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Debate: Citizenship And Worldwide Taxation: Is It Morally Justified Or Unjustified? - May 17

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[OP]
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Debate: Citizenship And Worldwide Taxation: Is It Morally Justified Or Unjustified? - May 17

This is a US debate, but there are an estimated 2 million US/Dual citizens living in Canada (im one of them). We are all double-taxed and cant live normal lives as we are serfs to the IRS tax code which punishes anything foriegn. This is a debate between a Toronto citizenship lawyer (who is dual citizen) John Richardson and Edward Zelinsky on whether its morally justified. John Richardson is a strong advocate against citizenship based double taxation and will be arguing against it. Will be a very interesting debate! I encourage you all to post your questions for them.

https://www.taxconnections.com/livestream

Citizenship And Worldwide Taxation: Is It Morally Justified Or Unjustified?

Friday May 17, 2019
105 replies
Deal Expert
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Nov 15, 2004
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Give up your citizenship if you don't want it. The US taxes citizens worldwide, but it also lets citizens vote regardless of the country they reside in. Taxation = representation.

I don't understand why anyone would do this though. Having US citizenship offers benefits that are far greater than the taxes international citizens are charged.
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Piro21 wrote: Give up your citizenship if you don't want it. The US taxes citizens worldwide, but it also lets citizens vote regardless of the country they reside in. Taxation = representation.

I don't understand why anyone would do this though. Having US citizenship offers benefits that are far greater than the taxes international citizens are charged.
You trolled on other posts and as you are aware renunciation is still very expensive and you are still subject to exit taxes and and any other double-taxation already imposed on you such as the CFC transition + GILTI tax. Renouncing doesn't exempt you and your assets from IRS obligations.

If you are not a dual citizen who has experienced double taxation you are not aware of the hardships. US citizenship is a liability and severely limits your ability to live a normal life. Its only an asset if you plan to live in the US.

The US needs to cease imposing taxation on the tax residents of other countries.
Sr. Member
Jun 13, 2018
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speer12345 wrote: You trolled on other posts and as you are aware renunciation is still very expensive and you are still subject to exit taxes and and any other double-taxation already imposed on you such as the CFC transition + GILTI tax. Renouncing doesn't exempt you and your assets from IRS obligations.

If you are not a dual citizen who has experienced double taxation you are not aware of the hardships. US citizenship is a liability and severely limits your ability to live a normal life. Its only an asset if you plan to live in the US.

The US needs to cease imposing taxation on the tax residents of other countries.
So you have an issue with paying for the benefits you already rec'd? If those USA citizenship benefits were not wanted years ago they should have been renounced, then the assets you don't want taxed now would never have been an American accumulated asset that has a tax implication. There was a time for a normal life, that most people on the planet lead, that of ONE citizenship, years ago. You or your family decided to maintain the security of a dual citizen.

The US doesn't impose taxation on tax residents of other countries, they expect their citizens to pay their taxes as all good Americans are expected to.
[OP]
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ritzcrv wrote: So you have an issue with paying for the benefits you already rec'd? If those USA citizenship benefits were not wanted years ago they should have been renounced, then the assets you don't want taxed now would never have been an American accumulated asset that has a tax implication. There was a time for a normal life, that most people on the planet lead, that of ONE citizenship, years ago. You or your family decided to maintain the security of a dual citizen.

The US doesn't impose taxation on tax residents of other countries, they expect their citizens to pay their taxes as all good Americans are expected to.
You seem very adamant that I am somehow receiving benefits. What benefits have I received? I only have liabilities from being a US citizen, limited life potential, restricted retirement, savings, retirement and pension options. Limited business options as self employed person (CFC). Oh and thousands in yearly expensives to an accountant to be US tax compliant.

What benefits does the US give me in Canada? And I hope you realize there are millions of accidential Americans. Many do not even realize they are US citizens until their banks start closing their accounts and mortgages and sending them FATCA letters demanding their SSN.

The US imposes taxation on the tax residents of other coutnries absolutely. You do realize the US has worldwide taxation? USA and Eretriea are the only countries that impose citizenship based double taxation.
Deal Fanatic
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Nov 19, 2004
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Why are you double taxed? We have a tax treaty with the US so whatever taxes you pay there are generally applied to your Canadian return and you only pay the difference.

