The last time I checked, I would have to earn around 110,000 USD before I would have to pay any US taxes, though having to file every year is definitely a hassle. Meanwhile, renunciation costs 2,350 dollars and requires quite a bit of paperwork on top of that. As far as I know, nobody has ever lost Japanese citizenship as a result of failing to renounce another citizenship. In short, I am prepared to do it if necessary, but I am definitely not eager to go through all of that.
(That said, the law in Japan could change, and it seems like they are moving toward being stricter with dual citizenship if recent court cases are any indicator. In particular, there was a recent case in which Japanese dual citizens in Europe sued for the right to openly possess both citizenships, and they were denied, though that in itself does not strip them of their citizenship automatically.)
I work with a lot of well educated people from other countries here in the US, most of whom have the goal, if not already attained, of getting their US citizenship. Of course, they also intend to keep their original citizenship.
Dual (and more) citizenship never made much sense in my mind. Seems you should have an allegiance to one country, in the (hopefully) unlikely event Things Go Horribly Wrong. And doesn’t having more than one passport make it easier for folks to squirrel around the world, potentially hiding their tracks? (Think of the terrorists!) Dual citizenship kinda smells a little like polygamy. I’m sure other questions have crossed my mind over the years about the concept of being a citizen of more than one country. I sincerely would like to learn more.
Regarding US expats having to send tax money back home (or is it still home?), maybe it can be considered as an insurance payment in case anything bad went down. They can still call up the US consulate and some green berets would swoop down in a Blackhawk helicopter and pluck you out of whatever crap you found yourself in. Like in the movies.
I am not now, nor have I ever been an American citizen. But I know a few who were born outside the US, to American parents, and who have citizenship by descent. They’ve never lived in the US.
About a decade ago, they learned that they always had to pay US income tax, and if the IRS ever came asking they’d have to pay back-taxes over their entire working lives so far. Each mentioned their lawyers suggesting an option (among many): keep quiet, and don’t visit the US ever again. Renouncing their citizenship would only put them on the radar.
I’ve worked as an expat, and I get that if my home is in one country and I’m making money in another, it makes sense to pay for the roads and schools and hospitals around my home. I think that’s a good thing.
The idea that I’d have to pay for the roads and schools and hospitals in a country I’ve never lived in and never used the roads and schools and hospitals seems very on-the-nose. But that’s the position these folks are in.
Speaking as a dual citizen myself, there are plenty of non-shady practical reasons related to family and work and safety and just plain convenience why it’s useful to hold two or more passports and/or citizenship statuses. These reasons usually have little to do with nationalism and, in certain cases and on certain levels, can represent a rejection of nationalism (I claim no such lofty reason myself).
Not really. Other countries provide consular services to citizens abroad without taxing them abroad as well. The U.S., like most other countries, rarely has occasion to send in the military to rescue citizens abroad in distress. Most of the time when things go bad the response of the U.S. involves diplomats and civilian charter flights rather than weapons and soldiers.
As a U.S. citizen I currently don’t mind paying what taxes I owe according to treaties even though I spend more and more of the year out of the country as it goes sideways. If the country turns into an effective one-party authoritarian state (like that GOP paragon of Putin’s Russia) I would mind very much, though.
This happened to expats in the US, too, but the Canadian article was handy. I remember the US closed the Eritrean consulate in LA. Expats could no longer remit payment, which would seem to be a good thing, although (IIRC) the non-payment led to threats against family members back home.
The Eritrean “diaspora tax” was also based on ethnicity rather than nationality (a big no-no under international law) and was being used as a shakedown and intimidateion tactic against political opponents who’d fled the country. In those ways it was different from the current (but perhaps not future) application of the U.S. expat tax regime.
I fully expect China to follow the Etrirean model (absent the ethnic basis) in the next decade as it gains enough clout. They’re already threatening family members of students and workers abroad who dare to criticise Xi and they just implemented their own version of the U.S. expat tax in 2020.
Thanks for the thoughtful reply @gracchus. After I wrote that yesterday, that exact thought did cross my mind, that having multiple passports can very much be seen as a rejection of nationalism.
