Nazy and I attended an information briefing from the embassy last night. Things went well until the topic of taxes arose. The new ambassador stepped in to the fray.
“Is it true,” I asked, “that the US is the only country that taxes based on citizenship rather than residency?”
“Yes. The only major country.”
“That’s taxation with our representation,” someone in the back shouted.
“Yes, but..” the ambassador was struggling.
“Why can’t we, as expats, have a representative in Congress?” Nazy asked.
“That would require a constitutional amendment. Can you imagine the legislature of South Carolina or Nebraska voting to add 2 more senators? I grew up in Washington, it took 50 years to get a representative there. And we lived in the continental USA.”
“There are examples,” someone said. “Germany, Italy and France allow expats to elect parliament members.”
“That’s true..”
“So, they’re represented and aren’t taxed, while we’re unrepresented and are taxed. Is that right?” I asked.
“Yes,”
“Do you think the tax will be dropped?”
“Of course not,” the ambassador replied. “Just think how it would play on Fox News with Bill O’Reilly: Rich Americans in Zürich want tax break.”
“Ah..”
“Besides,” the ambassador continued. “it raises a fair amount of money..”
“I wouldn’t use the adjective ‘fair’ to characterize the money,” I interrupted.
“.. a substantial amount of money. And in this era of unbalanced budgets...”
It turns out that the tax was established during the Kennedy administration because “all Americans should pay taxes”. Studies show that the tax has made it more expensive for Americans to work abroad and, as a result, has increased the trade deficit. The 6,000,000 Americans abroad have no political voice and nothing will change. They admitted that the tax caused lots of Americans Abroad to simply drop off the radar.
Tomorrow: the foreign bank account form.
The photo is from Lake Geneva near Montreaux
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