If you don't want to pay taxes to the US, give up your citizenship, pay the exit fees and move on.
Sr. Member
Jun 13, 2018
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speer12345 wrote:
The US imposes taxation on the tax residents of other coutnries absolutely. You do realize the US has worldwide taxation? USA and Eretriea are the only countries that impose citizenship based double taxation.
uhm, NO. They don't impose taxes on me. I'm a tax resident of Canada

eta:
I only have liabilities from being a US citizen, limited life potential, restricted retirement, savings, retirement and pension options. Limited business options as self employed person (CFC). Oh and thousands in yearly expensives to an accountant to be US tax compliant.
This all screams IT'S NOT MY FAULT
None of it is a real liability, these savings and retirement restrictions don't exist. Your business options are far better than a single state citizen. You can freely enter the USA, with no real need to say why, can work anywhere you choose, can open bank accounts, investments, buy property, sell property, All these things are impossible for the average Canadian to do in the USA. Because we are not bona fide citizens of that country.

Debates are about comparing real things, not just asserting one position and refusing to see any other position
[OP]
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Jul 8, 2017
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don242 wrote: Why are you double taxed? We have a tax treaty with the US so whatever taxes you pay there are generally applied to your Canadian return and you only pay the difference.

If you don't want to pay taxes to the US, give up your citizenship, pay the exit fees and move on.
Tax treaty does not save you from double taxation. Nor does FEIE/FTC.

Two tax codes are never the same. TFSA/RESP taxed + foreign trust. Canadian corp = CFC subject to double taxation + transition tax + GILTI tax. All canadian mutual funds, etfs, REITS, certain stocks, index funds = PFIC (double taxed punitive), insurance complications, Ontario HBP taxed by IRS. Principal residence sale taxed (tax free in Canada). Phantom taxes appear. Hell, If you receive child support, unemployment, disability, the IRS taxes this as income.

There are so many nasty tax caveats people do not realize.
[OP]
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ritzcrv wrote: uhm, NO. They don't impose taxes on me. I'm a tax resident of Canada

eta: This all screams IT'S NOT MY FAULT
None of it is a real liability, these savings and retirement restrictions don't exist. Your business options are far better than a single state citizen. You can freely enter the USA, with no real need to say why, can work anywhere you choose, can open bank accounts, investments, buy property, sell property, All these things are impossible for the average Canadian to do in the USA. Because we are not bona fide citizens of that country.

Debates are about comparing real things, not just asserting one position and refusing to see any other position
If you do not believe the US does not tax the tax residents of other countries you are trolling or are a compliance vulture who benefits from citizenship based double taxation. The only people who actively support CBT dont actually understand it and think that all US citizens have a radio and can call in seal team six and 6 aircraft carriers to rescue them or are in the tax compliance industry who make hands over fist on the hardships of US citizens attempting to live outside the US.
Sr. Member
Jun 13, 2018
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The troll term is interesting here. I stated a fact, I do not pay USA income related taxes, I am a tax resident of a country other than the USA. That you still make a false claim, based on your inability to comprehend the facts, leads me to believe you are just trolling everyone with your posts.
the hardships of US citizens attempting to live outside the US.
even you agree you're a bona fide citizen of the USA, who should pay his taxes on earnings of cash or in kind.
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speer12345 wrote: You trolled on other posts and as you are aware renunciation is still very expensive and you are still subject to exit taxes and and any other double-taxation already imposed on you such as the CFC transition + GILTI tax. Renouncing doesn't exempt you and your assets from IRS obligations.

If you are not a dual citizen who has experienced double taxation you are not aware of the hardships. US citizenship is a liability and severely limits your ability to live a normal life. Its only an asset if you plan to live in the US.
Or do business in the US, or travel to the US, or study in the US or any US-affiliated institution, or seek employment at a US company anywhere in the world, or bank and trade stocks in the US, or obtain a mortgage to buy property in the US, or obtain superior US-only financial products/services, or use a US embassy to get yourself out of trouble abroad, or any number of other things.

You may refer to anyone who disagrees with you as 'trolling', but you already know the solution to this 'problem' lies in giving up your citizenship. The main issue seems to be that you either want to keep it and all its benefits but not pay for it, or you'd rather sit back and complain while racking up a bigger tax bill instead of just paying to get rid of it ASAP.
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Jul 17, 2008
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Move to Asia, South America or Europe. Plenty of countries there that IRS can't touch you even if they "demand" you pay up. Canada is US's biatch so expect the hardship you mentioned unless you pay up the extortion to renounce your US citizenship.
Newbie
May 14, 2019
1 posts
What might those benefits be?

