Taxation – the long arm of the IRS

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I just filed our taxes this morning* after hours of preparation. Lots of hours.

Did you know that the United States and Eritrea are the only countries on the planet that require their citizens to file a tax return regardless of residency?
eritrea_us_map

All the other countries in the entire world enforce taxation based on residency, meaning if one lives in the country one is obliged to file in that country only. The United States, and Eritrea, base taxation on citizenship. This shakes out to Americans, and Eritreans, who are living abroad having to file two tax returns, one for the country in which they reside and one for their country of citizenship.

And they better do it, or else.

The Long Arm of the IRS

American expats are threatened with prison and outlandish fines merely for not filing a litany of complex forms correctly—even if no taxes are due in the first place.
Nick Giambruno, Senior Editor Internationl Man

three flagsThere is a tax accord between the U.S. and Canada to avoid double taxation but that is scant consolation. For us, two self-employed workers living in Quebec, the process is tedious. We must use the long 1040 form. The rate of exchange is different between countries so all the amounts must be calculated using a yearly average. Money earned from U.S. sources in U.S. dollars must be converted to Canadian dollars and vice versa. The fact that the province of Quebec has its own peculiar taxation rules is another rub.

Adding insult to injury, one must file a return to the IRS by snail mail (!) from wherever one is living. No e-filing. This is a royal pain.

Why does the U.S. do this?

The first U.S. income tax was enacted in 1861 during the Civil War

… to prevent wealthy people ducking their military and civic obligations by fleeing the U.S. in its time of crisis. John D. McKinnon, Wall Street Journal

Taxation based on citizenship didn’t catch on with other countries, instead they opted for taxation by residence or source of income. But the U.S. stuck with its system.

Plenty of folks are pissed about it. Americans Abroad is one organization working to change the situation. There might be some relief in sight but nothing will happen quickly.

What’s with Eritrea?

This small African country charges a 2% “diaspora” tax on all Eritreans living abroad. If those citizens don’t pay up, their families back home face persecution. The Canadian government has taken a hardline against this tax. The United Nations passed a resolution condemning Eritrea’s diaspora tax, calling it extortion. In a startling example of hypocrisy, the United States co-sponsored the resolution.

If Eritrea’s 2% Diaspora Tax is such an egregious example of extra-territorial tax oppression, how does the U.S. escape the same treatment? Don Whiteley, TESFA News

And there’s more

720px-US-FinancialCrimesEnforcementNetwork-Seal.svgDid you know that the U.S. requires any citizen living abroad to declare whether they have more than $10,000 in assets in any kind of bank, savings account etc.? All Americans living abroad must file a “Financial Enforcement Crimes Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR)” or be faced with heavy fines — $10,000 the first offense. The FBAR form comes emblazoned with a nifty scary official seal. Somehow the U.S. government has pressured other countries to report the status of bank accounts belonging to U.S. citizens, essentially doing the U.S.’s spying tracking for them.

Take that thought in.

The Price of Exiting

If someone is tired of dealing with the burdens her citizenship adds to her life outside the U.S., she can denounce her citizenship but it’s going to cost. First, she will owe a filing fee of $2350 then a hefty percentage of her assets. This “exit” tax is all but prohibitive for a modest middle income person. For billionaires, it is doable but costly and inconvenient nevertheless.

Billionaire Eduardo Saverin, co-founder of Facebook, did renounce citizenship in 2012 which brought a lot of attention to the issue, if not a lot of empathy from the less endowed.

 

Aaah yes. Money does make the world go round.

 

*The Canada due date is April 30 unless that date falls on a weekend, then the next business day is the due date. For example, this year, 2016, it is Monday May 2.

Just the Facts, Delegate Math

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yourvotecountsBefore everyone starts throwing around accusations that the 2016 U.S. presidential primary is rigged or that their candidate of choice is being cheated in the process, take the time to look at the facts. It is straight ahead math based on political party rules.

Again, with a quick consult with the Google one can access clear explanations of how the U.S. primaries work.

