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Why Are People Leaving the US, Part 4

Why Are People Leaving the US, Part 4 post image

Reason 4: Patriotism

I hear you…”Wait, Jeff, patriotism?  Seriously?  How can you call someone wanting to leave…a patriot?

To answer, I remind you that around 250 years ago, when families were so frustrated by their country’s tyranny (England), whose ancestors had fled, they chose to struggle in a new country (United States)?  They desired a free life, liberty and the pursuit of happiness.  Today, we call those people our founding fathers, our country’s first and original patriots.  (Happy 4th of July today, in fact!)

Yes, I do consider someone who believes strongly in personal freedoms as a patriot.

It’s Not Your Fault if You’re Blindly Patriotic

Don’t take it personally, but if you believe the United States is strong or “going well,” that’s not patriotism.  Blind belief in the government does not make one a patriot.  It never has.  A patriot thinks for his or herself.  A patriot questions authority.  Patriotism is not blind faith in a government.

No worries, it’s not your fault.  It’s just a matter of timing.  Not so long ago, the US encouraged freedoms and liberty -even proudly founded herself upon them.  Today, however, we have the Patriot Act (wiki and critique) which goes way beyond discouraging liberty.

 

Benjamin Franklin, a Domestic Terrorist?

Before you start whistling the Star Spangled Banner, be careful.  The patriot of yesteryear is now a potential bad guy for the US government today.

In fact, if Thomas Jefferson or Benjamin Franklin were around and talking today, they would be jailed as domestic terrorists.

The Department of Homeland Security labels someone a domestic terrorist when they …:

  • make “expressions of libertarian philosophies.”
  • express “fears of Big Brother or big government.”
  • “declare Constitutional rights and civil liberties.”
  • exercise self-sufficiency (stockpiling food, ammo, hand tools, medical supplies)
  • homeschool (if you teach your kids outside the Dept of Education’s curriculum)
  • buy certain books (in fact, these two by name: One Second After and Patriots: Surviving the Coming Collapse

(source for these here)

Question: if I publish the above, should I fear any consequences?  Sure, I don’t picket in front of the white house, but here I am, suggesting you abandon the US for reasons above.  Does that alone make me a target?  Take the case of Susan Lindauer, a well-connected, productive and intelligent woman who voiced her concerns too loudly against the US govt.  Her world got spun around so fast it made me sick to my stomach.

Okay, So How Do I Protest As a “Patriot”?

1. Leave.

Leave now.  Cash out your chips like you’re leaving the casino.  Sell your home, your securities (funds, stocks, options) and cash out your pensions.  Take the money and run.  Run like the wind.

2. Reinvest.

Decide on a new place that more suits you and your patriotic needs.  When you (and your cash) land in a safer, freer, more stable country, then the patriotic thing to do is reinvest in that country, for yourself.  Purchase property and/or a business there.  A new life requires new equity and new income.

3. Protect Yourself (at tax time).

US citizens must file a tax return every year.  And that goes for US citizens living abroad, too.

Yes, when living abroad, working abroad, even if earning zero US income, you must still file a US tax return every year, plus a couple extra forms just for expats (more on those below).  Yeah, I think it’s bullshit, too.

BS or not, US citizens are required to report their worldwide income, regardless of residency. You know what?  To my knowledge, the United States is the only country that requires this of its citizens.  Write me if you believe otherwise and we’ll talk.

 

p.s. Two Extra Forms at Tax Time (for US citizen expats)

I’ve written about tax time before, but these 2 forms are too important to ignore: the 2555 and the FBAR.  Filing out those extra forms isn’t optional.

Yes, the Internal Revenue Service tries hard to persuade any US citizen against living abroad.  Well, as a patriot, you don’t care what the IRS is against.  Right Benjamin?

The 2555 is the “Foreign Earned Income” form, which basically says you can earn up to $92,000 tax free (for 2010).  (Remember: Even if you earn under $92,000, you must still fill out this form to say you did.  In short, you must file, even if you simply didn’t earn anything or owe anything – that’s the IRS for you.

The other extra tax form for expats is the FBAR (Foreign Bank and Financial Accounts).  You can thank the Department of Treasury (not IRS) for this one.

The FBAR requires you to list your foreign bank accounts (and report the highest balance you had over the year).  I have filled out the FBAR for many years and I’ll never stop, because I’ll always have foreign bank accounts.  Thankfully, the FBAR is actually relatively easy. The last good reason is, over the past few years, the Dept of Treasury has gone crazy in prosecuting non-complying expats.  (Remember the idea of hiding money in a Swiss bank account?  Not any more)

If you’ve never heard of the FBAR and you’re considering filing it, read this article here.

The tax filing deadline for US citizens living abroad is June 15th (postmarked as mailed out).  For the FBAR form, the deadline is June 30th (must be received by).

 

Anyway, I’ve been sitting on this post for a while and I’ve got to publish it.  I wish you all a Happy 4th of July, wherever you are.
If you’re in the US, celebrate your home’s independence.  If you’re outside the US, celebrate your own independence!

 

If you’re looking for other popular reasons people leave the US, read up on Frustration, Adventure and Seeking an Improved Life.

 

{ 16 comments… add one }

  • Anonymous July 3, 2011, 12:51 pm

    Lovely post and very intelligently put! Keep up the good work, I do enjoy reading your thoughts.

  • Mike Stankavich July 3, 2011, 7:48 pm

    Jeff, I came to very much the same conclusions over the last couple years. Filing my first FBAR a few weeks back really brought home how unfree the land of the “free” has become.

    In addition to your action plan, I’m making a concerted effort to transition from a credit based lifestyle to all-cash, paying for everything in advance. I’m down to a car loan and a personal loan from family. Both should be paid off by early next year unless my side business craters and costs me a bunch of money. And that’s not likely – there’s so much opportunity here if I can just pull together all the pieces.

    • Jeff July 3, 2011, 8:16 pm

      Mike,

      Always a pleasure to get a comment from you. And I’ll say I admire your effort to go cash. While I think we agree a greater benefit is privacy, it does also help conserve spending (something about physically removing cash from our wallets, I guess).

      All the best to Marissa and the girls.
      -Jeff

  • FutureExpat July 14, 2011, 4:59 pm

    Taiwan will tax you on non-Taiwanese income if you are working in Taiwan, have non-Taiwanese income regardless of its origin, and live in Taiwan at least 183 days per calendar year. This applies to you even if you are not a citizen of Taiwan.

    http://www.ntat.gov.tw/county/ntat_ch/ntat_en/en9-04-2-10.jsp

    There is an exemption amount and I’m not sure how many foreigners would actually end up paying it , but the fact that Taiwan tries to tax you on overseas income, even if you aren’t a Taiwanese citizen, is not much better than the USA.

    • Jeff July 14, 2011, 5:45 pm

      You’re right Susanna about Taiwan: they definitely tax worldwide income (regardless of the source country).

      Surprisingly, many countries do the same as Taiwan – tax a resident’s income (in-country or not).

      Where the USA stands apart is, US citizens are taxed on worldwide income, regardless where the citizen lives. That is very different, essentially telling its citizens “There is no escape from our income tax.”

      Fortunately, there is the Foreign Income Exclusion and the amount has been rising for several years running (even surpassing inflation). But filing that mandatory form is an added, costly service which scares many would-be expats away.

      I hope you agree – the benefits of living abroad far outweigh this added form.

      Thanks again for commenting!
      -Jeff

  • Tina October 20, 2011, 4:57 pm

    So, what’ll happen if I choose NOT to file my taxes?

    • Jeff October 20, 2011, 7:25 pm

      Hi Tina,
      If you decide not to file taxes, then it’s like you’re going to Las Vegas.
      You gamble for the “win.”

      If you choose not to file taxes, Maybe Nothing Happens (that’s your ‘win’).

      Or, for the ‘loss,’ maybe you incur penalties by the IRS (assuming you’re a US citizen). But you assumed that, right?

      What kind of penalties? Here is what the IRS answers:
      “The IRS will file a substitute return for you, which will not include any additional exemptions or expenses you may be entitled to and may overstate your real tax liability. Once the tax is assessed the IRS will start the collection process, which can include placing a levy on wages or bank accounts or filing a federal tax lien against your property.”

      And what about the FBAR form (reporting foreign bank accounts)? Those penalties are $10,000 per discovered, unreported account.

      Have I ever known anyone who personally suffered these penalties? No.
      But I do know plenty of people who would, if the law were enforced.