I happily renounced in 2015 (before it was cool). I’d moved to Canada, put down roots, and decided I was never returning to the US to live. Every year that goes by, I’m happier I did it, especially since it seems like it is continually getting harder to renounce. Now, both of my kiddos are US citizens and they will need to make a tough choice when they turn 18: relinquish within 6 months, or live the rest of their lives with the crucible of US citizenship.
There is a very important distinction between relinquishing and renouncing. When you relinquish your citizenship, it is immediate and free. You can just walk into any US consulate and prove that you are able to do so. Renouncing is the tough one, which takes years, you need to pay a lot, and if you do it in the wrong way, you are screwed for the rest of your life.
There are several conditions that allow you to relinquish (and I can’t remember all of them now), but two of note are:
You are between 18-18.5 years old and you prove (or)
You have taken an oath to be part of another country’s government. So, if you are an elected official, or in a foreign military, this applies to you.
I think that is not true. If you fill out a form with the US IRS and send them a copy of the taxes you paid to another country, you are good with them. They just expect you to pay tax somewhere.
More or less. If your foreign earnings are high enough, you still have to pay the US some tax, but this threshold is pretty high, into six figures I think.
Also, (at least when I lived in Canada for a time in the late 1990s-early 2000s) you can deduct your country of residence’s income tax from your US income tax. As Canada, like nearly every other developed nation, has higher income taxes than the US, I would file US income tax but paid nothing. Pretty much the only people who have to pay US taxes while living abroad are those who moved to tax havens.
The fine print is that only those lucky Americans living in countries with social welfare equivalence treaties get off so easily, for everyone else you still have to pay the Social Security and Medicare portions of your tax, unless you are actually working for a firm that pays them for you, or you have done the rolly-do where you declare yourself a corporation and then name yourself an employee of MeCorp, which somehow makes it so that you don’t have to pay into social security (or so sez some accountants specializing in expats).
So, if you work for yourself, or for a Japanese company, you have to pay quarterly SE tax to the IRS based on your total earnings, minus the part you paid in taxes within Japan and then doing some worksheets on housing costs abroad and all. But, as a rule of thumb, you’re supposed to put 15% of your income into the kitty at the IRS, though you then get the credits for it and can draw Social Security.
Nobody knows all this part, and for over 12 years I just went along with the ‘I don’t earn enough to have to pay US taxes, so I’ll just file later or never’ plan.
Until the covid stimulus checks lured me in - and dang if I didn’t end up in a huge crisis in 2020 when I found out all this stuff. And once you’ve started filing and ‘find out’ you owe money, you can’t really claim ignorance, so I ended up doing an amnesty program and getting caught up - since I live in a kinda 3rd world country where my retirement is liable to be under 300 dollars a month, I figure that all in all, having some SS isn’t a bad plan.
The thing is, 99% of those with USA citizenship living overseas have an actual tax bill of zero dollars. None. Nada. Most countries have dual taxation protection, so the taxes I pay to Germany are credited to my US tax burden.
But. (Yeah, there is a but)
I have to fill out a massively complex form to confirm this. Just because I don’t owe taxes doesn’t mean I am freed from filing. And the form is a pain in the ass. It is a tax accountant’s wet dream, with confusing language and it took me several attempts and several months once I finally got around to filing it. But I did it myself, because fuck H&R Block and all the other bloodsuckers that wanted 400 USDollars to tell the IRS I owed nothing. It’s not even all that complicated, really, since I have no stateside assets!
I may use this info, though, together with the onerous cost to plead hardship and get German citizenship without renouncing.
On a practical side, if I were to renounce my USA citizenship to participate in German elections as a citizen, it would mean I could never return except as a tourist. Not a pleasant thought as my parents get older.
Here’s my way of thinking: I am not a subject, I am a willing participant and with citizenship I express my desire to keep participating. Why should I have to declare loyalty to only one side? It’s like asking a child to decide in a divorce which parent to live with, with no more visiting rights—long before a divorce is in the works.
Under the prior administration, the fuckers were trying to strip the citizenship of immigrants served in armed forces but got in legal trouble. Then you also have the people triggered by “anchor babies”. Natural born US citizens under the 14th Amendment.
If Trumpies no longer want to be US citizens, good riddance. Renouncing US citizenship should come with deportation and ineligibility for entry as well.
