tag:blogger.com,1999:blog-2424131704277823220.post5314362920074590873..comments2023-09-23T11:16:00.352+02:00Comments on The Franco-American Flophouse has moved: Diaspora Taxes: Some Basic QuestionsVictoria FERAUGEhttp://www.blogger.com/profile/16319699673885400472noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-2424131704277823220.post-28842746092088902972012-08-27T10:38:37.363+02:002012-08-27T10:38:37.363+02:00@Tim, Oh my! Their description of the US system i...@Tim, Oh my! Their description of the US system is quite frightening. What is really interesting to me is how Americans seem to have no clue how many services are run by the U.S. government. Nor do they seem to realize that many "socialist" countries are quite advanced when it comes to privatization. It's not always a success mind you but it's certainly not unusual. <br /><br />One area where the US has gone private that would be more controversial of Americans were more aware of it is the outsourcing of war. I just finished Corporate Warriors by Singer and then followed that up with another book by Robert Pelton just to get two different takes on it. It's a growing industry and seems to have moved (at least as far as the US is concerned) from basic support services to actual military operations. Are we looking at a future world where it's not about "supporting the troops" but rather "supporting the contractors."<br /><br />The Europeans have taken note of all this. Here is an article from Slate about the French army:<br />http://www.slate.fr/story/15253/armee-francaise-la-tentation-des-mercenaires<br /><br />I look around the Net and many of these stories very clearly use the word "mercenary" something that these private companies prefer to avoid. <br /><br /> I really have to wonder what my father-in-law would have thought of this....<br />Victoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-36219471919475134062012-08-26T05:36:36.772+02:002012-08-26T05:36:36.772+02:00On the subject of government by "user fee&quo...On the subject of government by "user fee" here is a video by "conservative" Reason Magazine praising their Air Traffic Control Reforms in Canada in the 1990s.<br /><br />http://www.youtube.com/watch?v=KaPvJlPnc6ETimhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-41170488990480268792012-08-23T17:09:20.573+02:002012-08-23T17:09:20.573+02:00@Tim, I'll look into it. The most fun we'...@Tim, I'll look into it. The most fun we're having right now was Brice Hortefeux criticizing the socialist government after the Amiens riots saying that there were no such riots under Sarkozy. Huh? <br /><br />http://artgoldhammer.blogspot.fr/2012/08/hortefeux-steps-on-his-tongue.html<br /><br />If you're interested in French politics the above blog is one of the best. <br /><br />I wouldn't count Sarko out. French politicians are quite accustomed to falling out of favor and going into exile for long periods only to return triumphantly years later. Look at De Gaulle...<br /><br />VictoriaVictoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-16388569749831640492012-08-22T20:34:58.466+02:002012-08-22T20:34:58.466+02:00I'll have to think some more if there are any ...I'll have to think some more if there are any others. Another post idea that would be really informative is something on what is going on in the right flank of French politics. I used to be quite informed about French politics when I used to travel their more frequently and when it was Chirac, De Villepin, Pasqua, Juppe and co in charge. Those were the days when it was really bad ass to travel to France and Rush Limbaugh used to rant and rave about the French Assembly and German Bundestag having a joint session as the Versailles Palace. Canada of course was anti war too but never seemed to have a been considered a full blown member of the axis of weasels. Is there any chance of the Chirac/De Villipen old school crowd coming back to take over the UMP from Sarkozy's crowd. (My sense is Sarkozy was a bit of a one man band who is done for good with politics). Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-61301935460466923022012-08-21T08:33:11.105+02:002012-08-21T08:33:11.105+02:00@Time, I think the next post will be about Exit ta...@Time, I think the next post will be about Exit taxes (and I would include inheritance taxes as just another kind of exit tax). It's not been clear to me exactly how they work and I'd like to look at the differences between the countries you mentioned. Besides those 4 you mentioned are there others?Victoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-3432508397864674932012-08-21T05:46:47.282+02:002012-08-21T05:46:47.282+02:00Essentially under an exit tax you are deemed to ha...Essentially under an exit tax you are deemed to have sold all of your property(short of some basic exemptions) and thus would have to pay capital gains tax on the difference in value from when you bought the asset to when you moved out of the country. This is the system when you leave Australia, Canada, and Denmark(and when you renounce your US citizenship).Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-7491060650602693142012-08-20T18:13:22.975+02:002012-08-20T18:13:22.975+02:00@victoria
