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Why should off-shore income be taxed?

Khaos_Mage
Posts: 23,214
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5/28/2015 9:47:32 AM
Posted: 1 year ago
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?
My work here is, finally, done.
xus00HAY
Posts: 1,380
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5/28/2015 11:38:47 AM
Posted: 1 year ago
Because you have so much more than we do that we can't help but resent it. Besides you have already had more than your share of good luck.
RebHart
Posts: 1
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5/28/2015 11:39:30 AM
Posted: 1 year ago
simple answer: there are those that have, and those that are socialists. Everyone is a socialist until they have money and these people believe that whether you have money through hard work or money through chance (e.g. winning the lottery) it is simply not 'fair' that they do not. Thus they think that the Robin Hood approach of taking from the rich to give to the poor is the only way to attempt to solve the inevitability of social inequality. And that, Ladies and Gentlemen, is the definition of the tax system.
Although you may say this if 'unfair', I say to you this: "I used to believe that life was not fair, until I realised that it is fair: by the way in which it treats everyone unfairly"
lannan13
Posts: 23,024
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5/28/2015 2:34:36 PM
Posted: 1 year ago
At 5/28/2015 9:47:32 AM, Khaos_Mage wrote:
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?

No, because you are still an American citizen and you are making that money. Thus it is still taxable by the federal government even if it's made in another nation.
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slo1
Posts: 4,318
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5/28/2015 3:54:15 PM
Posted: 1 year ago
At 5/28/2015 9:47:32 AM, Khaos_Mage wrote:
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?

Rather self explanatory. Nobody who lives in the US would have a interest bearing account in the US, if income were not taxed. The M3 money supply in country would not support the needed investment to grow GDP.
slo1
Posts: 4,318
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5/28/2015 4:11:41 PM
Posted: 1 year ago
At 5/28/2015 11:39:30 AM, RebHart wrote:
simple answer: there are those that have, and those that are socialists. Everyone is a socialist until they have money and these people believe that whether you have money through hard work or money through chance (e.g. winning the lottery) it is simply not 'fair' that they do not. Thus they think that the Robin Hood approach of taking from the rich to give to the poor is the only way to attempt to solve the inevitability of social inequality. And that, Ladies and Gentlemen, is the definition of the tax system.
Although you may say this if 'unfair', I say to you this: "I used to believe that life was not fair, until I realised that it is fair: by the way in which it treats everyone unfairly"

Put your keyboard away Rush and go back to your radio show.
Khaos_Mage
Posts: 23,214
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5/28/2015 6:34:52 PM
Posted: 1 year ago
At 5/28/2015 3:54:15 PM, slo1 wrote:
At 5/28/2015 9:47:32 AM, Khaos_Mage wrote:
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?

Rather self explanatory. Nobody who lives in the US would have a interest bearing account in the US, if income were not taxed. The M3 money supply in country would not support the needed investment to grow GDP.

So, then, why don't other countries do this? To my knowledge, USA is the only one, or one of the few, that taxes repatrioted dollars.
Also, why does this not apply to earned income? If I work overseas for an American company, I do not pay American income taxes.
My work here is, finally, done.
slo1
Posts: 4,318
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5/28/2015 7:50:20 PM
Posted: 1 year ago
At 5/28/2015 6:34:52 PM, Khaos_Mage wrote:
At 5/28/2015 3:54:15 PM, slo1 wrote:
At 5/28/2015 9:47:32 AM, Khaos_Mage wrote:
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?

Rather self explanatory. Nobody who lives in the US would have a interest bearing account in the US, if income were not taxed. The M3 money supply in country would not support the needed investment to grow GDP.

So, then, why don't other countries do this? To my knowledge, USA is the only one, or one of the few, that taxes repatrioted dollars.
Also, why does this not apply to earned income? If I work overseas for an American company, I do not pay American income taxes.

Other countries do it. If you work overseas for an American company, you do pay income taxes. You just get an exclusion upto a certain amount.

http://www.irs.gov...
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

The reason why it makes sense to tax foreign interest earned without exclusion is because a country wants to have a healthy banking industry and 300 million people's savings adds up to a heck of a lot more overall value to the economy than the taxable amount of foreign earned income up to $100k of X number of people.
Chang29
Posts: 732
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5/31/2015 10:36:18 AM
Posted: 1 year ago
At 5/28/2015 9:47:32 AM, Khaos_Mage wrote:
Assume the following:
I win the lottery, I pay my taxes on it, quit my job, and put my money in a bank, where I live off the interest (approx $80K), of which I pay taxes on.

However, I also put a few million in a bank in another country. where I earn interest, but it just stays in that account.

Why should I pay taxes on that interest, if it was earned outside of the USA?
Assume that the interest from the other country is wired into a local checking account with my other interest. Why should I pay US taxes on money earned outside the US?

Great question, I would also like to know why foreign banks must report new accounts opened by a U.S. citizen. Money deposited from overseas income and spent overseas should not even be reported American authorities.

If a U.S. citizen earns income in a foreign country, both governments want a "fair" share. Income earned outside of America should not be taxed.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.