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Comment by roenxi | Hacker News Reader

The US government basically claims jurisdiction over the entire global financial system. There are philosophical problems with this stance, but simultaneously the government seems to be trying to lock its own citizens out of that system.

The strategy here, if there is one, baffles me. There seems to be a real cost to taking on US customers. This is just one small facet of a crazy problem.

Do people in America seriously consider it an acceptable trade-off when "Binance blocks U.S. residents from its website"? This just looks like own goal after own goal.

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The strategy is to maintain control of the global financial system, and therefore control of the entire world.

They don't need to worry about people or organizations already within the realm of arrest/extradition/freezable-assets, they can squash them whenever. It's only the people and orgs outside that realm that pose immediate risk...especially when the org's product involves holding large chunks of wealth.

I think binance was allowed to run a separate USA-specific operation, but this was simply to keep everything within the mentioned realm.

> The strategy is to maintain control of the global financial system, and therefore control of the entire world.

I disagree because it sounds more limited to only control over US citizens. US citizens are the biggest losers in this arrangement.

The cost of taking onboard US customers is always a big issue. Particularly related to insurance. We build open source mobile apps to help people learn about and manage digital security. When we first setup our company in the UK we easily got insurance coverage across the EU and rest of the EMEA for about a few hundred pounds. Want to get if for the US also for a new company? Oh that'll be in the tens of thousands of pounds.

It makes for good Lawyer and Hospital series, the US legal and healthcare systems are filled with emotional (and particularly financial) drama for normal people.

i'm interested in is why it's so much more expensive in the US. Is it monopoly? Why couldn't similar prices be reached in the US, if the insurance offered the same in the EU region?

Companies in the US have a far higher chance of losing big expensive lawsuits.

In Europe lawsuits tend to be both cheaper and rarer.

Exactly.

> Do people in America seriously consider it an acceptable trade-off when "Binance blocks U.S. residents from its website"? This just looks like own goal after own goal.

The people who decide these things are not accountable to the public.

Sure they are. This just isn’t an issue the public cares about. Citizenship based taxation has been the law of the land since it was brought in to punish deserters in the civil war. Americans broadly don’t care though. They should - America is the only country on earth to do this - but they don’t. Apathy towards an issue you care about isn’t the same as lack of accountability, IMO.

Yeah I’m not seeing the accountability.

They’re accountable to people who don’t care about your issue, that’s not a lack of accountability. Accountability doesn’t always mean you agree with the direction or outcome.

> America is the only country on earth to do this

Eritrea taxes overseas citizens as well.

Quite right, although they are of course not in a position to enforce this; certainly not in the way America is. I suspect while they say they do, the number of returns they actually get can be counted on one hand. So yes in theory, probably no in practice. I’ve always wondered though if you have some data I’d love to see it!

The tax rate is 2%, and it is estimated to bring in about $100m annually,[1] which is about 5% of Eritrea's $2b total government revenue for 2017.[2] For comparison, US annual revenue from overseas taxation is estimated at $870m.[3]

There are about 1.5m overseas Eritreans,[4] and at least half of them are estimated to be in compliance.[1]

1. https://www.researchgate.net/publication/320584172_The_2_Tax...

2. https://www.cia.gov/the-world-factbook/countries/eritrea/

3. http://www.offshorenewsflash.com/2015/08/19/is-fatca-chasing...

4. https://www.bbc.co.uk/news/business-47934398

Thank you!

Every time this is brought up I ask the same thing.

Has anyone living abroad ever been liable for US taxes? Most people I know or talked to file taxes abroad and never have to actually pay the US.

Yes, I know individuals that have needed to dual file and pay. As I understand, they get credited for some amount of taxes paid to the local jurisdiction, so if they live somewhere with a higher tax load and collect a modest salary, they aren't actually paying Uncle Sam. This may explain your observation.

If they live someplace with lower taxes or earn a high enough salary they end up paying both jurisdictions. For the individuals I knew, the company accounted for this by paying them some relocation bonus for a few years to offset the additional expected tax load.

Exactly this. Plus, some tax treaties don't include types of income beyond salary/wage - think income from investments, self-employed/contracting, etc.

I know of 2 people that have received notices abroad (third world country) about paying US taxes. Neither of them have lived in the us since the early 1970s

Turns out if you are a retiree living your golden years in a low tax jursidiction, you are pretty much ignored.

However, if you want to just live your life elsewhere and dare to end up successful, (for example, buying property >100k) somehow the US government seems entitled to your earnings.

British Prime Minister Boris Johnson was quite vocal about being having to pay taxes to the US until he renounced his American citizenship in 2016.

https://www.forbes.com/sites/robertwood/2019/07/24/prime-min...

Renunciation also of course has high fees and a massive tax burden. One is required to pay taxes on all of their assets as though they disposed of them on their last day of citizenship or leave (I believe) 30% in a trust to the IRS should it be illiquid.

Anyone whose started a small business while abroad is the proud owner of a controlled foreign corporation and required to file form 5471. That ones a mess. The reporting requirements alone are a massive burden, between preparation fees and opportunity cost.

I feel like big government types who like lots of regulation probably don’t see the inability to use binance as a loss.

Two subtypes: 1. I’m poor and I don’t want to see anybody else getting rich. 2. I’m super-rich and I want everybody else to be poor.

Who exactly does this help?

Binance created the subsidary binance.us for US customers, they have some restrictions due to US laws. Generally the US market is too valuable to be ignored entirely, even when there are significant restrictions. So US residents aren't really missing out or blocked entirely.

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