So you believe it is justified to pay taxes to a nation you do not live in and receive nothing from? Taxes are a civic responsibility to the communities in which one resides, they SHOULD have nothing to do with ones citizenship which is a birthright.
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Nov 19, 2004
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speer12345 wrote: Tax treaty does not save you from double taxation. Nor does FEIE/FTC.

Two tax codes are never the same. TFSA/RESP taxed + foreign trust. Canadian corp = CFC subject to double taxation + transition tax + GILTI tax. All canadian mutual funds, etfs, REITS, certain stocks, index funds = PFIC (double taxed punitive), insurance complications, Ontario HBP taxed by IRS. Principal residence sale taxed (tax free in Canada). Phantom taxes appear. Hell, If you receive child support, unemployment, disability, the IRS taxes this as income.

There are so many nasty tax caveats people do not realize.
I am not an expert on international taxes so I can't comment on everything, but something like the TFSA is not taxed in Canada. It may not be recognized in the US as a tax free shelter (just like many countries don't recognize it) , but you are not double taxed on it. Same with any social payments or principal residence. These may be things the US considers income so you are taxed on it, but you are not double taxed on it.

I am assuming mutual funds, REITs, idex funds, etc are not double taxed either, but do not receive the beneficial tax treatment if they are foreign investments. Again, not very knowledgeable on the subject, so just interested in how it works. I know in Canada you don't get the same tax benefits for some US investments either.
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Jul 25, 2008
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If you obtain no benefit from being a US American, give up your citizenship, and stop blaming others for your decision not to do so before you amassed exit-taxable assets.
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There are worse things in life than being taxed on a very obvious high income.
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Mar 7, 2011
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I don't get it. If something you have gives you huge disadvantages and no advantage, why keep it?
Just give it up! Simple and easy.

You're keeping it because you think you're getting more than losing, no? Please tell me why you haven't given it up yet. Patriotism?
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Oct 6, 2015
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speer12345 wrote: We are all double-taxed

Nope. You are not 'double taxed'. You receive a credit for foreign taxes paid against your Canadian taxes, or vice versa. This is not double taxation.

If you're a US citizen and work in Canada, you are probably already paying effective higher tax rates on your Canadian income to Canada, and thus face no taxation at the hands of the IRS.

Its Canadian citizens/residents that work in the US that are potentially disadvantaged, as Canadian income taxes are almost certainly greater than US income taxes, leaving a net amount owing to Canada. However, in most cases, Canada provided heavily subsidized education, etc., so those taxes are effectively a repayment of such.
The US imposes taxation on the tax residents of other coutnries absolutely. You do realize the US has worldwide taxation? USA and Eretriea are the only countries that impose citizenship based double taxation.
That's not true either. Canada has worldwide taxation as do most other countries. There is a process of renouncing US or Canadian citizenship if one wants to go that route.
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burnt69 wrote: Nope. You are not 'double taxed'. You receive a credit for foreign taxes paid against your Canadian taxes, or vice versa. This is not double taxation.

If you're a US citizen and work in Canada, you are probably already paying effective higher tax rates on your Canadian income to Canada, and thus face no taxation at the hands of the IRS.

Its Canadian citizens/residents that work in the US that are potentially disadvantaged, as Canadian income taxes are almost certainly greater than US income taxes, leaving a net amount owing to Canada. However, in most cases, Canada provided heavily subsidized education, etc., so those taxes are effectively a repayment of such.



That's not true either. Canada has worldwide taxation as do most other countries. There is a process of renouncing US or Canadian citizenship if one wants to go that route.
Simply example: Receive disability, unemployment, or child support from Canada and a retirement pension. The IRS taxes this disability income as INCOME. You have no FTC's to offset this IRS tax owed. You decide to use the FEIE (which people believe gives you $100,000 of tax free income) to exempt this disaiblity income from IRS taxes. But wait, the retirement pension is not earned income, thats passive income. Your pension is now fully taxed by the IRS.

Canada has worldwide taxation if you are a tax resident. Canada has residence based taxation. If you were a tax resident of france and held Canadian citizenship, the CRA would not tax you, nor would you be subject to the Canadian income tax act while living in France. The US and Eretria impose citizenship based taxation so if you were a tax resident of Australia you and held US citizenship you will be taxed. If you used the Australian superannuation (Australian pension) it would be taxed punitively by the IRS.

The USA most cease imposing taxation on the tax residents of other countries.

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