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Scott Schamber
July 5, 2020

Your Economic Impact Payment Has Arrived...In Switzerland!

The letter I received started with “My Fellow American” and ended with President Donald J. Trump’s signature.

As you are all familiar with, on March 27th, 2020, the U.S. Congress passed the CARES Act – the “Coronavirus Aid, Relief and Economic Security” Act - a $2.2 trillion injection of cash into the U.S. economy, which includes an “Economic Impact Payment” of a maximum $1,200 for each American, and $500 for each child claimed as a dependent. I received my letter stating that I will be receiving a payment of $1,700, for my son and myself.

Now, a little bit of history is important here to explain why I was surprised to get this letter. I was born and raised in Milwaukee, Wisconsin, but moved permanently to Switzerland in 2001. For 19 years, I have retained my U.S. citizenship, and as every American, whether living on U.S. soil or abroad, I continue to submit my tax declaration every year, even paying taxes to the U.S. despite the foreign tax credits. But I have a home, family, and roots now in Switzerland, even have Swiss citizenship, and have never spent more than a 3-week period in the U.S. on vacation since leaving in 2001.

Folks… I’ve lived in Switzerland for 19 years!

Do I deserve this stimulus check? I know I am not the only one that will be receiving it. My mother, who has called Switzerland her permanent home since 2009, already received her direct deposit in the U.S. I know other members of the “American Club of Zürich” also received the letter the exact same day as I did. And, perhaps most interesting, I know someone that is also getting a check, even though he never had a U.S. citizenship, hasn’t lived there in a few years, and only spent time there because of earning his master’s degree.

Why would the U.S. government send stimulus checks to Americans outside of the U.S., especially at a time when we already have a huge amount of debt, as well as the coronavirus and everything that came with it that has decimated the economy? Remember, there are potentially 9M - 10M of us expats living in Mexico, Canada, across Europe, and as far as South Korea and New Zealand. I personally have been filing with my same Swiss address for nearly 2 decades, so it is no secret I’ve been gone from the U.S.

And not only are they sending checks, but the IRS sent a letter to warn the check is coming, and, from what I’ve read, as a way to make sure you have received your check, a follow-up letter to confirm the check was sent. That’s a lot of letters!

Not only is the U.S. figuratively “writing a check that will be hard to cash” in the amount of debt they are creating, but they are literally throwing stimulus outside of the country. And there is likely another round coming!

If you think with a level head, it’s understandable that with the amount of time it would take the IRS to “weed out” all of the U.S. taxpayers living abroad, we might be in recovery by the time checks actually went out. After all, I’ve read - and have a friend that works for the IRS that confirmed this - that over the past 10 years, the IRS budget has been reduced by roughly 20%, forcing them to cut staff, training, and toil away with aging technology. Better to cast the net than to hit fish with an arrow, I guess.

On top of the absurdity of the situation, and what looks like an enormous amount of waste, think about this: Blindly sending checks to all citizens without any kind of means testing or control is a policy that is akin to Universal Basic Income, something conservatives decried as “basically Communism” several months back when they argued that Andrew Yang was “crazy” for suggesting it! Our memories do not go as far back as they used to, apparently.

What will I do with my check? I’m really torn about this. I’m still very proud to be an American. With all due respect to those that have given up their U.S. citizenship, I haven’t given up mine and it would be a really hard choice to ultimately make. There is a part of me that might just return the payment to the IRS. After all, do I really deserve it?

And, do you know the look I am going to get at the bank counter here in Switzerland when I bring my check to cash or deposit it? I think I may have used one check since moving to Switzerland in 2001, and even that was probably 18 years ago. Actually, the Swiss and Europeans can’t understand how us Americans still even use checks.

On the other hand, it is coming in my name. And frankly, as I do still pay taxes in the U.S. – what I commonly refer to as my “annual fee” for my blue passport – there is a part of me that says “hell yeah! I deserve it!”. I don’t even use any facilities, public services or infrastructure in the U.S., but still pay taxes for them each year. I’ve read that the only other countries that tax their citizens like this are Libya, North Korea, Eritrea, and the Philippines.

What would you do?

Of course, the letter does mention that I might also receive a debit card instead of a check. But as far as I know, I can use a U.S. debit card outside of the U.S. for a fee. With the U.S. government paying the fee, it just got even easier to spend my stimulus money.

I have some thinking to do yet on the subject, and, if the IRS finally does get my Swiss address right, I should get my check at the end of July. A planned trip to the U.S. in the fall still might not happen if COVID-19 has anything to do with it, so I may have no choice but to spend my stimulus check in Switzerland.

To conclude the letter, President Trump writes “Just as we have before, America will triumph yet again---and rise to new heights of greatness.” With throwing money outside of the country, to be injected into other economies, and considering the crazy amount of debt we are seeing – and will probably continue to see – those “new heights of greatness” are going to take a wee bit of time getting to yet.

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