Friday, May 23, 2014

Uncle Sam Versus the Tax Bear

I just put the finishing touches on my US tax return today and stuck it in the mail to Austin, Texas. Yes, that's my US tax return. Of course, as everyone in the States knows, the deadline for filing federal income taxes is April 15th, a date marked with hectic last-minute form-filling and inevitable anti-tax protests – also a date that we passed a few weeks ago. Luckily, us Americans living overseas get an automatic two-month extension, which I almost always take advantage of, since, well, why not?

Now, some folks might wonder why someone who has not lived or worked in the US for over thirty years would be subject to American income tax. Good question. This is why the United States often gets mistaken for Eritrea, the only other nation that requires its citizens to pay tax, no matter where they call home. It’s another example of American exceptionalism.

In reality, for Americans here in Finland, the possibility of having to pay tax to Uncle Sam AND to the Finnish verokarhu (“tax bear”) isn't necessarily that high, thanks to a tax treaty between the two countries. In practice, American expats here have to pay US tax only on income over a certain threshold, which is high enough (for 2013 it was $97,600) that I can essentially scratch US taxes from my list of things to worry about.

But, I still have to file a return. In my case, this has always been relatively simple. I am, after all, a simple man with a simple financial existence. In addition to the normal 1040, the only other tax form I need fill out is one (2555-EZ) to show that I qualify to have my income excluded from US taxes, in other words, that I really do live outside the US full-time and didn’t make over $97,600 last year (damn it!).

It’s always been an easy, though pointless, process. This year, it’s all becoming a bit more onerous. The reason is a new form called FBAR, the result of a new law called FATCA. They couldn’t have picked a more appropriate acronym than “FBAR”, which stands for “Foreign Bank Account Report”, but instantly brings to mind (my mind at least) the old Army slang, “FUBAR”, which – as I remember from my days of watching “Saving Private Ryan” – has a meaning that is completely different, but uncannily apt in this case. Look it up. 

The basic idea behind FBAR is that, not only do Americans have to report their overseas income; we also must report all the money we have parked in overseas accounts. As a liberal, happy to pay taxes myself and happier for rich people pay even more, I applaud the motivation here, which is to ferret out secret offshore stashes of untaxed cash.

However, there are other consequences, unintended to be sure, that have driven many American expats to renounce their US citizenship. And I’m not talking about cases of tax avoidance like Facebook’s co-founder Eduardo Saverin, who ditched his US passport and jumped ship, so to speak, allegedly to avoid paying capital-gains taxes on his huge wealth. (Or for that matter, former Frenchman Gerard Depardieu, who did the same when he fled, figuratively, to the tax haven of Russia. I guess that may be slightly off-topic.)

It’s one thing for middle-class Americans who happen to reside in another country, living ordinary lives, working at ordinary jobs, drawing ordinary salaries, to have to fill out one additional form in order to provide details about their local bank accounts to the Treasury Department. It wasn’t a big deal for me, though others surely have more financially complex lives that make the task actually burdensome.

But, declaring your accounts at the local banco, banque, or pankki is only part of it. The banks holding your accounts are also required to comply with the new law. Imagine the joy of a small-town bank in Poland when it is confronted with the need to file paperwork with Washington just because an American living down the street chose to open an account there.

You wouldn’t necessarily think this was a problem, but I have seen reports of some banks, faced with this unwelcomed hassle, turning away American customers or closing their accounts, no doubt causing all kinds of everyday aggravation. This is not a case of some Master of the Universe being unable to open a hidden account in the Cayman Islands (I’m all for that!), but rather some average wage-earner being unable to use the ATM at his local grocery store. The good news is that I’ve seen no indications of this happening in Finland. Not yet, anyway.

As I see it, a clear problem with what might otherwise be a reasonable law is the threshold for reporting. Americans must declare any bank account that has held $10,000 or more at any time during the year. That’s currently a little over 7,000 euros.

