# Clear up some myths about USA for me, please



## McIntosh (Jun 20, 2008)

Hello,

I've heard some myths about the US over the years. I'm hoping you guys can clear some of them up for me.

True or false?:

*- Alaska*
* No income tax in Alaska.
* You can still claim (in certain areas) a piece of land and make it your own. (like in the Klondyke years)
* Every year Alaskans are payed royalties for oil etc that the state earns money on.

_*- Montana*_
* There are no speed limits.

_*- All states*_
* Everybody can buy and own a gun.
* Everybody can apply to get a permit to carry a concealed gun.
* Cars cost next to nothing.
* When you own a plot of land, you REALLY own it. (instead of the quasi-communism stuff we have in Europe)
* When an American citizen moves to another country to work, he/she will STILL have to pay taxes to America. (are they exempt from paying in the country they work in, then?)

Enlighten me, please.
Thanks.


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## Tiffani (Dec 4, 2007)

McIntosh said:


> Hello,
> 
> I've heard some myths about the US over the years. I'm hoping you guys can clear some of them up for me.
> 
> ...


Dunno about Alaska or Montana, but in most (if not all) states it is legal to purchase a gun... states differ on their waiting periods and requirements for ownership, but generally criminals and mentally ill people aren't permitted them (there are loopholes of course as in most laws) and most states have a waiting period so you don't go shoot your wife who's in bed with her lover out of anger -- you have to wait 30 days to shoot her!

Everyone can apply for a concealed weapons permit; approval of the application is another matter entirely. But again this varies from state to state.

Cars: I guess it depends on what you mean by "next to nothing". We recently moved from the US to Australia. In the US we had bought a late-model used Hyundai Elantra with plenty of warranty left for about $8500 with CD player, power windows and doors, keyless entry, and automatic transmission. In Australia we paid $14K for a 2004 Hyundai Getz with power windows and doors, CD player, automatic transmission, and plenty of warranty (no keyless entry tho). it's a smaller car, and sort of like a wheelbarrow, for twice the money. 

When you own land, you own it... what do you mean by "quasi-communist stuff"? How can you only partially own a piece of land? Unless you're still paying for it from the bank, then the bank technically owns it, but the assumption is that it's yours, just like a house. Can you be more specific about the context here? I don't really understand the question...

Americans have to pay tax on any income they earn in the US even if they live abroad. I will pay Aussie taxes on my Aussie income, but US taxes on income from investments etc. But the tax system in the US system is so confusing that it's anybody's guess, really...


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## Fatbrit (May 8, 2008)

* Everybody can buy and own a gun.
Nope! Felons for one can't -- legally anyway.

* Everybody can apply to get a permit to carry a concealed gun.
Nope -- it's state specific. May require conditions (e.g. education) and usually requires a license.

* Cars cost next to nothing.
US cars are cheap -- but quality is bad and design is old. Large trucks and SUVs are particularly cheap at the moment -- you can pick up a US-made V8 truck with all the trimmings for little over $20k since gas prices hit the roof. For prices, try Edmunds.com.

* When you own a plot of land, you REALLY own it. (instead of the quasi-communism stuff we have in Europe)
Nope -- government still holds eminent domain. In addition the following may restrict use: zoning, codes, covenants, restrictions, homeowner associations. Principle that land cannot be alienated leads to easements.

* When an American citizen moves to another country to work, he/she will STILL have to pay taxes to America. (are they exempt from paying in the country they work in, then?)
US citizens are liable for tax on their worldwide income. Foreign income is exempt for the first $80k or so. In addition, tax treaties may alleviate burden.


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## synthia (Apr 18, 2007)

McIntosh said:


> Hello,
> 
> I've heard some myths about the US over the years. I'm hoping you guys can clear some of them up for me.
> 
> ...


* No income tax in Alaska.

There is no state income tax in Alaska. You still must pay federal income tax.

* You can still claim (in certain areas) a piece of land and make it your own. (like in the Klondyke years)

I don't know about this one, but if it is true, it won't be anywhere near anything.

