Fool.com: Trans-Atlantic Tax Whammy [Fribble] April 25, 2000

Fribble Trans-Atlantic Tax Whammy

By Gmv1uk@aol.com
April 25, 2000

I read with interest the article about the percentage of individuals paying for over half the federal income tax. Here's another little tidbit to consider.

I have lived and worked in England for the last 14 years. I am an American citizen and I dutifully file my U.S. tax returns every year and vote in every election. As I live and work in England, I am subject to U.K. tax, and I pay 40% income tax in England on all of my earnings.

There is allegedly a tax treaty between the U.S. and the U.K. that should give me credit in the U.S. for U.K. taxes paid (and one would logically assume, therefore, that this would negate any U.S. tax arising). Wrong! Due to a little beauty called the alternative minimum tax, I get nailed every year. This really burns me up. Not only do I pay full U.K. taxes on all of my earnings, but I then also wind up being hit with a U.S. liability. In essence, I suffer DOUBLE taxation on at least part of my income.

I've actually considered giving up my U.S. citizenship in protest, though I am loathe to do so, as I love my country and am proud to be an American. Having said that, this entire tax debacle has me so wound up that I have given serious thought to relinquishing my U.S. passport.

And here's the kicker -- even if I did give up U.S. citizenship, the IRS requires me to continue to file for 10 years (that's right, 10 years!) after doing so -- presumably to ensure that they capture every last drop of blood. Does the U.S. government really think this is fair?

Unbelievable.