You're missing the point.

This isn't about tax avoidance-- as the article points out the first $97k earned abroad isn't taxed and above that it isn't double taxed.

The problem is that the regulations are absurd, not well documented, and the fines and penalties for innocent errors (such as not filing the right form at the right time for bank accounts on which you owe no tax) are extraordinary.

As an american who has spent an extended time abroad, we also suffer from the fact that the rules for banks are so bad that many countries simply won't open bank accounts for americans, because they aren't prepared for the hassle.

It's often quite difficult to live and work in a country and not have a local bank account. It makes getting and making payments to people in that country much more difficult.

Exactly, the US regulations are absurd. And not just for US citizens living abroad. I'm Canadian living in the US as a resident and have a couple of real estate investment interests in Canada, but also can't create an investment account with my Canadian bank because of the regs. The regulations around overseas investments can be punitive to the max, with penalties to boot. You can run into PFIC rules, etc. It costs me over $1500/year to get an accountant to do my US taxes, and I've had specialty crossborder accountants refuse to do my return because it's too complex even for them and they are afraid of the liabilities. Not to mention that you actually can get double taxed when the US doesn't recognize a particular type of income from across the border.

You should tell the author of the article that because he states: "The challenges facing expat Americans abroad would disappear if the United States taxed and regulated only those who lived in America."

He is advocating taxing avoidance clear as day.

I agree the rules and regulations should be better. But he is going one huge step further.

He does NOT pay US tax under the current system. So, he is not trying to avoid US tax. He is trying to avoid paying $5K to an accountant to do his US tax forms for which he does not owe any tax.

It doesn't matter what he personally pays or doesn't.

He clearly states US citizens abroad should not pay US taxes. (edit to add "US" which I thought was obvious)

> He clearly states US citizens abroad should not pay taxes.

That's not exactly true: he states that US citizens abroad should not pay US taxes. We already have to pay taxes in the places we live, just as non-US citizens living in the US still have to pay taxes in the US.

Imagine someone born in the US. They leave the US at three months old. They live their entire lives in their parents - in their - country. They are educated there. They work there. They don't have a US passport and haven't ever visited the US.

In your opinion: should that person pay US tax?

That person should be able to give up their citizenship for free. Many people even if they don't live in the US get the benefit of people the US citizen. The author didn't live in the US yet still got a Rhodes scholarship.

Why are you so incensed by this? Does it make any difference at all if you know that the only other country in the entire world that taxes based on citizenship rather than residency is Eritrea? Even assuming you grant that the state is a reasonable entity to begin with and it is due tribute from everybody whom it claims ownership over, why should somebody pay tax in a country they no longer reside in for goods and services they no longer make use of?

I live and work in Italy, for an Italian company, and have to pay taxes to Italy. I use Italian health care. My children go to Italian schools. I don't see why I should pay taxes to the United States. If my Italian wife were to live in the US, she would not owe any taxes to Italy. This is true for citizens of all countries besides the US and Eritrea, and the latter probably does not have the means to enforce it.

http://en.wikipedia.org/wiki/International_taxation#Individu...

Then you might consider giving up your US citizenship. Of course this means your children (that you have not had yet) should not be able to claim US citizenship.

So I should give up my citizenship? No thanks. I think my country should stop being so overbearing and invasive, thank you very much, like all the others (in this particular matter, at least). "Land of the free" and all that.

> He is advocating taxing avoidance clear as day.

What's so extraordinary about "avoiding" to pay taxes for services you will not use?

Because being an American citizen is like having insurance as I clearly stated before. Also before he got the benefit of being American even though he was living abroad when he took the Rhodes scholarship.

If he doesn't want to have "being American insurance" then yes maybe he should give up his citizenship.

Had he argued just for less complex rules and regulations then I agree but that is not all he is advocating.

He is telling US taxpayers hey keep the country going, I am not going to contribute anything but I want to be able to easily comeback if I need to.