* Every year Alaskans are payed royalties for oil etc that the state earns money on

That's still true, I think, but the amount has been shrinking.

* There are no speed limits

That used to be true, except that it was illegal to drive in a manner unsafe for conditions. Then they had limits because of federal rules. When the federal rules were lifted, Montana dropped the speed limits. Road deaths skyrocketed. The limits were put back on.

* Everybody can buy and own a gun.

Adults without criminal records or mental defiiciencies can buy and own a gun. The gun must be registered with the government and the owner will be given a gun permit. A background check will be run before the gun is sold, unless it is purchased at a gun show.

* Everybody can apply to get a permit to carry a concealed gun.

Some states don't have concealed carry laws at all. Florida's, for instance, is fairly new. You have to complete a training course to get a permit to carry a concealed weapon.

* Cars cost next to nothing.

Compared to some countries, this is true. 

* When you own a plot of land, you REALLY own it. (instead of the quasi-communism stuff we have in Europe)

Haven't a clue what you mean because I don't know anything about European property law.

* When an American citizen moves to another country to work, he/she will STILL have to pay taxes to America. (are they exempt from paying in the country they work in, then?)

America taxes its citizens on their worldwide income. There are exclusions for those who live abroad, for a portion of their foreign income, in the $80,000-90,000 per year range, I think. Any money earned above that amount, if you qualify for the exclusion, is added to your other income and taxes are imposed. If you paid taxes to a foreign government, you can take credit for them on your US income, Ithink.

In addition, some countries have tax treaties with the US and all sorts of things are different for those covered.


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## synthia (Apr 18, 2007)

Ah, Fatbrit. You write faster than I do.


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## tcscivic12 (Jul 2, 2008)

I can tell you that here in South Carolina in order to get a gun all you have to do is go throught a simple 10 minute background check and then you are on your way with the gun and you can keep it concealed in your vehicle loaded without a permit and you can also privately sale a handgun to anyone without having record of it also.


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## Fatbrit (May 8, 2008)

Tiffani said:


> and automatic transmission.


Why o why can't Americans do stick! AT makes no sense in a small car.


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## Bevdeforges (Nov 16, 2007)

I see you got answers to most of your questions already. I'll just add a couple "clarifying" comments...

As Synthia notes, any state you hear about where there is "no income tax" refers only to state income tax. Everyone is still subject to Federal income tax.

The gun situation also varies by state. The Supreme Court just ruled that everyone has a right to own a gun in their home, but that doesn't mean you can carry it around with you. Concealed carry permits are the province of state and/or local regulations, which vary considerably.

Cars (especially used cars) are incredibly cheap by European standards at least - however the periodic inspection standards vary by state and a car barely has to be running in order to pass most state inspections. It's entirely possible to buy a "recently inspected" vehicle only to find that it's not in operating condition.

When you own a plot of land, you do seem to have more "rights and privileges" over it than in many countries here in Europe. Property is considered something of a sacred right here, and while zoning restrictions may interfere with what you want to do with it, you do have the right to fence it off and to take reasonably strong measures to keep people off your property.

And as for US taxation, Americans are taxed on their worldwide income no matter where in the world they are resident. The exclusion of "foreign income" applies only to "earned income" (i.e. salary) plus a small additional allowance for housing costs (again, only to the extent of your "earned income"). Technically, you are also liable for US income taxes as long as you hold a green card, even if you reside outside the US (though you're actually supposed to surrender your green card if you take up residence elsewhere, so they aren't too fanatical about enforcing this).
Cheers,
Bev


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## McIntosh (Jun 20, 2008)

OK, that cleared up a lot. Thanks.

About the property thing:
In places like Scandinavia, even if you have own a plot of land, you can't do much with it, other than build a house according to the regulations/laws.
We wanted to put up a little windmill here (about 5 feet tall) to generate electricity. That's illegal here. You can't cover yoru roof with more than X-amount of % with solar panels. (We even have carbon taxes on windmills, for crying out loud!).
Your fence/bush around the property can't be higher than XX, you can't just builæd an addition to your house. If you want to build a tool shed, you ahve to get a permit and follow another billion set of rules. Your house has to be a certain colour. The list goes on and on.