When I was living in Georgia in my 20s, working as a lab tech or studying, I couldn't imagine having that much money in my checking account. In the context of living in Finland, however, you don’t have to be Donald Trump to have a saldo of 7,000 euros, at least for some brief transitory period.

It’s as if, in order to catch tuna, you designed a net that also catches all the shrimp. It’s unfortunate that such a well-intentioned law might be forcing some average Americans rooted on foreign soil to choose between giving up ordinary bank services or giving up their US passport. Whether coincidentally or not, last year after the law took full effect nearly 3000 Americans chose the latter, a record increase of 221%.

That’s a drastic rise in Americans taking an equally drastic step. It’s a step I could never contemplate taking myself – at least, not as long as I’m able to deposit money somewhere safer than my own mattress.

Sunday, May 4, 2014


Over the last couple of months, I’ve been taking regular walks near my home, a part of Helsinki that luckily includes lots of woods and some farmland. These 8-kilometer or so mini-hikes were meant to fill the gap between the cross-country skiing season (that is, if there actually had been a cross-country season this winter worthy of the name) and the time when trails were free enough of snow and ice for bicycling season to commence.

Anyway, on one of those walks a couple of weeks ago I was strolling along a broad trail bordering a large field of last year’s rye stubble that had not yet been tilled. A young man approaching on a bicycle stopped a few meters ahead of me, reached into the pack on his back and pulled out a kind of staff, on which was mounted a pair of large binoculars. He then started quickly scanning the expanse of the sepia-colored field to the north.

This is typical around here, especially this time of year, and in autumn.

Often along the road leading to the nearby Haltiala farm (one of the only two working farms within the city-limits of Helsinki) you will see men standing behind tripods supporting telescopes or large binoculars trained on the empty pastures and fields before them. Along the forest trails you will meet men (again, it’s usually men, for some reason), with powerful optics hanging around their necks.

The Painted Bunting, one of the more colorful residents of Georgia
Photo by Pancomo

Bird-watching is a fairly big thing in Finland. At least, it’s much more popular than in the States, where I’m sure the hobby still enjoys a reputation as a pastime only for nerdy or earth-child types. That’s unfair, I’m sure, since actual bird-watchers (as opposed to caricatured ones) are a diverse bunch. I’ve understood that even someone like Hank Paulson, former CEO of Goldman Sachs and Treasury Secretary to George Bush, is an avid birder.

Still, by comparison, birding in Finland is much more mainstream, not surprising when you consider how passionate nature-lovers Finns are. Along wetlands and other prime habitats, towers have been erected specifically for bird-watching, and I know Finns who are quite seriously into photographing some of this country’s winged wildlife.

Recently a TV reporter ventured out to Utö, a tiny island outpost in the Baltic some 60 kilometers from the mainland, to chat with a trio of hardy birders (it still looked cold out there) who where monitoring the northward migration over the Gulf of Finland. Today's Helsingin Sanomat featured a story on this weekend's competition, held every spring, between bird-watchers manning over 300 towers around the country. The good-natured rivalry was won by a tower-team in the western city of Pori, which spotted a total of 104 species in eight hours. 

At this time of the year, on Yle's  morning news show they report which birds (and bees, and in fact, all kinds of other creatures like snakes) can be expected to appear that week in different parts of the country. I’m pretty sure I never saw something similar on Good Morning America.

All this has started me thinking I should take up birding again. I used to do it more or less seriously when I was young, and I still have my first bird book, “Birds of North America” a Golden Field Guide, inscribed with the date I purchased it, Sept. 2, 1974. I recall buying it in a gift shop on Mt. Mitchell, the highest peak in the US east of the Mississippi, on a family trip just before my 18th birthday.

