Shyster1040 wrote:

- quote -

Yes, yours was very detailed answer and AFAIAC it certainly
cleared a lot of confusion.

Thanks, Tony

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

most people pay little or no taxes, compared with the upper
10 or 20 percent of the taxpayers (taxpayers, not
population), and the majority seems quite content with
spending the minority's money. Likewise with politicians.

- quote -

U.S. means "United States". A U.S. citizen who paid
Medicare taxes in one of the states will still get benefits
from that fact, even if living in another US state. But,
just like an EU citizen who leaves the EU, a US citizen who
leaves the US will not get medicare benefits.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Just Cocky" <just[at]cocky.com> wrote:

- quote -

UNTIL the law changes.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

L K Williams wrote:

- quote -

Thanks, I am finally getting answers that I hoped for. Now
that somebody well informed tells me to forget about the
Medicare, we can talk theory and personal opinions.

Right, SSA can not know what will happen when you reach
retirement age but SSA *does not penalize you today* for
living in a different country when it comes to receiving
Social Security checks.

At least not in the sense that you can forget about it
altogether, right? I mean, you wrote that you youself
receive SS checks.

So I'm actually fine with being taxed now. The title of this
post turned out to be unintentionally too provocative.

But I still claim that there is the obvious and significant
difference between Medicare and Social Security tax - both
make you eligible for something, but one eventually pays, no
matter where you happen to be located, another doesn't.

And IMO, the reason for this difference is also obvious:
when you are retired and you receive your SS check you get
it from the government and government gets that money from
people paying SS taxes at that time.

With Medicare things are different because, in the end,
somebody has to be payed for some services. There are
doctors and hospitals involved. Arranging for it across the
borders of different countries is much more difficult and
nobody really wants to mess with it. Once abroad you are a
minority and you can praise Lord if you happen to be getting
SS checks at all, let alone reimbursements for medical
expenses in another country.

Tony

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Barry Margolin wrote:
- quote -

That is probably a cultural issue more than anything else.

It may be a bit exaggerated to expect not to pay taxes now,
on account that you promise today that you will never use
what those taxes would make you eligible for in the future.
Like many other posters wrote: what if you change plans ?

However, I have a difficulty imagining a court or even
public a opinion poll that would vote in favor of paying
Medicare benefits to U.S. citizen who (somehow) managed to
never ever contribute a $ to Medicare tax, in all his
working life in the U.S.

Alternativelly, take example of EU - as an EU citizen who
paid Medicare taxes in one country, you can still get some
benefits from that fact, even if living in another EU
country.

The point is that it all depends on the agreement between
the member states.

All in all, IMO, correct answer would be that U.S. simply
has no agreements of any sort with any country regarding
Medicare-related expenses.

Social Security, OTOH, is easy because it does not require
any particular organization - it is just government mailing
you checks from SS taxes paid by those who work today. The
only intermediary work that needs to be done is counting the
taxes received and mailing the check, after sufficient
precautions were (supposedly) taken to make sure it is not a
fraud.

With Medicare you, as a minimum, have a doctor and a
hospital who want money and they don't care if they get it
from you or from some intermediary institution, as long as
they will get it. Since this intermediary institution
doesn't exist, you get nothing.

Tony

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Tony wrote:

- quote -

Well, it's not like the Medicare tax would be any different
from any number of other taxes that you pay. Income tax
doesn't qualify you for anything in particular.

Now if you retire you won't have to pay an Medicare tax.
You would still be required to pay income taxes. But a lot
of what you pay the income taxes for wouldn't really help
you in another country. The FBI is not there to
investigate, disaster relief and small business loans aren't
available outside the country. You aren't protected by FDA
or securities regulators, etc. You would be paying income
taxes and not gaining any direct benefit other than consular
representation and some general protection based on US
military power.

That hardly seems any different.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Tony" <tonkoj[at]gmail.com> wrote:

- quote -

Unless the Law changes. If the Law changes, you may very
well end up not getting anything.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Tony" <tonkoj[at]gmail.com> wrote:

- quote -

You won't in that case. You already seem to know that, you
said so in your very first post.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

As I understand it, your basic question is not, why do you
have to pay the taxes, but rather, given that you've paid
the taxes, why is the availability of benefits limited to
(otherwise eligible) persons physically present in the U.S.,
correct?

First, this probably isn't the right forum to ask that
question - the main focus here is on the liability for the
taxes, generally irrespective of the use the revenue is
ultimately put to; the "tax" answer, as you've seen, is
that, since the taxes are validly levied, you've gotta pay
them, and the fact that in your case you believe you
ultimately won't receive the benefits for which those taxes
are levied is largely irrelevant - the benefits derived by
the expenditure of tax revenue do not (need not, and in some
cases either cannot or should not) go dollar-for-dollar to
those individuals who paid the taxes.

