By Robert Wood
I recently received a copy of a letter to First Lady Michelle Obama from a formerly dual U.S. and Canadian citizen, who chose to give up his U.S. citizenship. It speaks to some of the reasons that record numbers are renouncing their U.S. citizenship. The letter is reminiscent of Dear Mr. President, Why I'm Leaving America. The author noted that the letter to Mrs. Obama was a response to a political missive in which Mrs. Obama sought support for the Democratic Party in the upcoming Presidential election.
But the issue is far deeper. The broader context is America's global tax system, worldwide reporting, FATCA, FBARs, and all of the ways in which the United States has made life difficult for U.S. persons abroad. That includes those who are just over our northern border into Canada. Canadians may be famously civil and reasonable, but a few are now saying I Am Canada, Hear Me Roar.
"Dear Mrs. Obama:
I gave up my U.S. citizenship this year, so I cannot vote. And if I could, I wouldn't vote Democrat. It's not that I hate liberals. I am one. And the Republicans honestly make me sick. The bottom line is America has lost its way in this world, and neither party, in my humble opinion, is going to make any headway in making it better.
I have lived abroad most of my life. This is my 46th year in Canada. I married Canadian, my kids are Canadian, not American, I have worked my entire life in Canada. I invest here, and will retire here. I am Canadian, but as you are likely aware, giving up that USA brand is not easy. I have many relatives living in the 50. I used to love to visit them. At the moment, I couldn't care less if I ever cross that border again.
This brings me to my main reason for handing in my passport: you are still taxing me. I hope you continue reading, as I get the sense that homelanders typically shrug off our complaints as sour grapes and tax avoidance. It is anything but. My issues are fundamental. My issues are based on American values and the Constitution. Since those values and the Constitution have failed me, I am gone, as are thousands of others. It is a national disaster, that in my opinion, will be a black mark on your husband's legacy.
I want you to consider the duty to file and pay taxes based on citizenship. It sounds patriotic, and all red, white, and blue, but I'd like to reword it for you: "citizens shall pay taxes to the United States because the U.S. owns them." They do not have the right to walk away from this obligation, despite what the United Nations proclaims, because the U.S. owns them.
They are chattel. They are economic slaves. I am being treated as a slave. I live, work, and pay taxes in Canada, yet my master needs his payment. The concept is against everything I consider American.
Consider also sovereignty of foreign nations, something I can't claim the U.S. has ever respected. The U.S. does not allow foreign countries to step in and tax its businesses and its citizens at home, its economic contributors. America's practice of taxing its citizens abroad is basically what Mr. Trump accuses Mexico of doing: sending its citizens to America to generate dollars to send home. It is a despicable concept which the Democratic Party has rightly laughed at. Yet this is what you do with citizenship-based taxation, FBARs, and FATCA.
You tax monies earned abroad by your citizens. You tax capital gains on private homes in the UK. You apply Social Security and Obamacare taxes on mom & pop businesses operating overseas. You tax lottery winnings considered tax-free economy boosters in foreign lands. Your actions pirate money from foreign economies, and you pretend it is okay because we victims are American.
We are not the only victims. Our families, our communities, and our host nations all suffer from your syphoning. You steal funds, jobs, and debt. America is the biggest tax cheater of them all. The fact that you justify it based on patriotism is disgusting to me, and to almost all of the 8.9 million citizens abroad.
I could write all day about how I am personally abused. I cannot invest in mutual funds. I face invasions of my privacy and my family's privacy. I cannot save for retirement, cannot open the financial accounts my neighbours can, etc. America upping its fees to prevent us from leaving is nothing more than extortion. The American government is nothing more than a disgusting bully. If I could still vote, I'd vote for the worst of the opposition, because I hate what your husband and his cabal are doing to American citizens like me.
A Canadian, no longer American, in New Brunswick, Canada"
This article originally appeared at Forbes.com.Back to Articles Back to Robert Wood
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I’m a tax lawyer based in San Francisco (www.WoodLLP.com), but I handle tax matters everywhere. I enjoy untangling a tax mess from the past, disputing taxes with the government or planning taxes for the future. One of my specialties is advising about lawsuit payments. Whether you’re receiving or paying a legal settlement, you can probably improve your tax position. I write frequently about taxes, from expatriation to sales tax, from selling your company to restitution. I’ve written over 30 tax books, but my best seller is still Taxation of Damage Awards and Settlement Payments. Contact me at wood@WoodLLP.com.
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