My wife also still has the Finnish bird book she used as schoolchild, and we recently noticed that she and I had put a similar “x” by each bird we identified. And that, of course, is a big part of the hobby – not only “watching” the familiar birds you see everywhere in the neighborhood, but also looking out for less-common species you can add to a growing list of birds you have seen. I stopped doing that in 1987. In this way, I am a lapsed birder.

It’s not that I don’t pay attention to the birds around me. I’m familiar with the grebes and swans and terns (uikut, joutsenet, tiirat) I see when I go kayaking off the coast of Helsinki. I often watch the tits (tiaiset) in the fruit trees outside our window or the pheasants (fasaanit) who occasionally stalk through our yard.

But for quite a long time, I’ve not always bothered to study the other little descendants of dinosaurs that I run across, at least not enough to know if they’re a new species that should be on my list.

Some of our bird books.

I recently managed to dig up the old notebook I used to record my most significant sightings. By the time I stopped birding regularly, I had listed over 185 species. I have no idea if this is a lot, or merely typical for the slacker-kind of birder that I apparently am.

My list includes, of course, those ubiquitous birds, like Robins, Common Crows, Red-tail Hawks, or Blue Jays, that anyone growing up in Georgia would have recognized without ever cracking open a field guide. That kind of common natural-history knowledge was handed down by parents, at least by my parents.

The first bird I identified on my own was probably a Yellow-shafted Flicker. Or maybe it was the Dark-eyed Junco, a little sparrow that in North Georgia we called “Snow Bird” because they appeared only in winter. (On some mountain trails in North Carolina, these little birds used to startle us summer hikers when they burst out from their hiding places right at our feet.)

I continued adding to my list after I moved to Athens, where I spent six years studying and working at the University of Georgia. Especially after my college roommates had graduated and moved away, I would go off on solitary bird-watching walks, often along the (then) undeveloped banks of the Oconee River, where I would also see painted turtles sunning themselves on half-submerged logs, or at Sandy Creek Nature Center, where I sometimes volunteered as a guide to groups of school children. That’s where I saw my first Green Heron and Yellow-rumped Warbler (a great name!).

A great thing about bird-watching is that whenever you travel to a different part of the world, you can easily add to your list birds that, while they are completely ordinary in their home surroundings, are quite exotic to you.

Some of my most memorable bird-watching was in the Okefenokee Swamp, near Folkston, Georgia. One of my college roommates had moved there to teach, and on visits to see him, I would make forays into the swamp, either by canoe or on foot along the trails and boardwalks of Chesser Island (which also had a bird tower). Even though I barely penetrated the interior of the swamp, America’s greatest pristine wetlands, I entered an environment completely different from North Georgia – and virgin bird-watching terrain to me, with such new species as Red-cockaded Woodpeckers and White Ibises. A great place to spot alligators, as well.

Other fruitful locales for adding new birds to my list in the past have been Sapelo Island on the Georgia coast (Anhingas, Ospreys, Painted Buntings), the Everglades National Park (Bald Eagles, Roseate Spoonbills, American Coots), many places out West (Roadrunners, Clark’s Nutcrackers, Dippers), and northern India (Purple Sunbirds, Blue-tailed Bee-eaters, Blossom-headed Parakeets – more great names, by the way!).

And, of course, in Finland are many birds that I hadn’t seen until I washed up on these rocky shores. White Wagtails, Mute Swans, and Hooded Crows are common here, but were all new to me, along with Common Eiders, Ruddy Turnstones, and the ever-popular Great Tit. (In America, we avoid making this last one sound like a George Carlin routine by adding “–mouse” to the name, as in the Tufted Titmouse, which is also on my list).

While Finland doesn’t have nearly the diversity of birds that the US does (and there are some species it shares with North America, such as the Common Raven – one of my favorite birds), there are still lots of lintuja here I haven’t yet added to my list. 

Maybe it’s time I dust off my binoculars and join all those guys silently scanning the fields of Haltiala.


The Raven, an ominous presence from the 
slickrock of Utah to the boreal forests of Finland.