– Government 101 explains presidential primaries

– How Stuff Works explains how presidential primaries work

– I like the Bloomberg delegate tracker

– This NPR article lines out where Hillary and Bernie are now before Tuesday 4/26/16 primaries in PA, RI, CT, MD, and DE.

The current presidential candidates from both parties are playing by the rules, so far. (Not like the shenanigans in 2008.)

If you don’t like how the parties allocate delegates, well that is a whole ‘nother can of political worms. You ought to start working grassroots now to change the rules in your state.

Politics is a long game.

A Liberal Vagina in the Oval Office

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canidate_comparisons240pxI have decided to enjoy the prospect of a competent human with a vagina in the White House. This is historic and definitely something to get excited about and support.

What astounds me is how the candidate running for the presidency, who has “lady parts”, incites some voters to apoplexy.

I understand those on the political right slamming Vagina H, but I am shocked at the attacks from the political left especially when her policies are verifiably liberal. Rankled Penis B supporters throw around some of the worst misinformation with scant regard for the facts, essentially echoing decades of GOP media smears.

It takes but a few minutes with the Google to check out a politician’s stances on the issues.
On the Issues, a web sight that compiles all of the elected officials voting records is illustrative. Vagina H is essentially as liberal as Vagina E. Imagine that! Penis B is to the left of both but not by much at all. All three are rated as “hard core liberal”. Hard Core Liberal!

Here is another fun comparison from the BBC.

And this from US News:

Bill is a genuine centrist. Hillary is not. On numerous issues, she sits to the left of her husband and of President Barack Obama.

So don’t get your bitches britches in a bundle. Enjoy making history.

And, do worry about Penis T.

Live and Unusual

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Yesterday, at le Vieux Port, in a plaza in front of the Museum of Archeology and History of Montreal at 2pm (14:00), we enjoyed a surround sound outdoors “symphony”.

The work, composed by a trombonist named Scott Thomson, was realised by bagpipers, drummers and several musicians working multiple horns on large ships frozen at their docks and a train horn on a locomotive nearby.

The piece was around 15 minutes long. The pipers and drummers moved around adding spacial contrast. The horns were loud but pleasant.

I loved the concept, the sounds, the audience engagement, the use of public space for collective joy. I particularly liked a section with cascading drums rolls which began after a large deep ship horn blared. At that point the drummers were 50 plus feet apart. The rolls echoed off the stone buildings in waves.

I would love to compose for this. It is right up my alley.

Les Symphonies portuaires de Pointe-à-Callière (The Port Symphonies of Pointe-à-Callière) are presented by the Musée d’archéologie et d’historie de Montréal. This was the 22nd year.

If you are in Montreal next year, don’t miss it.

This short video (1:30) gives a taste of the event.

Gary and I followed the concert with a walk along the waterfront and then a nice steak dinner at the Keg.

A perfect day.

Steel Poppies – Les Forges de Montréal

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nuit-blanche-2016-afficheLast night I went to Les Forges de Montréal, a coal smithy, to view blacksmiths forging poppies out of steel — les coquelicots en acier. The public demonstration was part of Montréal’s annual citywide celebration called “La Nuit Blanche” which features 200 or so activities, mostly free.

Les Forges de Montréal is located in an industrial area down near the St. Lawrence river (map). The building is very old. It is surrounded by freeway overpasses, large silos and rusty warehouses. Inside was warm, the walls glowing from the coal fires. It was noisy but not annoyingly so.

I loved being up close to the workers and watching the hot steel be shaped, twisted and punctured. Forging metal is one of the big accomplishments in human history — mythological and magical, civilizing and utilitarian.

These blacksmiths are joining others from around the world in forging poppies for a “Poppy Cenotaph” to commemorate soldiers who had died, were wounded or displaced in World War I. The cenotaph” (I had to look that one up) will be created in Ypres, Belgium in September 2016 and will include 2016 poppies. The official Ypres 2016 site has fascinating information about the memorial, forging, World War I and more.

My grandfather enlisted in the Canadian Army and went to France in WWI. His military career was not illustrious — the subject of another post — but nevertheless he was there in the thick of one of the worst wars.

More info about blacksmithing.

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