
You cannot protect what you don’t have by taking away what you don’t own

I rarely see the Almighty Eye of the world but I know it watches
I can feel its sticky fingers in my pockets,
And I see it handed out freely
Front desk floozies beg for it,
But you only demand more payment when they multiply

Self defence, you claim
Fighting for safety is the greatest of all evils,
But living in fear is not the same as freedom to fear
You cannot close the gate on the lady dressed in leaves
Did you know mountains only look purple in fading light?

A New World Order’s Tax System

19 Wednesday Nov 2014

Posted by John Hanson in America, Literary, Politics, Taxes

≈ 5 Comments

Tags

cbt, Expat, expatriate, fatca, FBAR, IRS, RBT, tax fraud

Let’s redesign world taxes.

People leave their own country and live in other countries, purely for economic gain. Lifestyles, safety, health care, opportunity, or whatever else does not count. These reasons are un-American. Who in their right mind would emigrate to some frigid Scandinavian country simply to eat cold-water fish and enjoy free healthcare and an excess of well-endowed, blonde women? And given today’s sexual leanings, I don’t think I am being sexually biased.

Money drives the American Government’s treatment of its expatriates, people like me who have lived abroad for decades. It only cares about my money, not me. But I am not going to rant about that, not today. I simply going to propose a re-designation of world taxation policies, an alignment of all countries’ tax policies with America’s policies. If it is good for one, then it must be good for all, right-winged religious fundamentalism excepted. I will not be overly specific but will make assumptions as follows

Assumptions: All country tax rates, policies, and deductions are the same unless otherwise noted, but countries do not recognize other countries deductions (And IRA is not recognized in Canada nor is an equivalent RRSP recognized in America). All countries allow a foreign tax credit (can deduct taxes paid as a deduction in another country) and a foreign income exclusion.

I want to illustrate a couple of things. First, I want to show how silly policies can be (and of course already are for me), and second, I want to then consider what might happen if rates and policies differ, which they do in the real world, how such policies could affect America’s pocket books. Remember, this is all about the almighty greenback.

The real world. I feel like I live in a bad dream. I hope you end up feeling the same as I do. This is the reality of expatriates.

Case A: Doug the Canuck moves to Texas. He and the company that imported him have filed all his paperwork and is legally entitled to work in America, despite all the nasty gun-toting looks he gets when he wears his Team Canada t-shirts. He earns a nice salary, and he pays his taxes. Three months later, he has to file another tax return with Canada. He cannot use any of his American deductions, so he is in danger of paying extra tax to Canada. But there is a salvation: his first $100,000 earned abroad in salary is considered tax free. He is saved.

Case B: Bob the Canuck has lived in California his whole life. He became a citizen in 1969, but he is still a Canadian citizen. He has done well with his business, and his portfolio currently sits at $10,000,000 American dollars held in a variety of investments, largely dividend generating shares. Canada does not recognize his charitable and political donations or a certain state investment tax credits he jumped all over (without obtaining Canadian tax advice – good luck finding south of the 49th). He ends up paying Canada several thousand dollars of extra tax.

The issues:

  1. Both people have to file two tax returns. That’s two complex sets of laws, and advice for their Canadian return is virtually unavailable in Texas or California. If they make mistakes, there are penalties they may have to pay. And if they can find a professional Canadian tax preparer, it will likely cost them many times what they normally pay for their American tax preparation.
  2. While not a lot of taxes leave the country, some money does. If say it’s $1,000 a head, that’s $800,000,000 leaving the country — 800k Canadian citizens live in America and pay American taxes. That’s capital that cannot be put to work in America. If we add up all of the foreign nationals, there are over 40 million, times a $1,000 outflow equals $40,000,000,000, or forty billion dollars, of exiting capital.
  3. But wait, it’s not so bad. America has seven million expatriates. That’s an estimated $1,000 inflow per head or 7,000,000,000, a seven billion dollar inflow. America will only lose $33,000,000,000, 33 billion dollars, in capital to foreign countries. That’s annually, by the way.
  4. In reality, rates differ. I do not have the numbers – they usually depend on many variables. It is generally considered that foreign tax rates are higher than America’s which is one of the things political pundits brag about as a reason for America being the greatest country in the world. Higher foreign tax rates increase the money going out and decrease the money coming in. Instead of $1,000 each way, maybe it’s closer to $1,500 out and $500 in per head. That thirty three billion dollar deficit suddenly grows to fifty six and a half billion dollars leaving the country, that’s $37,500,000,000.
  5. Retiring residents will be hit extra hard. America’s tax rates on investments is the best in the world. Canada would clean up on a person living off their investments, especially. Social security income does not trigger a foreign income exclusion. Many retired people live on marginal incomes. Take extra tax from them, and you have more people on food stamps and other social assistance programs.
  6. Forty million Americans’ lives will be invaded by foreign countries. Some of those countries may even finance human rights abuse or other forms of global instability – read terrorism, Bubba! Your lost American capital is going to finance Jihading your ass into the back of your pickup.
  7. Forty million Americans will be burdened by extra tax preparation, a need for extra tax knowledge, and face a losing game. They will live under constant stress and health care expenses will rise, drug dependency will rise. They can never minimize their tax burdens like a “normal” citizen can. How can you be a true American if you cannot minimize your taxes?
  8. All countries will have to hire extra government tax workers. Goodbye low unemployment.
  9. The cost of extra tax processing (for the $1,000 a head income) will likely exceed any revenues collected — a pointless exercise for all.
  10. Tax preparation businesses will explode: “Your One Hundred And Fifty Country Tax Expert!”