For example, part of the general tax revenue goes to pay for
FDA regulation of so-called "orphan drugs" - drugs used to
treat rare diseases such as Wilson's Disease (a rare
autossomal recessive inherited disease primarly caused by an
acumulation of copper in tissues all over the body, mainly
in the liver, brain, kidneys and cornea). Unless you suffer
from Wilson's Disease, you obtain no benefit from that part
of your taxes that go to pay for the FDA's regulation of
drugs for that disease.

Nonetheless, the "tax" question was not your primary
question, but rather the broader one of why, unlike social
security, your benefits do not travel with you.

The short answer is, in 1965, when Congress enacted
Medicare, it excluded coverage for services provided
overseas (with limited exceptions), see 42 USC sec.
1395y(a)(4), and did so with little or no explanation;
neither the committee reports during consideration nor the
final reports on passage do more than restate the exclusion.

At least one commentator has suggested that Congress was
concerned with the following policy issues: (1) difficulty
in administering and monitoring such services, (2) inability
to control fraudulent claims by foreign providers or
beneficiaries receiving such services, (3) limitation of the
economic benefits of the subsidization of medical care to
those providers who would contribute back to the U.S.
economy, and (4) the sheer expense of providing world-wide
coverage. Of these, the last is arguably the most
significant - while we "pay" for Medicare through the
associated taxes, the benefit provided is not linked to
amounts contributed, and may vastly exceed the total amount
of taxes paid by a particular recipient. This is in contrast
to social security, under which the ultimate benefit
received bears a very determinate relationship to amount of
taxes paid, a relationship that effectively caps the "cost"
of the program with respect to each and every beneficiary.

My source for this is the following article: James R.
Whitman, "Venturing Beyond the Great Wall of Medicare: A
Proposal to Provide Medicare Coverage Outside the United
States," 8 Elder Law Journal 181 (1993)[available from the
Journal's website and also
at:http://home.law.uiuc.edu/elderlaw/is.../williams.pdf].

As Whitman discusses, an even better analogy than social
security is the program called TRICARE, which is the
military analog to Medicare. TRICARE, which is funded out of
general revenues rather than a specific tax, also provides
coverage to retired military personnel and their
spouses/dependents, including those who choose to
permanently retire overseas.

Whitman discusses the fact that most (if not all) of the
policy concerns that, as he speculates, may have motivated
Congress to restrict Medicare benefits in 1965, except the
additional cost, have been successfully addressed by the
TRICARE program. In particular, as Whitman describes it,
the TRICARE program has developed a fairly large network of
providers and claims administrators that operates largely
within the dictates of the requirements of Medicare, and
that at this late date there is no justifiable reason for
not permitting Medicare recipients to take advantage of this
network (at least in certain circumstances - Whitman limits
his proposals to vacationing Medicare beneficiaries) by
extending Medicare coverage to services provided within the
existing TRICARE network.

Whitman's article is an interesting (and relatively short)
read. If you really want to pursue the question, I would
suggest starting there.

Thus, it would appear that the "non-tax" answer to your
question is, no-one's really sure, but there are various
concerns that might have motivated Congress in 1965,
including concerns over administration, monitoring, fraud,
and last (but certainly not least) cost. However, most of
those putative concerns have been successfully addressed by
the military via its TRICARE program and, other than the
additional cost (get ready for more Medicare taxes), there
are few if any remaining concerns that justify the
continuing exclusion of medical services provided overseas.

Does that help at all?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Bob Sandler wrote:

- quote -

The problem that I'm having with the responses here (but I
appreciate anybody giving it a shot) is that I am not
questioning what you wrote.

Quite simply, I know that too.

I am not asking the question about something that I know,
but about something that I don't know:

If I will eventually receive any Medicare benefits how does
that work, if at all, if I am physically located in another
country?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Gil Faver wrote:

- quote -

But that wouldn't happen without any trail of when was that
decided, would it?

If that was the case, I rather doubt it was decided behind
the closed doors, with no public knowledge of any kind.

Who is then enforcing that decision and how?

Ah.. I see Goverment is projecting secret brain waves
which force people to mumble nonsense whenever asked such a
question.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Tony" <tonkoj[at]gmail.com> wrote:

- quote -

It qualifies you for medical benefits. If you decide to
move away, you have chosen to forego those benefits.

What you're basically looking for is a way to say now "If I
promise I guarantee I won't try to take advantage of
Medicare benefits when I retire, can I stop paying the tax
now?" Sorry, but US taxes don't work that way. They've
probably already budgeted in a certain number of people who
won't get benefits, either because they've left the country,
died, don't get very sick, etc. So the fact that you're not
going to draw benefits is already accounted for
statistically.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

Most taxes don't qualify you for anything. It's Social
Security that is different. We pay income tax, real estate
tax, sales tax, personal property tax, gift tax, gasoline
tax, and on and on, and none of them qualify us for
anything. Why should Medicare tax be any different from any
other tax? You are trying to generalize from the one case
that is an exception. Social Security is the only tax that
works that way.

