Several weeks ago, my brother sent me an article from the Financial Post — and my life changed in an instant.
My brother and I were born in the United States, but we left as teens. I have lived and worked in Canada for close to the last four decades, as a proud Canadian citizen.
The article talked about the fact that the U.S. is the only country in the world that taxes its citizens who are neither living in the U.S. nor working there. Even if American ex-pats are not earning an income there, the U.S. government is still able to tax them.
But it gets worse –- in its supreme arrogance, because our neighbor to the south is broke and in considerable debt, it is now bullying folks like me, by laying down the law saying that all of its citizens must pay U.S. taxes, regardless of the circumstances. And if any non-resident citizens choose to be ‘non-compliant’ and not file up to several years of back taxes, they could be punished by facing stiff fines of up to 25% of their entire financial worth, and maybe even go to jail. The jackbooted tone of the warning was clear. The IRS meant to scare –- and it worked.
After reading that article, I felt like a deer in the headlights.
I was frozen, scared, confused –- how could this be?
I grew up in the U.S. until I was 18, when I emigrated to Canada with my family. When we proudly became Canadian citizens in 1974, we were compelled to forfeit our American citizenship. I recall having some mixed feelings about that, as the U.S. was the country of my childhood. Later, when I was given the opportunity to take back my U.S. citizenship, I jumped at the chance –- after all, I asked myself, what could it hurt to be a citizen of the two countries that I loved?
I now have my answer to that question. It hurts a lot.
I have neither lived nor worked in the US since 1974, when I went back for only one year to spend some time with my father. For the past 38 years, living and working in Canada, I have gladly supported my country financially with my tax returns every year. Never once have I been ‘non-compliant.’
I am a person who felt fondly toward my country of origin. I have enjoyed going back to the States when I’ve had occasion to do so. I cared about who became the President of the United States — and what that would mean for Canada and the world at large — so I made a point of voting in the last election. Little did I know that all of this would come around to bite me on the butt.
Voting in the last presidential election, I suppose, technically prevents me from crying ‘taxation without representation’. But it’s unlikely that my ‘representative’, President Obama, is likely to heed the cries of outraged ex-pat constituents like myself, who live and work in, and have adopted, another country as their homeland.
So, really, where is my ‘representation’? I am angry and I am hurt, to put it mildly.
I hate the fact that I seem to have no say in this –- I am but a number in this complex cog, this blatant tax grab. I am so furious with the U.S. that I now want to renounce my citizenship. But guess what? There’s another Catch-22. In order to renounce my citizenship, I have to pay at least 6 years of back taxes.
Although I am but a number, I am one of close to a million Canadians who are facing this exact predicament. These are tax requirements so complex and labyrinthine that virtually no citizen can prepare them without paying a lawyer or tax advisor. Accountant fees alone will cost each of us, on average, $15,000 –- in addition to assessed back taxes.
Many of the Canadians affected, like myself, are either retired or close to retirement age, when we have only a fixed amount of money to live on — which only adds insult to injury. But because there are so many of us dealing with this brazenly unfair and crippling U.S. tax situation, we have a voice –- and our Canadian government (which works for us, which we often forget) needs to help us –- NOW.
The Globe and Mail reports that, ‘Ottawa has protested to the Obama administration that the law goes too far and may violate Canadian banking and privacy laws. But the U.S. appears determined to press on.’
It is unfair that tens of thousands of Canadian seniors are losing their hard-worked-for retirement income (earned in Canada) in their golden years. Ottawa will have to pick up the burden if their retirement nest egg no longer supports them for the years they have left to live, thanks to the Yankee tax collector.
I am not usually a political animal, and even when I have strong feelings, I rarely write about them and share them with the world. But this is different. This is outrageous.
If you –- or someone you know –- is facing this absurdly nasty situation, please let your thoughts and feeling be known. We need to find a way to band together and rally our elected officials to change the policy now in place that allows the U.S. to do this to Canadian citizens.
Canada always talks about America as our good neighbor to the south; our biggest trading partner and ally.
Well, America doesn’t feel like my ally right now.
It feels like the neighbourhood thug who just hit me over the head and stole my purse.