On Sun, 21 May 2006 14:25:36 +0800, "riverman" wrote:


"Calif Bill" wrote in message
k.net...


And are not those British taxes deductible, or a credit against US taxes?

Hi Bill (et al),
I wasn't going to discuss this here, because I know that its beyond
understanding of most folks in the states. They hear 'tax exemption' all
their sympathies go out the window, and are replaced with thoughts like 'I
pay my taxes, you should pay yours' and 'gee, I wish I had an $80K
exemption' and they miss the details. Its the inability or unwillingness to
consider those details that enables things like this tax law to get passed
in the first place.

Let me explain the details one time, then I'm EOT because the talk I've seen
here shows me that my frustration is not understood nor sympathized with,
and instead (knowing the history of this forum), people here love to get all
piranha on each other when they see someone truly upset, as I am.

First of all, and speaking only for myself, I'm not getting "piranha" on
you, I'm simply reacting and commenting on what _you_ brought up. First,
you chose to be an expat and the rules were much the same when you chose
it. And there's a possibility that your taxes won't be affected in the
least:

"But under the new system, this tax exemption on housing will be capped
at $11,536, although is some cases the Internal Revenue Service could
adjust it based on geographic differences in the cost of living."

Yes, I realize _could adjust_ and "the IRS" in the same sentence aren't
much comfort, but I'd offer that generally the IRS winds up being, at
the end of day, somewhat fair, either by accident or from external
pressure. Look at per diem rates for travel deductions.

And something else from the article you cited:

"But many Americans abroad protest that it unfairly targets them. The
Joint Committee on Taxation in the U.S. Congress estimated that the new
measures would cost $200 million a year in taxes for the 4.1 million
Americans - excluding military personnel and Foreign Service officers -
living abroad."

That's an average of 50USD per taxpayer, and from the article, it
appears that those in the higher income range with the bigger perq packs
are going to carry the lion's share of the burden.

And there's the "The United States is the only developed country that
imposes worldwide income tax on its citizens working overseas." bit.
First of all, it's misleading. Ask a Brit about working in France or
vice-versa, what with that little slice of heaven, tax-wise. And if
either one fails to properly plan, it can get _really_ ugly. But would
either be considered to be working "overseas" as contemplated by the
article? IAC, citizens of "developed" countries are most certainly
taxed on income earned outside of that developed country and in these
countries, there are much the same complaints as well as suggestions
offered as to how to avoid taxation issues.

One example comes to mind. We are friends with a family whose most
senior living generation were born in eastern Europe of a German father
and an English mother pre-WW2, but went to New Zealand in the late 30s.
The three senior siblings live in NZ, Switzerland, and the US, having
married citizens of those respective countries. The kids (my
generation) began life as NZers, but now live in Belgium (works there,
married and divorced from, but still quite friendly with, a Swiss
citizen), England (single, works worldwide), France (married to a German
citizen, both work in Paris), and Australia (married to a NZer, both
work there). Of the next generation, only one child is of age, and she
grew up in Belgium, was graduated from college in England, and now works
in Japan. I've yet to hear any say they happily paid taxes with a smile
on their face. And we have friends from just about every corner of the
globe, and I've yet to run across anyone, of any socio-economic class,
who feels they are being unfairly undertaxed.

What's the bottom line? For me, it's when someone who has made their
own bed complains that it isn't comfortable AND blames it on someone
else. I know for a fact that a teacher (for example, a US high school
teacher with a Masters in a mid-sized district - "middle of the road")
in the US can retire fairly comfortably with a reasonable bit of
discipline and planning (a regular contribution into an
educational-employee-only TSA, for example) and can, with some serious
discipline and planning, retire a millionaire with an rise in
"lifestyle." If the path you chose precludes this, again, that's on
you, not Bush, the IRS, "rat *******s," or anyone else.

FWIW, Wayne's advice some professional help is good advice and might
be what you need. If you can't afford the fees upfront, perhaps look to
investment-type advisors who make their money when you make yours.
Google up "tax sheltered annuities for educational employees" for ideas.
I realize that TSAs themselves may not be what you need, but it'll give
you a place to start.

TC,
R