Wealthy people are renouncing American citizenship • Hacker News Board

Re: Wealthy people are renouncing American citizenship

#211

Post by EE84M3i » Thu, Aug 05, 2021, 1:59 PM UTC

mythz wrote: post #197

EE84M3i wrote: post #182

Earlier quoted context omitted.

There is an example[1] on their official site of an Australian living abroad in Japan and being a "resident for tax purposes" and thus being taxed, but not being a resident for other purposes. [1]: https://www.ato.gov.au/Individuals/coming-to-australia-or-go...

Right they're still classified as a resident since they're on a temporary contract who intended on returning after their contract has expired. If they had permanent residence in a different country they wouldn't need to.

As far as I know, in most countries, acquiring permanent residence requires living in the country for years first and then applying, so you will be on time-limited visas until then. That is the way it is in Japan, and it is 10 years to get PR, in the general case.

Anyway, I'm not an expert on Australian tax law by any means, I just wanted to note that it's not always so clear cut as "do other countries tax citizens living abroad".

Re: Wealthy people are renouncing American citizenship

#212

Post by ma2rten » Thu, Aug 05, 2021, 1:59 PM UTC

A lot of people who take this drastic step are tech zillionaires: Eric Schmidt, the former Alphabet CEO, has applied to become a citizen of Cyprus.

This is such lazy reporting. Is there any data showing the connection to tech? Is there any indication that Eric Schmidt would renounce his American citizenship if he becomes Cypriot? What is a zillionaires?

Re: Wealthy people are renouncing American citizenship

#213

Post by trutannus » Thu, Aug 05, 2021, 2:00 PM UTC

cjaybo wrote: post #161

trutannus wrote: post #117

Earlier quoted context omitted.

> They don't have as much political power They're basically the North Korea of Africa. This is a massive understatement.

So they have as much political power as the US?

I know you're being facetious, but still, even as a joke this comparison is deeply wrong. There's nothing even remotely comparable between the two nations. You won't have your family interned in a concentration camp for moving to Italy for example.

Re: Wealthy people are renouncing American citizenship

#214

Post by larrysalibra » Thu, Aug 05, 2021, 2:01 PM UTC

shell0x wrote: post #168

larrysalibra wrote: post #103

Earlier quoted context omitted.

As a former American who lived abroad for about 11 years before renouncing, “cartoonishly cruel” is a pretty accurate description of the system. It’s even worse an American entrepreneur abroad because that makes things even more complicated. I gave up jumping through the hoops in 2018 and the self-torture and renounced. I shared my story in case anyone is interested: https://larrysalibra.com/goodbye-usa/

This was a good read. It's interesting that you decided to stay in HK after the protests/hostile takeover in 2020. My partner and friends all left HK for the UK, Australia, and Canada.

Thanks for reading!

The stay versus go debate in HK is always very interesting and one that has been going on for decades and will no doubt continue for many people.

Re: Wealthy people are renouncing American citizenship

#215

Post by Chris2048 » Thu, Aug 05, 2021, 2:03 PM UTC

ren_engineer wrote: post #39

nxmnxm99 wrote: post #16

Earlier quoted context omitted.

It's probably pointless to discuss this with someone who insists on generalizing anyone above a certain net worth as being selfish, but - As it turns out, it's no longer the 80s, and there are increasingly multiple other countries were the super-rich can move their activities, wealth and lifestyle to without missing a beat. Hanging around financial circles, I've seen a large exodus of people through the pandemic star…

the point is that generally there is some expectation of loyalty to the country that allowed you to become super-rich in the first place. In finance specifically many of these people participated in outsourcing a huge chunk of the American economy for short term profit and their own gain and are now abandoning ship abandoning your country for lower taxes so you can "live your lifestyle without missing a beat" is disg…

> the country that allowed you to become super-rich in the first place

But it's never enough. taxes already work on a scale such that the rich pay more (% wise), and they still owe more?

Almost every aspect of participating in the economy is taxed, e.g paying business-related taxes - those that participate more therefore pay more of these taxes too.

It seems "what is owed" is never clearly stated so you can always be hit up for more.

Re: Wealthy people are renouncing American citizenship

#216

Post by cletus » Thu, Aug 05, 2021, 2:04 PM UTC

It's obviously a burden on the not-so-wealthy to be a US citizen living overseas. There's the annual requirement to file a tax return (most countries don't do this) but also the implications for opening accounts thanks to FATCA. The IRS requirement in particular needs to be addressed.

Fun fact: the US is becoming a haven for tax avoidance and privacy simply because they're forcing all this disclosure information on other countries and are completely unwilling to reciprocate.

A lot of people concentrate on the super-wealthy renouncing US citizenship. I mean that's going to happen. For people who don't know you get taxed on your holdings at current market rates when you do this. Obviously people still do this because they realize it's going to be cheaper in the long run. I don't really care about that.