The worst might be that at any time the city or state can decide that they want your property. They will pay you for it, but THEY decide how much you'll get for it. Not a damn thing you can do about it.
This happened to some friends of mine not too long ago. They got less for it than they could have sold it for privately.
And, of course, you pay huge sums in property taxes, which I've always thoguht to be absolutely insane. I know that tax goes to roads etc in the US. But here we already pay 55-65% income tax plus 25% sales tax on everything.

Just always thought that it is very unfair that you pay for a piece of land,a nd you basically can't do much with it - AND you get to pay tax on that, too, every month.


About the US tax:

I'm still not entirely clear on this.
Say I'm an American and I move to Germany. Here I get a job and am payed by the German company that I work for.
Does this mean that I pay tax from this income to the US IRS?
Is this a good thing or not?
US taxes are lower than German ones. But if you ALSO have to pay german taxes, then you migth as well not go live there.
So, this whole thing is either a very good deal - or a very bad deal...


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## MichelleAlison (Aug 25, 2007)

McIntosh said:


> OK, that cleared up a lot. Thanks.
> 
> About the property thing:
> In places like Scandinavia, even if you have own a plot of land, you can't do much with it, other than build a house according to the regulations/laws.
> ...


The UK has strict building laws also and if you build too high, too big etc. they can come along and knock it down..............................


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## twostep (Apr 3, 2008)

Depending on where you own land in the US - strict covenants can regulate use of the land and buildings. Building code alone can be an expensive nightmare.

There is no actual double taxation between Germany and US but an income reporting system is in place. US residents have to file annual tax returns no matter where they reside and what their income is. 

Contrary to common believe sale and ownership of firearms is tightly monitored. Consumers generally do not know a lot about reporting and back ground checks. Amongst others sale/ownership of certain firarms is prohibited to legal residents which are non-citizens. Some states require a permit with formal training to own a gun others are more lenient. Consider the difference longarm versus handgun - again different rules apply.
Some states consider a car part of a residence thus guns in the glove compartment are not considered "concealed". Check the small print - gun and amunition have to be seperate.

Yes - AK issues royalties to its legal residents after one year of permanent physical residency.


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## Fatbrit (May 8, 2008)

Bevdeforges said:


> The gun situation also varies by state. The Supreme Court just ruled that everyone has a right to own a gun in their home, but that doesn't mean you can carry it around with you. Concealed carry permits are the province of state and/or local regulations, which vary considerably.


Another thing to add on the gun thing on an expat forum is that the rules may also depend on your immigration status. State regulations can and do limit stuff to permanent residents and citizens.


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## Bevdeforges (Nov 16, 2007)

McIntosh said:


> About the US tax:
> 
> I'm still not entirely clear on this.
> Say I'm an American and I move to Germany. Here I get a job and am payed by the German company that I work for.
> ...


Basically, it's a bad deal. 

Per your example - as an American working in Germany, you have to file a tax return to declare your worldwide income no matter where you live. You also have to pay German income taxes, because you are "tax resident" in Germany. 

On your US taxes you do get an "exclusion" on the first $80,000 or $90,000 of earned income (i.e. salary). That means you don't pay income tax on that amount - but they are fiddling around the with laws so that if you have income from other sources ("unearned income" - which includes any investment income, rents or benefits like unemployment) you pay a higher rate of tax on those items - though there are some provisions for taking a credit for taxes you pay on that same income to Germany.

