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Discussion in 'Politics, Religion, Social Issues' started by jkcerda, Feb 10, 2017.
So for tax reasons, meaning this is wealthy people who have the means to do such a thing.
pretty much what I see, they get to hide their money. what I want to know is IF they are still in the U.S. ; if they are they should IMHO be kicked out
That's an interesting notion, but I don't think there's any legal mechanism to kick someone out if they're stateless (like, where do you send someone who isn't a security threat and has no citizenship of other nations?).
Now, if this were Peter Thiel I could see how that would work seeing as he holds dual citizenship...as do many of the uber wealthy, a trend that has been increasing in the last decade or so...as if they know this system can't stand.
After all the pain and suffering I had to go through to get my citizenship I am not renouncing it even if tax rate goes at 120%
At a 120% Greece will look like a paradise, don't kid yourself.
The place is actually a paradise... if they only fixed their economy....
Why? If you're an American looking for absurd deals on a vacation it truly is a paradise right now.
*being facetious because the conditions for the population in Greece certainly isn't good given what the IMF loans have forced on the country.
When socialism goes awry. The struggle is real when you run out of other peoples money.
When going Galt is real.
So is this like a tax loophole thing?
That's certainly what it reads like.
Crazy something like that could be around for that long.
You cannot denounce your citizenship for tax purposes. If the IRS believes you lie on your form and that's really the reason, they continue to tax your income, anywhere you receive it, and when you try to renter the US you risk arrest for tax evasion. If you happen to go to to a country with extradition treaty, you maybe arrested and returned to the US to face your penalty.
Nope. Most of the people who have been doing this the last few years are solidly middle class working stiffs or retirees. Most of these folks haven't lived in the US for many years (decades or ever, in some cases). They get no benefit from their citizenship and only get economic grief, due to these onerous tax laws. Shoot, even Boris Johnson was a victim of these laws and he only happened to be a citizen because he was born here. These laws need to go away and go back to a saner level that does not burden Americans who are living overseas full time. I lived and worked overseas before this stupidity took root and all we needed to do was file a regular tax form. I wouldn't go back overseas to work with these laws in place, no matter how much I might make.
It's not just wealthy people who immigrate out of the US. The requirements on banks also result in it being harder for family members of US military personnel stationed overseas to get local bank accounts.
I have bank accounts with about 5 different major institutions in Canada and never had an issue.
If my income gets much higher I'll probably renounce so that I don't have to pay US taxes since I have no intention of residing there. I believe you have to file taxes even after you renounce though or something messed up.
This is interesting. I've had dual-citizenship (with the UK) for almost 30 years. Talk about a rock and a hard place...still, I've never though about the tax ramifications (i've happily resided in the US for those 30 years)...good to know.
No, you guys got it all wrong.
Yes, a lot of people are doing this for tax reasons, but only because the US tax laws are completely ridiculous.
Most countries tax worldwide income of RESIDENTS of a country, but stop taxing you once you stop living there and move somewhere else.
For example if a Swiss national leaves Switzerland and moves to Singapore, he won't have to pay tax on income he earns outside of Switzerland.
That makes sense doesn't it? He is not using any of the Swiss infrastructure, he is paying tax in Singapore, why should he be paying tax in Switzerland...
In the US it is not the case. If you are a US citizen and you leave the US you can take advantage of the Foreign Earned Income exclusion and earn up to 100k per year tax free, but everything above that is taxed no matter where you live or whether you have ever lived in the US.
There are only two countries that tax citizens living abroad, the US and... Eritrea... a country in Africa you have never heard off...
These are the only two oppressive countries crazy enough to do this.
This even happens to people who have practically never lived or worked in the US. There are many people who were born in the US, but shortly after that moved with their families abroad.
Decades later, once they became successful they receive a letter from the IRS demanding tax + interest + penalties for the previous decades of not paying taxes.
There are also people who have lived and paid taxes for a long time in the US, but realize that it is not the same country where they grew up anymore.
They realize the government's financial situation is unsustainable and the freedoms and rights they had as kids are diminishing quicker and quicker with every year.
They see opportunity elsewhere and move there, but as long as they keep their US citizenship they are still considered property of the US by Uncle Sam and have to continue to give up a portion of their income to finance wars and other destructive things.
Some of these people decide not to be the property of the US anymore and renounce their citizenship at which point they have to pay a huge EXIT tax.
The fact that the number of people renouncing is growing despite this exit tax is a testament to how sick and tired people are of these ancient laws.
On top of that this is not just for wealthy people. There are many countries that will grant you citizenship through naturalization after you live several years there.
You don't have to be rich to do that - anyone can do that.
And if you start a new life in a different country, pay all the taxes you are legally required there and are not using any of the services and benefits the US provides, what is so wrong with wanting to stop cutting a huge amount of your hard earned money to the US?
Looks like it costs $3000 US to renounce, what a joke.
As noted above, one cannot renounce US citizenship in an attempt to avoid taxes. However, I suspect the increase in those denouncing their US citizenship is about exasperation with US politics. Dubya was bad enough, then we had the racist bad-mouthing of Obama, b*****t crazy talk from the GOP (think Cruz), and now the election of Trumptin. To say the US's overseas reputation is tarnished hardly captures the disillusionment with the direction the US is heading. Even Europeans are beginning to talk about whether the US represents a threat. My kids are talking about renouncing their citizenship before the costs go up even further, but hopefully it's just talk.
Here's a case of a veteran renouncing because U.S. tax laws made things too difficult. It also goes on to explain other problems posed by our tax laws.
No. Ordinary Americans who live in Europe fall under this AFAIK.
If you earn above a certain amount, you must file although usually you'll owe nothing (unless you're rich). However, if you fail to file, you might get penalised by being forced to pay taxes in both countries (in essence, the deduction you take for paying taxing in the country of residence is revoked). The US is getting increasing efficient at tracking down who doesn't file. You don't want to go there.
Moreover, there is the FBAR (think 'FUBAR') rules about reporting accounts that you have overseas above $10,000. I think there is another set of rules for accounts over $100K. As I recall this includes any business accounts you can sign for (if you 'control' it, you must report it as I understand it). That's the real PIA, and prevents some companies from hiring US citizens into managerial positions.
I am no accountant and assume no responsibility or liability for any decision you make.
Anyway, when the FBAR rules became known among the US ex-pat community there was a collective Whiskey Tango Foxtrot moment. Nobody knew about this rule because, very cleverly, no note of it is made in the tax forms or instructions (like where you declare interest from bank accounts).
5500 people / year is a tiny number.
FATCA is a pain. Imagine going through all that tax filing hassle, even if you'd lived pretty much as a full citizen of another country for 10, 20, 30 years.
It's expensive for non-US banks to implement too. Some of the smaller banks have actually kicked their American clients out - the cost of implementing the rules just aren't worth it.
FATCA isn't going away though... it morphed into CRS. CRS is the other OECD countries getting in on the act; now banks have to report the accounts of these citizens back to their home governments too.