Puerto Rico to Seek Debt Moratorium From Bondholders

[kitler53]

SamuelRSmith said:

Ka-pi96 said:

Wait, Americans have to pay tax to the American government even if they live and work outside of America? They would also be taxed by the country they are actually working in though right? Poor Americans

It's confusing. They have to declare their income anywhere else in the world. Each year, the US Gov't sets a level at which expats don't have to pay tax on, usually around 100k USD. You can then also deduct the tax you paid in that foreign country.

So, an American living in Britain earning £150,000 a year. In the UK, that will roughly be £90,000 after tax and insurance. £90k is ~$140k. You then deduct the 100k that the American gov't "allows", meaning that you will have to pay tax on the $40k (which will probably be zero or very low).

Contrast with an American living in Hong Kong on the same wage, where the post tax income would be about £135k, or $215k. After the foreign deduction, the tax would still be on $115k, which will be a substantial amount of money.

EDIT: What makes the situation even worse is that, actually, the US Gov't also does this to their corporations. American corporations have to pay corporation tax on their profits made in other countries. Apple selling Chinese made iPhones in the UK, the American Gov't takes a slice of that! America is the only country in the world that does this (I think there's a couple of other small South American countries that do the same), and it also has one of the highest corporate tax rates in the world.

 

How to make $30 billion and pay no corporate income tax, the Apple way

 

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