Is having a child born into U.S. citizenship the best thing that could happen to a prospective parent from another nation?
No, being born in the U.S. is not always a good thing.I was born in the U.S. myself, and as a result, I need to submit this answer anonymously, becauseu2024 the U.S. treats me asu2026well, I'm not sure what I'm being treated as, but I don't like it, that's for sure.I was born in Champaign, Illinois, to an American mother and a father who was in the country legally after pursuing higher university studies. I stayed the first seven months of my life, and then left the country with my parents. I never spilled for an American passport, never registered for a social security number, and was never employed in the U.S.I visited my American grandparents once every two or three years, went to Disneyland once, spent several holidays touring the U.S., the grand canyon, dropped a few dollars in Vegas, and enjoyed every minute of my tourist experience.I spent a lot of money in the U.S. over four decades.In all that time I never claimed American citizenship, got a U.S. passport, or availed myself of any American governmental services other than driving on its roads and flying in its planes. Why would I? I was and am a foreigner in mind and in economic terms. Claiming to be American when I did not feel like one and when I contributed nothing to the States felt wrong and opportunist. I never felt like I needed or wanted to move there.However, American exceptionalism raised its ugly head and butted me in the face.You see, around the world, all countries except two have a taxation system where every penny earned In that country is subject to various taxes, income tax, employment tax, social security, etc.The two countries which don't do this?Somalia. The essentially ungoverned impoverished country full of war-lords.aaaandu2026..the good old U.S.A.In the U.S., the system is based on taxation of each citizenu2019s income aywhere in the world. When you make money somewhere outside the U.S., the IRS gives you credit for foreign taxes you already paid to the foreign government, and since many countries have higher taxes, it's usually a wash.This sounds eminently sensible and workable, except for the implementation details.For a start, I don't live in a country where the taxation is appreciably higher fort my income bracket.And then , the IRS doesn't give you credit for each tax you have paid, only some of them which match American tax codes. Perversely, they then only let you claim the tax benefeits which were applicable in the foreign country, not the tax benefeits of the U.S.Take your houseIn the U.S. you can get tax credit for mortgage interest paid, but you must pay tax on capital gains when you sell. (simplified, but essentially correct.) In other countries, for example, it's the reverse. No interest deductions, but capital gains on principal residence is exempt.When filing your American income tax, you would be required to pay taxes on capital gains, but would not be allowed to claim mortgage interest payments because they were never part of your foreign taxes filed.So, when I said take your house, the IRS is being particularly unfair, regarding my house...please don't take MY house.The problem is that I learned about this in my forties. Apparently I was supposed to have been filling American income taxes my whole life. I had at least a twenty five year backlog.Similar cases arise for family trusts, tax free savings accounts, and a whole host of other tax areas which exist in foreign countries but not the U.S.How was I supposed to know this? I lived my whole life outside the States. None ever told me, I had never entered the American burocracy or educational system, and never applied for an American passport or social security number. Maybe somehow someone would have told me that I needed to file American taxes at one of those points, but I doubt it. Certainly, no-one ever tells those things to tourists, and it was never mentioned as I cross the border multiple times.I thought I should perhaps rectify this situation, so I contacted a lawyer and an accountant.The result? It would cost me multiple thousands of dollars in specialist accounting fees. The amount at risk would be in the tens of thousands of dollars.Remember, I have never earned any money in the US or claimed any of the benefits of citizenship. I have never actually claimed or filed for American citizenship. All around the world, income earned results in taxes paid where it was earned. That was my status quo, and of course I assumed it was the same everywhere. I had no incentive to find out about the American taxation system, because it was not relevant to me, or so I thought.Finding out otherwise was a shock. It turns out that IRS enforcement of this situation used to be limited to moguls and huge earners, but now was being aggressively to the common man, and I was actually at risk. In fact, the US was reaching into foreign banks and seizing money from accounts registered to U.S. citizens.What could I do? Pay twenty or thirty grand to comply with the IRS? That's half a years salary! My kids need braces, dammit.Can I renounce the American citizenship I never claimed? Yes, if I pay about an extra three grand for the renouncing fee, andu2024 if I file all my back taxes. Sigh.So, I used to go to the States regularly, and spent a lot of money there. Enjoyed myself immensely.Now I can't cross the border without shelling out more big bucks than I actually have or am likely to have. And the U.S. gets none of the travel money I used to spend. My foreign wife and kids can go, but I can't.Think I am exaggerating? Check out the Mayor of London England, who ran into the same problem. He, on the other hand, was rich enough to pay up, which he eventually did.Me, not so much.And I have no member of congress or Senate to appeal to because I don't live in anyone's district or state. When it comes to being a citizen, apparently I don't have the same tools as other Americans. Frankly, if I did use those services, I would be explicitly and implicitly accepting American citizenship by using American services, don't you think?Whatever happened to u201cNo taxation without representationu201d?!All because I was born in the U.S. but never lived there. So now I am a u201cCitizenu201d in exile who can't afford to fix the situation, and who doesn't even want the citizenship in the first place. And the US no linger gets my tourism business, business I would otherwise be quite willing to conduct.Lose, lose, lose, lose, all around.