Bob Sandler

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Tony" <tonkoj[at]gmail.com> wrote:
- quote -

Tony, I don't think you have your facts straight here.

If you are a U.S. citizen or permanent resident, you are
subject to U.S. income tax on your world wide income. This
is true whether you live in the U.S. or some foreign
country. However, if you meet certain rules, you may be
able to exclude up to $80,000 of EARNED income (i.e.
salaries and wages and income from self employment) from
taxable income. If you live in a country with an income
tax, you would be subject to that country's tax regardless
of the U.S. tax. You avoid double taxation by using the
exclusion or taking a credit against the U.S. tax for any
foreign income tax paid on income which is not excluded.

Not only do I work with expats, I am myself an expat. I am
also old enough that I receive my Social Security benefits.
But, since I am living abroad, I get nothing from Medicare.
Here in Thailand, doctors and hospitals are not expensive
and health care is excellent; it would not be economical for
me to return to the U.S. to get Medicare benefits. In the
U.S., the co-pay under Medicare could easily be more than
the total cost here.

As to paying the Medicare tax now, think of it this way: If
you were able to avoid the tax now, on the grounds you
planned to retire abroad, what would happen if, for any
reason, you did NOT leave the country? In other words, how
can the SSA know what will happen when you do reach
retirement age?

Consider both the SS and Medicare taxes as a cost of working
in the U.S. or for a U.S. employer. Like many other taxes,
it becomes a cost of doing business, whether it makes a
direct contribution to the welfare of the business.

In my case, I had the choice of reporting my salary here in
Thailand or not. I checked with SSA before moving and had
them estimate my benefits both ways, with and without paying
the tax on that salary. As it happened, that salary would
replace another year and become one of my 35 highest earning
years. Thus, it would increase my monthly benefit. But,
when I divided the tax I would have had to pay by the
increase in benefits, I discovered that it would take 15
years just to recover the cost! Not a good investment.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Tony" <tonkoj[at]gmail.com> wrote:
- quote -

perhaps the gov't thinks that there is a sufficient level of
Medicare fraud right here in the U.S. so there is no need to
venture abroad for potentially greater levels of fraud.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

Unlike Social Security, any Medicare benefits you might
eventually receive are NOT based on how much Medicare tax
you paid. The Medicare tax you pay today has nothing to do
with your eventual benefits. It is just a tax to pay for the
benefits of people who are covered by Medicare now. You pay
the tax so that OTHER people can get Medicare coverage, not
so that YOU can get it. If you do eventually receive any
Medicare benefits, they will be paid for by the taxes
collected from people who are working then.

Bob Sandler

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Tony" <tonkoj[at]gmail.com> wrote:

<snip> Am I supposed to board a plane and go buy a medicine in the
- quote -

I hate to keep stirring this pot, but...you might want to
investigate the details of that retirement abroad first.

Presuming that you do not renounce your US citizenship - not
advisable IMHO anyway - you will be residing in a foreign
country on some sort of visa. Depending on the residency
rules of that country, you may need to leave that country
periodically to renew your visa. So you may be boarding a
plane periodically anyway.

YMMV, but I think it's worth the research.

Hank Murphy
speaking only for myself

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Barry Margolin wrote:

- quote -

Actually, I only confirmed for the umptienth time that many
people have the difficulty understanding the question, and
thus they don't really know the answer, but they still like
to use it for a dubious pleasure of making a
politically-charged statement in public.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:

- quote -

True.

I think, as is reasonable and to be expected, that most
people are not well informed about anything that involves
other countries.

You can avoid paying Income tax, Soc.Sec tax and Medicare
tax, whether you are a foreign citized working in the U.S.
or U.S. citizen working abroad.

The reason is to avoid double taxation. U.S. citizen may
elect to pay all these taxes either to U.S. goverment or to
foreign govermnent. This is not the case with all the
countries in the world but applies to most countries with
which U.S. has long diplomatic relations, and in particular
to West European countries.

Then we have the case of U.S. citizend who have accumulated
enough Soc Sec credits to be eligible for SS checks when
they retire and who decided to retire to another country.

If they are eligible for any Soc Sec chjecks they are
eligible to receive it at almost any location that U.S.
Postal Service or UPS can reach.

So let me reformulate the question in two:

1) What are you eligible for when you retire, if you have
been paying Medicare tax?
2) How do you use that eligibility if you are not living
in the U.S. when you retire?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Rich Carreiro wrote:

- quote -

But SS tax, after enough credits qualifies me for receiving
SS checks when I retire. I understand that money that I will
eventually receive will be coming from younger people paying
their SS taxes, not from my SS taxes as some form of
investment.

However, that doesn't change the fact that I will be getting
*something*.

There is an important difference here between SS tax
qualifying you for *something* upon retirement, and no
matter where I decide to live, and Medicare tax qualifying
me for *nothing*.

Now, why would Medicare tax be different just because I
moved to a diffierent country?

I am hoping that some expatriot will read this and comment.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >