This was one of the most scathing articles I have seen in the the American press about USPs abroad. (http://www.marketwatch.com/story/tax-dodgers-are-proudly-un-american-2012-05-04?link=MW_latest_news)

With people in the press writing articles like this, it is no wonder homelanders have the wrong opinion about us.

The Isaac Brock Society

Editors Note:  Al Lewis has now written an excellent article telling the our side of the story.  Thanks, Al (and welcome to the Isaac Brock Hall of Fame!).

Al Lewis tries to shame former Americans in this hit piece at marketwatch.com a subsidiary of the Wall Street Journal.  Perhaps you should have spoke with at least one person who ever renounced his or her citizenship.  Shame on YOU, Mr. Lewis and shame on your editor for allowing you to publish.  That just makes you a bigot with a platform.  It is to the shame of the brain-dead media that such pieces of journalistic refuse can even see the light of day.  Please, next time you want to write a screed that punishes a class of people for their actions, do your homework, like the young, promising Reuter’s journalist, Atossa Abrahamian, who actually spoke with numerous people who had renounced…

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  1. @Al Although I was initially really upset by your article, in hindsight this is an opportunity to bring the issues to the forefront, clarify the extent of US policy, and permit concerned US Persons Abroad to debate with people in the US media who seem historically to have concentrated 95% of their media coverage on the extraterritorial tax issues of the very wealthy (“whales”). I think the American people; especially “homelanders” need to know what is really going on.

    The reality is, US policies especially crush middle class USPs (US Persons = Green Card or US Citizenship) Abroad whether they are tax compliant to the US or not. The reporting requirements of FATCA and FBAR (FATCA having apparently been passed as a rider to the HIRE act without much real open Congressional debate on the issue) are causing US Persons abroad, many of whom are dual nationals of their country of residence or a third country, to lose their jobs, be refused even basic bank accounts, and be shunned by prospective non-USP business partners who don’t want to deal with dual-reporting and taxation requirements to the IRS.

    Most working and middle-class “minnows” abroad pay local, regional, and national taxes in the countries where they live, as well as VAT, excise and other taxes and fees. Whether these taxes are lower or higher that what they would pay as “homelanders” (USPs resident in the US) is immaterial. They all pay their fair share where they live according to the local system negotiated through whatever political means extant. They have to deal with the advantages and the drawbacks of their local countries’ system and do not need and often cannot survive with the additional variables imposed by the IRS.

    US extraterritorial taxation policy does not take into account the disparities caused by the shift in exchange rates (thanks perhaps largely to US “quantitative easing”) that pushes people into higher US tax brackets despite no increased local purchasing power, the cost of living in each foreign country, as well as the tax structure in the foreign countries (for example, some countries have a much higher VAT than the US sales tax, but VAT paid outside the US is not eligible for a Foreign Tax Credit in the US).

    US Double Taxation also takes money rightfully earned in a foreign country out of the local economy, where USPs should be free to spend or invest their money. Non-USP family members of USPs are also adversely affected, despite having no allegiance to the US.

    Working and middle-class USPs have recently reached retirement age to discover that they have outstanding US tax liability, or while having no US tax liability due to the (limited) Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC), might owe confiscatory penalties on foreign tax-deferred or tax-exempt retirement plans that were not reported to the US (see FBAR). Many USPs abroad renounce because their pensions would not count as “Earned Income” and they could not survive if they paid US double taxes.

    As Just Me encouraged you to do, I would also welcome you to read extensively on sites such as http://www.isaacbrocksociety.com , http://www.aca.ch and many other sources and sites that are cross-referenced on these sites.

    I would also encourage you to seek to interview “minnow” USPs abroad to get their side of the story. Recently, one of our founding members at Isaac Brock, Peter Dunn (“Petros”), was interviewed by a similarly-named Indianapolis financial radio talk-show host who had initially taken a very dim view of USPs abroad renouncing their ties to the US, but who came to understand our dilemma. See http://isaacbrocksociety.com/2012/04/20/radio-interview-with-pete-the-planner/

    American Citizens Abroad has also participated in a series of radio interviews in the Geneva region: http://www.aca.ch/joomla/index.php?option=com_content&task=view&id=504&Itemid=97.

    I wish you good luck in covering these issues and trust that you will be more objective in the future while seeking the truth and the whole story.

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