What I do care about is removing the political influence of former citizens. They are technically foreigners now and there are restrictions on foreign influence on US elections. So we should be:

- Stopping former citizens from contributing to political campaigns, PACs and politically active charities;

- Companies they control or directly control should likewise be prohibited from contributing; and

- Any such organization that contributed to political candidates directly or indirectly should be forbidden from accepting foreign money or having such foreigners in any leadership or executive position.

We should probably do something about holding US real estate too but that's a whole other discussion.

Re: Wealthy people are renouncing American citizenship

#217

Post by vertis » Thu, Aug 05, 2021, 2:05 PM UTC

larrysalibra wrote: post #103

academia_hack wrote: post #42

It's so irritating to be an American that has moved overseas. Basically the only country in the world that charges taxes on money you make and spend somewhere else, just because of where you were born. Thanks to IRS regulations, 90% of investment firms will just reject me outright rather than deal with the paperwork. Getting someone to help file my inordinately complex taxes costs thousands of dollars more than I act…

As a former American who lived abroad for about 11 years before renouncing, “cartoonishly cruel” is a pretty accurate description of the system. It’s even worse an American entrepreneur abroad because that makes things even more complicated. I gave up jumping through the hoops in 2018 and the self-torture and renounced. I shared my story in case anyone is interested: https://larrysalibra.com/goodbye-usa/

This is a really interesting read. I'm not a US citizen (AU & NZ) and don't face the same problems when being overseas, but I definitely relate to it not really feeling like home now that I've been away for several years.

Thankfully, it's not as hard to not pay AU/NZ taxes, it's still a little bit painful to prove you're not living there, but not even in the same league as the US.

Re: Wealthy people are renouncing American citizenship

#218

Post by darksaints » Thu, Aug 05, 2021, 2:06 PM UTC

pwinnski wrote: post #121

rwmj wrote: post #60

Earlier quoted context omitted.

No one's moving the Europe for the lower taxes.

On the contrary! The overall tax burden of many European may be lower than that of the US when you compare like for like. That is, the cost of all taxes in Europe and the cost of all taxes and the fees paid for equivalent services in the US. For most people, that's taxes in Europe vs taxes + health insurance premiums in the US. Even if the combined totals are equivalent or higher in Europe, government-provided health…

That might be true for a lot of people, but not for wealthy people.

Re: Wealthy people are renouncing American citizenship

#219

Post by beagle3 » Thu, Aug 05, 2021, 2:07 PM UTC

yardie wrote: post #131

academia_hack wrote: post #42

It's so irritating to be an American that has moved overseas. Basically the only country in the world that charges taxes on money you make and spend somewhere else, just because of where you were born. Thanks to IRS regulations, 90% of investment firms will just reject me outright rather than deal with the paperwork. Getting someone to help file my inordinately complex taxes costs thousands of dollars more than I act…

> 90% of investment firms These must be very small meat and potatoes investment firms then. They might not have a compliance department and might not be able to justify the salary of having someone tackle FATCA requirements. I, as an American abroad primarily used the big banks (HSBC, BNP, Barkleys) because its built in to the service.

In Israel (9m pop), non of the banks available to the general public (Poalim, Leumi, Discount, Iggud/Mizrahi) will let you do anything other than a checking account and a saving account. Perhaps a loan but definitely no holdings; and similarly no broker will either. They are not small. It just isn’t worth it to them financially so they don’t. There are est. 300k US tax payers in Israel, but while the profit is per-person, the compliance costs are huge and mostly constant.

HSBC in Israel, last I Heard, had a $2M account minimum.

Re: Wealthy people are renouncing American citizenship

#220

Post by adventured » Thu, Aug 05, 2021, 2:07 PM UTC

pedrosorio wrote: post #135

aabaker99 wrote: post #112

Earlier quoted context omitted.

Unless there are more than 20 million millionaires, you're talking about the top 6 percent of the wealth distribution. I wouldn't call that particular percentile "barely middle class". That term probably should be reserved for the 60th percentile, no? Middle being 60 to 40? 70 to 30? Edit: fixed my percentile thanks to child comment!

> Unless there are more than 20 million millionaires, you're talking about the top 0.6 percent of the wealth distribution 6 percent

You're including non-adults (330m population @ 6%). It's closer to 8% of the adult US population. Not very many people under 18 are millionaires or reasonably likely to be. The non-adults in question fall under the millionaire household grouping.

And if anyone is interested in the household wealth distribution (as of 1Q21):

Top 1%: $41.5 trillion | 90%-99%: $48.8 trillion | 50-90%: $36.5 trillion | bottom 50%: $2.6 trillion

$129.5 trillion total household assets.

There are around 128 million households in the US. The average American household is now worth a million dollars (the median is obviously far lower).

That top 1% of US households - 1.28 million households - holds an average of roughly $32 million in assets.