> He is telling US taxpayers hey keep the country going, I am not going to contribute anything but I want to be able to easily comeback if I need to.

And once he comes back he will be liable to paying taxes.

Besides, is this Rhodes scholarship publicly financed? Because according to wikipedia it's funded by a private trust in England.

> He is telling US taxpayers hey keep the country going, I am not going to contribute anything but I want to be able to easily comeback if I need to.

FTA: "My “in-person final loss of citizenship appointment” is scheduled for Jan. 14 at the United States Consulate here."

>I support a reduced tax bill when you are living abroad but to say Americans should pay no taxes is ridiculous.

I'm fairly sure America is the only country that taxes non-resident citizens. Why do you think America is right and every other country is wrong?

Ugh, there are a lot of countries, including big ones like china.

> Ugh, there are a lot of countries, including big ones like china.

The table in http://en.wikipedia.org/wiki/International_taxation#Individu... states "no" for "taxes foreign income of nonresident citizens" for China. Is that incorrect?

Yep, it is a commonly misunderstood and ignored aspect of the Chinese tax system. I have to stay out for one month every five years to avoid it.

I'm confused. Are you a Chinese tax resident? Are you a legally non-tax-resident Chinese citizen? My question was about taxation of non-Chinese income of non-resident Chinese citizens. (Forming an analogy to taxation of British income of British-resident American in the opinion.)

I am a Chinese tax resident but an American citizen. China taxes worldwide income for citizens as well as long term residents (they don't really do green cards), I have to do the one month thing every five years to avoid it. The gov is also not aggressive in enforcement.

Even austrailia taxes worldwide income, America is not that unique here.

I think you are confused about foreign residence and foreign taxation. Most countries will tax all foreign income if you are a tax resident of their country. But not many tax foreign income of citizens who are resident in a foreign country, and Australia definitely does not do this. If you are a resident of another country then Australia doesn't make any demands on you at all. The only catch is that a temporary residence overseas might mean they still consider you to be an Australian resident for a time.

Yes but the issue is about taxing worldwide income of non-resident citizens. Do Chinese laws provide for taxing U.S. income of Chinese citizens who permanently live and work in the U.S.? (Leaving aside enforceability.)

Taxing foreign income of tax-residents is, as you said, common, most first-world countries do it.

Not sure, even then usa and Chinese taxes are about the same and would cancel out. But this is an issue when a PRC resident goes to work in in a low tax country like Hong Kong or Singapore (just like for us, actually). The government was talking about cracking down on PRC citizens working in Hong Kong.

This should apply the same to any country, so, Singapore.

Do Chinese laws provide for taxing Singapore income of Chinese citizens who permanently live and work in Singapore?

If so, is it a matter of not recognizing the citizen is non-resident in China (e.g. claiming it is a "temporary" non-residency)?

I understand what you are saying now. No, China just taxes residents on worldwide income, citizens who aren't residents are not.

If you can avoid it by spending a certain amount of time out of the country then surely it is not what is meant by non-resident taxation in the context of this article?

Yes, you are right. I was misunderstanding the context.

America isn't every other country. In most cases America offers more opportunity than anywhere else.

In this case, more opportunity to do paperwork and apply for special interest tax breaks :)

From my perspective it offers less. For instance, holding a passport from nearly any other country is effectively like holding a form of health insurance - if you get diagnosed with a long-term disease like cancer, you can repatriate and get free treatment. Not so with US citizenship.

Yet other countries don't charge for this much more tangible privilege.

The US passport also isn't even in the top 10 most valuable ones to hold for travel https://www.henleyglobal.com/international-visa-restrictions...

That's why it shouldn't need to tax its citizen abroad...

Please cite sources. While we're trading unsubstantiated opinions; I disagree. I moved to a country everyone said had a crap economy and it has offered far more opportunity.

Of course, you're probably right. The real lesson here is to including supporting evidence and not just your feelings.