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Author Topic: Offshore Bank Accounts v. Mexican Drug Profits  (Read 1005 times)
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WhiskeyGirl
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« on: April 21, 2010, 05:37:28 AM »

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For U.S. citizens, cutting ties with their native land is a drastic and irrevocable step. But as Overseas American Week, a lobbying effort by expatriate-advocacy groups, convenes in Washington this week, it's one that an increasing number of American expats are willing to take. According to government records, 502 expatriates renounced U.S. citizenship or permanent residency in the fourth quarter of 2009 more than double the number of expatriations in all of 2008. And these figures don't include the hundreds some experts say thousands of applications languishing in various U.S. consulates and embassies around the world, waiting to be processed. While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriations is mainly because of taxes.

Considering that an estimated 3 million to 6 million Americans reside abroad, the number of renouncements is small. But expatriate organizations say the recent increase reflects a growing dissatisfaction with the way the U.S. government treats its expats and their money: the U.S. is the only industrialized nation that taxes its overseas citizens, subjecting them to taxation in both their country of citizenship and country of residence. (See "U.S. vs. UBS: A Fight Over Secret Swiss Bank Accounts.")

"Their income and wealth are generated largely outside the U.S., so why does the U.S. get a slice of that?" says Phil Hodgen, a California-based international tax attorney who helps Americans in the expatriation process. "More and more people see no long-term benefit to retaining U.S. citizenship."

Additionally, the U.S. government has implemented tougher rules requiring expatriates to report any foreign bank accounts exceeding $10,000, with stiff financial penalties for noncompliance. "This system is widely perceived as overly complex with multiple opportunities for accidental mistakes, and life-altering penalties for inadvertent failures," Hodgen says.

These stringent measures were put into place to prevent Americans from stashing undeclared assets in offshore banks, but they also make life increasingly difficult for millions of law-abiding expatriates. "The U.S. government creates conflict and abuses me," says business owner John. "I feel under duress to understand and comply with laws that have nothing to do with me and are constantly changing almost never in my favor." (See the best business deals of 2009.)

John says that since he moved to Europe 25 years ago, U.S. tax regulations have become more and more burdensome. "Every time I turn around, I get smacked in the face with some new restriction as a result of being a U.S. citizen abroad," he says. And because the U.S. government requires other countries to abide by its banking and financial rules when dealing with expatriates, Americans living abroad are often denied services because of the increasingly complex legalities and logistics involved in serving U.S. customers. Many U.S. expats report being turned away by banks and other institutions in their countries of residence only because they are American, according to American Citizens Abroad (ACA), a Geneva-based worldwide advocacy group for expatriate U.S. citizens.

"We have become toxic citizens," says ACA founder Andy Sundberg. Paradoxically, by relinquishing their U.S. citizenship, expats can not only escape the financial burden of double taxation, but also strengthen the U.S. economy, he says, adding, "It will become much easier for these people to get a job abroad, and to set up, own and operate private companies that can promote American exports."

Read more: http://www.time.com/time/world/article/0,8599,1983238,00.html?xid=rss-topstories#ixzz0lj3sY5J8

Bill Clinton talks a lot about the Tea Parties and violence.

What about the border violence?  All the money that goes untaxed?

How much money goes to Mexico, SA, and other places due to drugs?  Why isn't the Obama administration making sure those folks pay their fair share?

Why isn't Obama doing something about the violence?

Aren't American lives important?
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