I am just getting started with this nonsense. What country, besides Canada, would ever trust its citizens to report their foreign taxes correctly? There is no means to check on Wing Wang’s American bank transactions from Beijing, not overtly anyway. So what will foreign countries do? They will force all American financial institutions to report their citizens’ bank accounts to them, that’s any account they have signing authority on. It will include all personal, joint, volunteer, and corporate accounts with the person’s name on it. If Doug is promoted to Treasurer of his large corporation, then that corporation’s bank information becomes available to Canada. And if any expatriate from any country anywhere in the world not only lies (fraud) but makes a mistake, they will be severely fined and penalized. Their names will be plastered all over police station or border crossing walls, and will be blacklisted from flying, crossing borders, and may face prison time.

I love telling stories. This would be unbelievable fiction, yet it’s half true. It’s only half true because only America is stupid enough to do this. It will become true once the rest of the world catches on to America’s lead. Come on China, you can take even more of America’s resources. Mexico? You have eleven million legals here. Soon you may double or triple that. Start taxing them. You’ll pay off your debts in no time. And Canada? Canada bows to its knees and once again abstains from pissing off Big Brother. Come on, America says it is okay, so get on the band wagon. Start stealing what’s left of America’s capital.

Let’s make the obvious conclusions. This is a stupid system. Nobody in their right mind would even consider such a system. We don’t know the cost of implementing it, but the benefits have to be marginal at best. Yet this is how America treats its expatriates. This is why, when my Canadian friends gather at a bar, and the discussion turns to stupid Americans, I buy everybody a beer – after all, I am a billionaire tax cheat – and the conversation goes straight down hill as John spews his diatribe against stupid America.

2863360461_55a4aedc7d_zOne of John the billionaire’s cars.

Perhaps the United Nations should step in — like America would listen to them — and create a new human right, the right to file only one tax return. It’s a sad state of affairs that I would even have to suggest such a thing. America, the greatest nation on earth? The next time I hear that, I’m going to punch that person in the face. To over seven million expats, America is the stupidest nation on earth.

Is anybody listening? $$$$$

A Plea To Congress — Adopt Residence Based Taxation!

16 Wednesday Oct 2013

Posted by John Hanson in Politics

≈ 13 Comments

Tags

ACA, Expat, FBAR, FTACHA, IRS, RBT, Taxes

I am an American expat holding both American and Canadian citizenships. I live in Canada where I pay federal and provincial income taxes. America also requires me to file federal income taxes with them, the only country in the world with this requirement on its citizens, other than Eritrea, which America actually has condemned for this practice.

What does this mean? We need to consider a few other features, but for most of us, it simply means double the paperwork. It does for me, for now.

I get a FEIE (foreign earned income exclusion) of $97,000. I make less than that, so I get to write off all of my salary on my American tax return. Wow, you think. I wish I could do that. Remember, I live abroad and I pay taxes to Canada and New Brunswick. Your American rates are far lower. Don’t be happy for me.

Canada is a different country than America. I know most Americans have trouble with this concept, but that’s the way it is. Canada sets its own monetary policies and incentives for its residents – remember this word resident; it’s important. Because our taxes are higher, we also have generous tax savings incentives. I can invest in RRSPs, tax free savings accounts, company pensions, and other obscure vehicles depending on what’s hot with politicians at the time. Capital gains have been treated with favor as have dividends. Special deductions have existed for emerging market companies. I don’t know all the rules. Does anybody?

