Monday, March 19, 2007

Migration and Freedom 2: Taxing residents abroad

Another interesting news below -- that some Americans living abroad are giving up their US passports and their citizenship because while they pay taxes in countries where they are currently based andworking, they also have to pay taxes to the US government! Mr. Bush is really desperate in finding revenues to pursue his war in Iraq andAfghanistan (and possibly preparing for a future war in Iran and N.Korea?), finance local welfare at home, as well as paying its severa ltrillion dollars of public debt.

The number of Americans renouncing their citizenship while basedabroad may be small compared to total population of US expants aroundthe world, but the acts are more symbolic and could be on anincreasing trend. Over-taxation, no matter how "noble and lofty" the stated purposes as promised by the politicians in power, is always reprehensible.

More Americans abroad giving up citizenship for lower taxes
More expats say taxes make it too costly

By Doreen Carvajal
Published: 2006-12-17

PARIS: She is a former U.S. Marine, a native Californian and, now, a former American who prefers to remain discreet about abandoning her citizenship. After 10 years of warily considering options, she turned in her U.S. passport last month without ceremony, becoming an alien in the view of her homeland. "It's a really hard thing to do," said the woman, a 16-year residentof Geneva who had tired of the cost and time of filing yearly U.S. tax returns on top of her Swiss taxes. "I just kept putting this off. But it's my kids and the estate tax. I don't care if I die with only one Swiss franc to my name, but the U.S. shouldn't get money I earned here when I die."

Historically, small numbers of Americans have turned in theirpassports every year for political and economic reasons, with the numbers reaching a high of about 2,000 during a Vietnam War-era boom in the 1970s. But with new tax pressures facing American expatriates due to legislation enacted in Washington this year, some international tax lawyers say they detect rising demand from citizens to renounce ties with the United States — the only developed country that taxes its citizens while they are overseas. Americans abroad are also taxed in foreign countries where they reside...

A related short article I wrote last week,

Can globalization be managed?

NO. No one can "manage" globalization, whether nationally or internationally. If you want to manage something, then you need "managers" to do it. And who can be the "managers" of globalization? The US president? WB president? the IMF managing director (MD)? the WTO president? the UN Sec-Gen? the ADB president? the Chinese PM? Mr. Bill Gates? The founder of WEF? Bono?

All the names above and other names others can supply, only attempt that they can "manage" globalization. At most, I think we can call them as "trying-hard managers" of globalization. The most they can do is to put various restrictions on the movement of people, of goods and services, of capital and technology, into a certain "pace" that they want to control.

Globalization is a phenomenon naturally invented by the people around the world themselves, largely as private citizens, not as bureaucrats and politicians. Maybe they don't like their neighbors or relatives, that's why people move to another place or country. Or they hate their politicians and government, so they move to another country. Or they are paid well in their current company, but someone is willing to pay them 2x, 10x for the same work, so they migrate abroad to another company. The reasons for the mobility of people, their skills and knowledge, across the globe are as numerous as the stars at least in the Milky Way galaxy.

The internet and the web is the quickest and easiest way to bridge communication across billions of people around the globe. There are losers and winners in globalization and people mobility. The same way that there are losers and winners in isolationism and chaining people to their places.

(See also, Migration and Freedom 1: World Cup, brain gain and OFWs, February 02, 2006)

No comments: