I’m not feeling very patriotic today.
Part of my mood stems from the thought of today’s hearing by the U.S. House Judiciary Committee on the Stop Online Piracy Act. The SOPA legislation currently winding its way through the U.S. congress would allow the U.S. Department of Justice, as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement. The bill would also make unauthorized streaming of copyrighted content a felony.
In a typical vast overreaction to a threat of a limited group (remember the Patriot Act?), the SOPA bill risks enshrining Internet censorship and crippling the Internet. I recommend Fred Destin’s post on Five reasons why SOPA is luddite legislation to understand how braindead Texas congressman Lamar Smith’s sponsored bill is.
The other item chapping my hide is the fact that I just submitted my U.S. tax return for last year. As an American working in France, I am required to file two tax returns: one with the France fiscal authority and a second with the U.S. IRS. The U.S. is one of only two countries in the world that taxes its citizens globally, no matter where they live, work, and pay taxes. So every year I have the luxury of paying taxes on my French income, and then an additional chunk to Uncle Sam on my same French income. Granted, there is a limited foreign tax credit, but all in, I’m contributing between 60% and 70% of my gross income to both governments.
I don’t mind paying French taxes and social charges, even their elevated amount. It’s the U.S. IRS’ demand of its pint of blood for income that I earn and am already taxed on in France that I find particularly egregious. This is double-taxation without representation. Adding insult to injury are the myriad penalties on many French investment products (like IRAs and mutual funds), rendering such vehicles so costly as to be unpalatable. No wonder that many Americans living overseas refuse to play by the rules. I’d like to see the “tea party” take on this cause with as much fervor as their other ideas.
Worse yet, the threat of new tax legislation called FATCA will increase the obligation of Americans worldwide on all of their financial assets. Foreign banks in particular will bear a significant reporting burden. An officer of a large French retail bank mentioned to me that if FATCA is implemented, his bank will likely no longer accept American customers due to the associated costs.
Americans living overseas are the foot soliders in the U.S. government’s battle to win hearts and minds. We could represent the States’ ambassadors writ large, but sometimes it feels like we’re being treated as traitors.
Bogle on carried interest | satisfy my soul wrote:
[…] Perhaps as a VC myself, I should fall firmly on the side of keeping the carried interest tax at rock-bottom. However, I have two major objections to not raising it substantially. First, financially, I am not in the same boat as GPs in the U.S. The effective carried interest tax in France is over 30% when counting all auxiliary social charges. Moreover, as a U.S. citizen with a French salary, I am paying tax to two countries, setting my cumulative effective income tax rate at an obscene 67%. So Romney pays 14%; I pay a whopping two-thirds. I find this infuriating. […]
Link | February 17th, 2012 at 20:32