Tax 'hammer' takes toll on Americans abroad

Monday, November 9, 2015
 | 
Chris Woodward (OneNewsNow.com)

FATCA web pageAn American expatriate says a taxation issue in his homeland is having adverse effects on millions like him who simply want to work, save, and live their lives without being hammered by the government.

OneNewsNow reported earlier that the tax burden in the U.S. has become so great that many Americans are leaving both their country and their citizenship behind. Keith Redmond, an American living overseas, says many of those individuals are painted in a bad light by a false narrative.

"There are a number of homeland American journalists who have maligned us in the media, always associating us with wealthy tax cheats living the high-life overseas. That is the furthest from the truth," he tells OneNewsNow. "We are average people, just like in the United States. We're trying to work, save, and just live our lives."

The problem, according to Redmond, involves the Foreign Account Tax Compliance Act (FATCA) – a law that requires financial institutions in other countries to give the IRS information on things like assets and transactions. While FATCA is designed to crack down on tax evaders, Redmonds likens it more to a "sledgehammer trying to catch a few ants."

"Through intergovernmental agreements, banks are being forced with the threat of a 30-percent withholding penalty on any U.S. transactions to identify U.S. citizens and – quote, unquote – 'U.S. persons,'" he describes. "These banks have deemed having U.S. citizens or 'U.S. persons' as clients is not the risk they want to take."

As a result, Redmond says he and many other Americans overseas are seeing their banking and checking accounts closed. In certain countries, he adds, Americans are being denied mortgages or having their mortgages revoked on their homes.

Based on this, Redmond says many Americans overseas feel as though they have no other choice but to rescind their citizenship – and he argues it's not because they don't want to pay taxes.

"The fact is that we do pay taxes, most of the times at higher rates than if we lived in the United States," he continues. "We pay those taxes where we live, because that is where we live, and also for the infrastructure where we live and for the benefits and services that we get where we live – in France, Germany, Singapore, Hong Kong, Australia, etcetera."

According to Redmond, written requests to Congress and the White House have resulted in no reply. "... The majority of us now feel ... betrayed by our U.S. government because we cannot survive," he concludes.

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