Friday, May 30, 2014

Land of The Free, Baby, Yeah (IRS Edition)

A few weeks ago, I wrote a post comparing the Japanese immigration system to America's USCIS. Today, it is the IRS that is in my sights. My accountants just provided me with my US returns for 2013, and for the second year in a row (and completely predictably), the accountants cost more than my entire US tax burden.

How did things break down this year? My US returns were 70 pages long this year, beating out last year's 63 pages. In both years, the US collected a whopping 0.3% of my income*, a tiny tax liability I incurred either by traveling to the US on business or having some small US-source income streams that Japan didn't tax.

In contrast, my Japanese returns for the two years were 6 and 8 pages respectively, including things like cover letters. The actual returns are about as long as a 1040-EZ. The Japanese, of course, actually captured the lion's share of the taxes, around 17% of my income in both years. So just like in the immigration systems, Japan again wins hands-down in terms of simplicity and ease of complying with its laws. There is nothing like living in a true Land of the Free, rather than a false one.



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*Note that payroll taxes are an entirely separate issue. I am only talking about income taxes. Fundamentally, I have a choice where to pay payroll tax, and I deliberately choose the US and participate in that system.