the shopkeeper was kinda right: it is a...@victoria<br /><br />the shopkeeper was kinda right: it is an horrible thing. <br /><br />What she doesn't get, is that the horrible thing is that they have no incentive to COME BACK, because there is less opportunities in France than in the US or Canada. We certainly don't want to come back anytime soon, even though we love our country very much.<br /><br />Otherwise it would be an awesome thing, because the young would bring back knowledge, money, ideas.... <br /><br />Also, I think expats are a different breed, in the thing that they have a wanderlust in them. We are a small part of the population and always will be, so she should be more concerned about the crimes... of bankers, once again (this is going to be my default argumentation from now on, so you know. All this talk is nonsense until the guys that invented credit default swaps is tried and put in a cell for about 254 years).<br /><br />Ah, the simplistic views of the non expat...CarnetsdeSeattlehttp://www.carnetsdeseattle.frnoreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-68625208256969643232012-08-20T15:51:52.118+02:002012-08-20T15:51:52.118+02:00@Tim, Looking at the whole business it sounds like...@Tim, Looking at the whole business it sounds like some sort of Exit Tax would be much simpler to implement. In the US however, most folks were not even aware that there was one until Schumer tried to get his ex_Patriot Act considered. Overall I don't think it went over very well domestically - lots of comparisons to the former USSR. I suspect that it would be easier to implement in France but I could be wrong.<br /><br />@Loic, Quite an interesting business, isn't it? And yet people get very worked up about it. I was shopping with my daughter one day and the shopkeeper just flipped out when she heard that I had a daughter in Canada. In her opinion it was a TERRIBLE thing to see bright young French running off to foreign places. <br /><br />I'm going to watch "Inside Job" - thanks for the recommendation. Michael Lewis' The Big Short is also pretty good.<br /><br />Victoria<br />Victoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-19079672217275462992012-08-19T07:41:57.710+02:002012-08-19T07:41:57.710+02:00Case A is pretty much a no brainer, just because I...Case A is pretty much a no brainer, just because I don't see countries cooperating at that level anyway. Also, one example: one of my friends spent a year in thailand, getting paid a thailand wage. Getting taxed at the french level wouldn't have worked.<br /><br />Case B is kinda interesting... How many expats are in that case, do you think? Is it even worth the oranizationnal nightmare between nations to handle that case? The guy was probably taxed already when earning the investment money in country A, he will then pay taxes on what he earns in country B, I don't really see a problem. <br /><br />Case C is somewhat more interesting, but as you said being taxed in both countries (or more) could cripple somebody financially. I get the argument that people leaving the country take some value with them, in a way, but the country also receives expatriates from other countries. It probably balances out. In the US's case, it has probably a "positive cash flow" due to the fact that there is probably more exats living in the US than US citizens living abroad. For me it is also a question of democracy. We should be allowed to live where we want, wherever we have been raised. And also our parents paid taxes during our childhood, to pay our share of our education, so the point is a bit moot. <br /><br />All in all, the topic kinda irritates me. I just watched "Inside Job" and the story of credit default swaps. Why the XXXX are we even talking about taxing expats and stuff when bankers just do as they please with our money and create a huge crisis just because they are comitting ernomous financial crimes each and everyday? <br /><br />It should be denounced as such, all this taxes thing is a masquerade, distracting us from where the real problems are. Watch this movie. If even half of it is true, then the scandal is mind boggling and all this talk about taxes in nonsense until the financial sector is regulated. Darn, even it a percent of what is in this movie is true, I would think the same.<br /><br />take care, CarnetsSeattlehttp://www.carnetsdeseattle.frnoreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-90464286391578977952012-08-18T06:18:16.333+02:002012-08-18T06:18:16.333+02:00Here is the problem with the different French prop...Here is the problem with the different French proposals. All of the Tax Treaties France has signed with other countries Canada included specifically block France from imposing non source based taxation on any Canadian resident including French citizens resident in Canada. France could "override" the treaty using the last in time rule but that would unprecedented for France to do that and would risk Canada simply terminating the tax treaty(Canada has treaties with over 90 other countries)which would cause French companies to be highly disadvantaged in terms of Foreign Direct Investment into Canada and terminate any cooperation between the French Tax Authorities and CRA. <br /><br />What is more likely is France would and I believe is in the process of imposing an "exit tax" on departing residents akin to what Canada, Australia, and Denmark do(and the US for renouncing citizens). This would be allowed in accordance with the standard model OECD treaties France has signed over the years. The French Ministry of Finance on the East side of Paris is not the US Congress they aren't going to try to break all of France's treaty commitments no matter what Sarkozy says on the campaign trail.Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-15234467284045860252012-08-16T18:47:43.023+02:002012-08-16T18:47:43.023+02:00Wendell Berry wrote about "a mechanical indif...Wendell Berry wrote about "a mechanical indifference, the indifference of a grinder to what it grinds," which captures something of the whole situation.A broken man on a Halifax piernoreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-13659678616208813582012-08-16T18:00:57.041+02:002012-08-16T18:00:57.041+02:00@Victoria -