      In the end, it’s up to each of you to decide on the risk involved. And of course, risk means weighing both probability and consequences.

      Please keep in mind, I am NOT a financial advisor nor do I play one on TV.

      For all my tax concerns, I believe in just one guy: John Mohr. He’s a personal and corporate tax expert and has done my taxes for the past 4, wait- 5 years.
      John owns and operates under http://www.CFO2GO.eu

      -Jeff

  • Mike Stankavich October 20, 2011, 7:31 pm

    I’ve also heard a lot of good things about http://www.greenbacktaxservices.com/. The owner is a friend of a friend, currently living in Bali. I hope to meet him one of these days.

  • Duckie December 15, 2011, 5:37 pm

    loved the advice for expats. I was an expat for ten years of my life as a kid being drug around the world with my parents. I am considering getting the hell out again. One possible solutions to the expat tax issues. Leave the US for good. Pick your new homeland become a Citizen and fly the middle finger at the IRS. They cannot tax non-citizens who do not live or make any money in the US, or have anything to do with the US. When I was younger being a US citizen with a US passport had it’s perk. most places had a customs line for US passports and one for everyone else. These days the only thing a US passport gets you is targeted. Now a days when I travel the only thing I seem to notice is everyone hates the US.

  • Misty May 20, 2012, 2:53 am

    Do you have to file taxes when you move to another country if you don’t file taxes while you’re living in the USA. I am a disabled Vet and get VA Comp and SSDisability??

    • Mike Stankavich May 20, 2012, 3:51 am

      Good question. You might try asking my friends at http://www.greenbacktaxservices.com/ that question. They specialize in US tax returns for expats.

    • Jeff May 20, 2012, 8:33 am

      Misty,

      Your question is “Why should I file taxes living abroad if I don’t file in the US?”

      My answer is: You should file your taxes, regardless of where you live. Yes, your VA comp & SS disability are tax free, and you may owe $0 year over year. However…we, you (& every US citizen) are still obligated to submit a tax filing every year.

      We’re obligated to file our taxes, period. And, as US citizens, we’re even obligated to file when we live outside the country, on all worldwide income. We’re “special” like that. :-)

      My friend Mike recommends someone, and I’ll recommend our accountant, too. Consider my friend and accountant: John Mohr. He is found through http://www.CFO2GO.eu
      John prepares our taxes filing for 2 countries (US is one of them).
      Highly recommended, but I’m not certain that he’s taking on new people outside US residents and expats in Czech Republic.

      Lastly, if you want to learn more about how the IRS treats people who do not file, read my reply above to Tina’s comment.

      Best to you,
      -Jeff

  • Worried June 14, 2012, 6:49 am

    I wish I could pack up my family and leave the USA. My family has been greatly affected by the housing crisis and the job crisis. I have two options my husaband and I can both work and pay thousands of dollars on health costs for my two children or One of us not work and get medicaid and barley get by. I am trying to save enough to one day pack us all up and leave. I don’t plan on filing taxes in the USA after we leave because I plan on giving up my US citizenship. My dream is that one day my children will live in a “FREE” country.

    • Jeff June 14, 2012, 7:02 am

      Hi “Worried,”

      Suitable name, since I’m worried for you. Sorry to hear about the situation you and your husband are in. And I believe a lot of Americans are in the same boat (which makes it even harder).

      Maybe someday you will leave. There is definitely easier, cheaper living outside the US! But I’m afraid you should plan to file taxes after you leave for at least a few years. No one can “give up” citizenship, we only replace it with another. It takes a few years to gain a new country’s citizenship, usually 3-10. In the short-term though, you’re could be living on a small fraction what you’re paying now.

      best,
      -Jeff

  • Maria July 26, 2013, 10:55 pm

    I am a U.S. citizen, but I have lived in other places. I am educated, CPA and have a bachlor’s in Biology and Chem. I am concerned about finding work in another country. I am having a difficult time finding work in the US even though I have 10 years of experience. I work as an accounting “Temp” at Dell now with no benefits and they are sending all of our jobs over to Malaysia. I have experience in Taxes. Perhaps, I could be a U.S. tax advisor in another country? I am thinking I want to leave the U.S.A. I have a lot of family in Scotland, but I would end up unemployed because my CPA license is worthless. I need advise.

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