So when I’m done filing my Canadian mess – yes, it’s no fun here either – I then have to re-file with America. I cannot do it online because I live outside her border, so I download PDFs, fill them out as best I can, write off all my income, fill out RRSP waiver forms – I hope that’s what they are – and file zero taxes. I also file an FBAR (foreign bank and financial accounts) report. I have to list all financial accounts I have with a signing authority over. I have authority over all sorts of things – personal, child educational savings, and a charity organization. I have to file the account information and highest balance of the year of all these accounts.

Note 1: I wonder if I’m breaking Canadian law or professional accounting ethics rules by reporting a Canadian charity’s bank information and balances to the American government. If I am, what do I do?

Note 2: If this was done in America, there’d be revolution. Guns would fire at such a proposal.

Note 3: America already gets all of your financial data, so you do not have to file. Aren’t you happy you have such an all-seeing government?

I don’t own a business. If I did, it would be a bigger mess. They don’t get the FEIE. They have to claim the taxes they pay to Canada as a deduction. Ever do a business tax return? Ever have to do payroll filings? Yeah, fun. Now do it for two countries. I would never work as a contractor here, not through myself as a sole proprietorship. I’d at least incorporate and pay myself a salary. That way I could file corporately once , the easier individual form twice, and still maintain my FEIE. Fun. Not!

Some politicians in America – Raul Grijalva (D CA), John Tierney (D MA), and Mike Honda (D CA) – want to do away with the FEIE altogether. They see millions of us excluding huge sums of revenue and think it’s a loophole. Who knows how these politicians really think? Their analysis gives a number in the order of $71 billion in extra tax revenue over ten years. I don’t have their analysis, but I would bet $20 Canadian dollars that this is the expected total of the FEIE claimed.

http://isaacbrocksociety.ca/2012/03/27/congressional-progressive-caucus-budget-for-all-would-end-foreign-earned-income-exclusion/

Go back to my paragraph on business filers. If the FEIE disappeared, I would also claim foreign incomes taxes. I would replace the FEIE with the taxes I pay. I may not come out the same, though. This company pension I claim will not be allowed on my American form because it is not an American pension. That tax free savings account is not recognized down south. I and millions of others may end up owing taxes to America.

Fair? Hell not!

These are not legitimate taxes. These are taxes due because tax savings incentives in Canada do not qualify in America. I spend all of this money saving for retirement the best I can, and America undercuts me. They say you cannot do that. They say you have to invest in our vehicles. What are they called? 401K’s. I don’t know. I live up here. I cannot even buy them because I don’t live in America. My employer does not offer an American pension. And if they did, if I could invest in these American retirement plans, Canada wouldn’t accept them because I live in Canada. I’m a Canadian resident and I have to abide by Canadian tax law while I’m living here. The same goes for Canadians living in America – and there are many . They have to pay American taxes according to American tax laws. Makes sense. And you know what? They do not have to file taxes in Canada because they are not residents. They do not have to do double paperwork and try to figure out a way to make their 401Ks work in Canada at its higher tax rates. And if Canada did that? If Canada applied its higher tax rates to Canadians living in America, the American government would be all over it for stealing their tax dollars. My tax preparation will become more complex but so will the IRS’s. It will be more difficult to do the paperwork. Extra income will be offset by extra cost. And we will find other ways to not pay. Count on it. We will dump these useless tax savings accounts and find different ways to save for retirement. America will not save any money this way, and its citizens abroad will suffer more. We will likely renounce citizenship in droves. I know I will.

Congress, read this blog. You have seven million of us plenipotentiaries on the ground. Our influence abroad matters both financially and diplomatically. America’s image abroad is dismal, and I’m being nice. Very few of us help it. In fact, we join in on the denunciations. Very few of us talk positively about America, and most of us talk very negatively. Why should we help? You treat us like criminals. You treat us like shit.

Listen to ACA (American Citizens Abroad) and adopt their residency based taxation proposal. Do it now!

http://americansabroad.org/files/6513/6370/3681/finalsubrbtmarch2013.pdf

Philadelphia Voice

04 Monday Jun 2012

Posted by John Hanson in Literary, Poetry, Poetry

≈ Leave a comment

Tags

Eagles, Expat, IRS, Joe, Linebacker, Philadelphia, Taxes

Joe
With the
Philadelphia voice
Tells me what I want to hear
He’s a straight-up guy
Not about chatter
He gets to the point
And doesn’t want to hear
Roundabout questions
And especially not
Comments on Philadelphia sports
Not in this hot weather
Not about his cold teams
And now my taxes
Don’t seem so hard to prepare
For this delinquent expat
He’s thrown away my worries
Discarded them like
An Eagles’ linebacker
Throwing down a slow blocker
To get at his target
And destroy him
I still don’t like
the IRS
But I like
Philadelphia
I like
Joe

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