It's a frustrating problem in man...@Victoria -<br /><br />It's a frustrating problem in many ways. Basically the US discourages long-term residence abroad through tax policy, but as far as I can tell *not deliberately*, but through a series of unintended effects. I would far prefer it if it was a deliberate policy - it would be much easier to debate. <br /><br />Since Congress requires US citizens abroad to file tax returns, the IRS can present increased compliance as a success, but it's a paper exercise. A broken man on a Halifax piernoreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-58215794277551131012012-08-16T08:59:29.693+02:002012-08-16T08:59:29.693+02:00@A broken man, Oh I agree that the way it's b...@A broken man, Oh I agree that the way it's being implemented now citizenship-based taxation is not at all cost effective. But it could be tweaked to generate more revenue. I think that's what they will try to do. As those 1040's roll in with all zero's, the U.S. gov will nonetheless get a much better idea of what is out there and then they can adjust things to ensure a net gain for the US. Lower the FEIE for example or raise the tax rate on investment income. I suspect that what's happening now is just a fishing expedition with adjustments to be made later when they have more info. Perhaps I'm being paranoid here. What do you think?<br /><br />Hi anonymous, Thanks so much for the link. You are absolutely right that this is a very complicated subject that is fraught with all kinds of emotional/patriotic undertones. What scares me the most about citizenship-based taxation is how it could be used to discourage emigration or to rollback the progress that has been made in allowing dual citizenship. I'm going to look over the French proposal and I've got some info about the existing U.S. implementation and what it does and does not do. That will be the next post, I think. I'm really trying to start from zero here without any a priori judgments in the hopes of trying to understand better where everyone is coming from in this debate. And I really appreciate your comments on this because I'm sure you and others will see things that I don't.<br /><br />VictoriaVictoria FERAUGEhttps://www.blogger.com/profile/16319699673885400472noreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-53046625150804527902012-08-15T20:15:00.150+02:002012-08-15T20:15:00.150+02:00Hi Victoria
A very complicated subject. As you kn...Hi Victoria<br />A very complicated subject. As you know, a law was proposed earlier this year in France to tax French citizens who have expatriated. <br />I am not a proponent of citzenship based taxation because of the numerous complications. What if every country in the world did the same? Those folks who have two, three, four nationalities would be really busy filling out tax returns.<br />I found the text of the proposed French citzenship based taxation law interesting. (http://www.assemblee-nationale.fr/13/propositions/pion4492.asp)<br /> <br />Essentially, French tax is calculated on one's income less ALL taxes paid in one's country of residence. No fiddling around with we tax that but they don't and vice-versa. The real purpose of the law is to prevent tax arbitration and from the frequent references to sportsman in the text of the law, I guess it is easy to see who is targeted! <br /><br />The legislator has included a very interesting exception in Article 5 which offers an exclusion for family or marriage reasons.<br />"Ne sont pas concernées par la présente loi les personnes qui apportent la preuve soit que leur domiciliation fiscale est conforme aux dispositions de l’article 1er de la présente loi, soit que cette domiciliation répond à des considérations visées par la Convention de sauvegarde des droits de l’homme et des libertés fondamentales telles que la vie familiale ou le droit au mariage. Ne sont pas concernées, non plus, par la présente loi les personnes de nationalité étrangère."<br /><br />I would hope that individuals will increasingly become world nomads. Not to escape or lessen their tax burdens, but because that would make the world a better place. More sharing, more understanding, better communications.<br /><br />So, I would be a proponent of territorial based taxation. You pay where you use the government provided services. If it is property only (without residency) then you pay to the country where the property is located because that is where the benefit of government provided services lie. <br /><br />I'm sure it is much more complicated than my simplistic view and of course in hard times everyone wants a piece of the pie.<br /><br />I'll look forward to your further tax "editorials" - very thought provoking.<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2424131704277823220.post-8362840570436764792012-08-15T15:52:47.903+02:002012-08-15T15:52:47.903+02:00Hi, Victoria -
I think the American example show...Hi, Victoria - <br /><br />I think the American example shows that citizenship-based extraterritorial taxation isn't cost-effective, and isn't likely to be cost-effective at any point in the future. (This is separate from the effects on the extraterritorial citizens, which have been discussed at enormous length.) <br /><br />The practice can only really be justified for emotional/political/symbolic reasons; I'd like to see (but don't expect to see) a debate on a cost-benefit analysis of the practice itself. Somebody had to process the 274,766 2010 (paper) returns which showed no tax due because of the FEIE - those costs can be quantified. A broken man on a Halifax piernoreply@blogger.com