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Tuesday, 04 December 2007

Treading Perrier

by Isabel Ortiz.

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A taxing situation: overseas Americans answer to two taxmen instead of one.

As a dual-national Mexican-American living and working abroad, I have grown accustomed to certain indignities that befall overseas Americans.  When I introduce myself as American, I get extreme reactions from many people-either positive or negative-whereas my Mexican passport tends to stir far less emotion.

While living in places like China, Germany, Chile, India and now France, I have frequently been called upon to answer for a wide range of subjects-from war to pollution to slavery-that have little or nothing to do with me.  In many of those conversations, the person on the delivering end of the one-way conversation is not interested in my thoughts or opinions, but is just looking for a convenient surrogate, a sort of effigy to verbally kick around for a few minutes at a time.  In those conversations, I am being punished for the simple fact that I am an American living abroad.  This is one unfortunate but foreseeable consequence of my decision to move abroad.

More surprisingly, however, is how we overseas Americans are punished by the Unites States itself when we move abroad.  You might expect that the U.S. would encourage and assist us; after all, we are here putting a human face on American culture and even American politics, often taking the brunt of an acerbic reaction to U.S. foreign policy.  Many of us, including myself, are even working for American companies, making a real contribution to the American economy.  You would think that the U.S. government would encourage this, but it is actually doing exactly the opposite.

The United States is the only industrialized country on the planet that penalizes its citizens abroad by taxing them back home on their worldwide income.  The only other countries this enlightened and progressive are Angola and North Korea.  We keep great company.

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So here in France, we pay our social charges and taxes just like French citizens and then have to pay Uncle Sam again.  A lot of U.S. companies pay their American expats extra money to cover this burden, costing them millions of dollars each year for no discernible reason.

The result is that there are fewer and fewer Americans like me globetrotting for work, even at American companies.  I don't personally mind being an increasingly rare breed, but it is sad to think of all the would-be overseas Americans who have to stay put back in Iowa-without even having the freedom to make their own choice about whether to live abroad-because they or their employers can't afford to pay their taxes twice.

The optimists say that this is all because of a few individuals in Washington who have it out for us, people who perhaps find something disloyal in our decision to move overseas, even if we're over here working for Boeing, Microsoft, and McDonalds.  I say these people are optimists because, in their view, if it weren't for those few individuals in Washington who hold a grudge, we would be treated the same way as everyone else and only be taxed once; i.e., our problem isn't the whole American system, but rather a few individuals, who of course won't be in power forever.  At the top of this list is a Senator named Charles Grassley.

Tax policy is all about encouraging certain choices and punishing others.  American taxes encourage things like education, retirement savings and renewable energy, while discouraging potentially self-destructive habits such as smoking, alcohol consumption and fossil fuels.  These priorities all seem perfectly worthy to me.  But what exactly is Congress trying to encourage and discourage by taxing me when I am not even living in the U.S.? 

Quotation But what exactly is Congress trying to encourage and discourage by taxing me when I am not even living in the U.S.?  Quotation
Do they want me to move home?  Why?

If they ultimately win and I have to go back, then I know whose doorstep I'll be showing up on-Senator Chuck Grassley.  I'm sure he has a guest room ready for me.

 


Isabel Ortiz
About the author:

Isabel Ortiz is from Mexico City, Mexico.

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