If it sounds complicated, it is. And it is becoming harder and harder to give up your US nationality. If you do, and they suspect it is "for tax reasons" there are a number of penalties - including subjecting you to US taxes for an additional 10 years, and if you have lots of property, they can force you to declare a "paper sale" of all your property so that you have to pay the capital gains before they'll let you off the hook for US taxes.
Cheers,
Bev


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## twostep (Apr 3, 2008)

Bev do you want to go into estate law for GC holder surviving spouses:>)


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## Bevdeforges (Nov 16, 2007)

twostep said:


> Bev do you want to go into estate law for GC holder surviving spouses:>)


No thanks - I'm having more than enough "fun" figuring out the French inheritance laws and how to protect myself when and if I become a surviving spouse over here! 
Cheers,
Bev


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## twostep (Apr 3, 2008)

The nut shell version - resident alien surviving spouse does not qualify for marital deduction of probated property. Give or take up to 40% tax are due:>(


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## Fatbrit (May 8, 2008)

twostep said:


> The nut shell version - resident alien surviving spouse does not qualify for marital deduction of probated property. Give or take up to 40% tax are due:>(


Probably up there near the top of the list of reasons to naturalize for Westerners.


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## Bevdeforges (Nov 16, 2007)

twostep said:


> The nut shell version - resident alien surviving spouse does not qualify for marital deduction of probated property. Give or take up to 40% tax are due:>(


I have a cousin married to a GC holder - though the GC holder is about 10 years older than his wife, so hopefully they won't have the problem. If she survives him, there's no problem for her to inherit with the full marital deduction.
Cheers,
Bev


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## Bevdeforges (Nov 16, 2007)

Fatbrit said:


> Probably up there near the top of the list of reasons to naturalize for Westerners.


Depending, of course, on what your home country's policies are on taking another nationality. My cousin's husband doesn't want to give up his home nationality - but can't take US citizenship without losing his original.
Cheers,
Bev


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## Fatbrit (May 8, 2008)

Bevdeforges said:


> Depending, of course, on what your home country's policies are on taking another nationality. My cousin's husband doesn't want to give up his home nationality - but can't take US citizenship without losing his original.
> Cheers,
> Bev


Yep -- for some nationalities it isn't possible or is difficult.


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## synthia (Apr 18, 2007)

You have to have building permits and get inspections and conform to building codes in the US. Your electric and plumbing work must be inspected, and there are rules about how many outlets you must have per wall and how high a fence can be, all that stuff. When I was thirteen my family moved because the house we were living in was taken by eminent domain for a highway. The owners got less than fair market value, too.

What we don't generally have is a lot of easements. In England people are allowed to hike almost everywhere, and I think they can camp on private property, too. In the US, going onto someone's property uninvited can be considered trespass and you can be prosecuted for it.

If you are an American, you must file and declare all your income from any source, no matter where or how it is earned. Al Capone was finally jailed, not for any of his gangster activites, but for income tax evasion.

Say you are an American working in Germany, earning $100,000 per year in salary, $10,000 per year in interest and dividends, and $20,000 a year in rental income from a condo you own in Tahiti after expenses like the mortgage and maintenance. Your total income is $130,000. You are entitled to an exemption on the first $80,000 you earn in Germany, leaving you with an income of $50,000. Your taxes will then be figured as if you had a salary of $20,000 plus the other inocme. Then you may be able to take a credit for your German taxes paid on that $20,000, because you are then being taxed twice.

However, there are tax treaties, and if you are transferred and paid by an American taxes, you won't pay any German taxes, but will pay full US taxes just as if you were working in the US. Since US taxes are lower, this is a good deal.


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## Bevdeforges (Nov 16, 2007)

synthia said:


> Your taxes will then be figured as if you had a salary of $20,000 plus the other inocme. Then you may be able to take a credit for your German taxes paid on that $20,000, because you are then being taxed twice.
> 
> However, there are tax treaties, and if you are transferred and paid by an American taxes, you won't pay any German taxes, but will pay full US taxes just as if you were working in the US. Since US taxes are lower, this is a good deal.


I should point out that the way the overseas earned income exclusion works has changed recently. In the example you cite, you would have to figure your taxes on your income with the entire earned income and then subtract the taxes on just the earned income portion. What this does is push the taxes you pay on what's left over into the higher tax brackets.

The other thing to watch out for is that it's not automatic that you won't pay German taxes if you're employed by an American company. To fall under that particular wrinkle of the tax code you have to be on a genuine transfer, with the intention of returning within a certain period of time and maintaining your US social security status while you are gone. If you work for a US company in Germany and "just happen" to be a US citizen, you pay regular German taxes and pay into the German social insurances (which is actually, in some ways a better deal).
Cheers,
Bev


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## twostep (Apr 3, 2008)

Bev - that is the infamouse Catch 22 - it does not apply for her.


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## MichelleAlison (Aug 25, 2007)

synthia said:


> You have to have building permits and get inspections and conform to building codes in the US. Your electric and plumbing work must be inspected, and there are rules about how many outlets you must have per wall and how high a fence can be, all that stuff. When I was thirteen my family moved because the house we were living in was taken by eminent domain for a highway. The owners got less than fair market value, too.
> 
> What we don't generally have is a lot of easements. In England people are allowed to hike almost everywhere, and I think they can camp on private property, too. In the US, going onto someone's property uninvited can be considered trespass and you can be prosecuted for it.


Hi Synthia,

I think you will find that all the above laws apply in the UK also - trespass is trespass. 

Michelle


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## synthia (Apr 18, 2007)

Bev - I thought I said that the option of paying US taxes was only available to those who had transferred to Germany.

When did they change the earned income stuff? That was a really nice break, having the taxes start on my interest and dividend income as if that was my sole income, thus letting me have that money tax free since it was less than the standard deduction and personal exemption.


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## synthia (Apr 18, 2007)

Michelle -

I keep reading about all the rights for hiking trails. We really don't have that here. And I guess I got the idea about camping in fields from Brits who were planning on doing that in the US, because they assumed it would be OK.


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## Fatbrit (May 8, 2008)

synthia said:


> Michelle -
> 
> I keep reading about all the rights for hiking trails. We really don't have that here. And I guess I got the idea about camping in fields from Brits who were planning on doing that in the US, because they assumed it would be OK.


Maybe have a read here. There is no equivalent in the US.


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## Bevdeforges (Nov 16, 2007)

synthia said:


> Bev - I thought I said that the option of paying US taxes was only available to those who had transferred to Germany.
> 
> When did they change the earned income stuff? That was a really nice break, having the taxes start on my interest and dividend income as if that was my sole income, thus letting me have that money tax free since it was less than the standard deduction and personal exemption.


Even for those who transfer to Germany with a US company, it's not an automatic option.

The earned income thing changed for the 2006 tax year. (Caught me completely by surprise, too.) I'd love to see how much tax revenue they actually get from overseas taxpayers, since they seem to be on a campaign of squeezing them for as much as they can lately. Every few years someone raising the bright idea of doing away with the overseas earned income exclusion altogether.
Cheers,
Bev


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## synthia (Apr 18, 2007)

I remember thinking it was great not to even have to pay social security. Now I wish I had been required to, because I could use the credits.


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## Bevdeforges (Nov 16, 2007)

In some countries these days you can "buy back" credits for years you didn't contribute to the national pension scheme. Usually this is for years you attended school or were off on maternity or other sorts of leaves that don't count toward pension credits. I suppose time spent overseas would be up for buying back, too, though I'm not sure.
Cheers,
Bev


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## synthia (Apr 18, 2007)

I've never heard of the US doing that. I don't know that I'm in a position to buy them back right now. At the time I would have barely noticed the money, which I assume would have been at the self-employed rate that is nearly 15%.


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## exexpat (Jul 7, 2008)

The Alaska State Lottery: 
To qualify you must be a resident of the State for one year covering October to October ( If you arived in November 08 you will have to wait till October of 2010 to qualify). You also need legal residency in the US (Green Card).
The last year I was up there(2004) the payment was $1100 per individual and Synthia was right, the amount is reducing each year.

Homesteading and mining claims:
Still valid, but you have to work the claim to maintain it or occupie the land to keep it. Even in a State as big as Alaska you'll find it near impossible to get land that way without owning a plane to get you there. All the good bits were grabbed a long time ago.


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