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Wealthy people are renouncing American citizenship

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Re: Wealthy people are renouncing American citizenship

#271

Post by goodpoint »

JumpCrisscross wrote: post #254
dlisboa wrote: post #247

Earlier quoted context omitted.

That’s only relevant to a tiny percentage of American immigrants who travel/work in conflict zones and unfriendly countries. It could even be said Americans are more at risk in those countries for being American and no other reason. So for people outside of that there won’t be any benefit.

> only relevant to a tiny percentage of American immigrants who travel/work in conflict zones and unfriendly countries I know a (thankfully small) handful of cases in which Americans' kids were arrested in a friendly country. The State Department provided invaluable support. (Recommendations on legal counsel, prudent next steps, relevant authorities' phone numbers...nothing nefarious, just context and support.) I am…

> Since this article concerns itself with rich overseas Americans, I think it's relevant

Not many millionaires are getting arrested in general, due to the availability of lawyers and so on.

The US support might be very relevant for a war reported captured by ISIS.

But most millionaires are not going to be in those locations and/or able to afford good private security.

Re: Wealthy people are renouncing American citizenship

#272

Post by dsomers »

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/

I feel for you. My grandparents were apart of the Italian diaspora too, but they ended up in Canada. I often thought how difficult it would be if I had to choose because both countries are close to my heart. I’ve seen a number of American friends that are also duel citizens have to deal with the stress and unfairness that you have. I just feel really lucky and privileged that I don’t have to be in the position to choose even though I no longer live in Canada or Italy.

Re: Wealthy people are renouncing American citizenship

#273

Post by revolvingocelot »

zarkov99 wrote: post #52

Of course they are. When the dominant narrative is that America is a racist hellscape, built on oppression and plunder then things like patriotism and civic spirit seem absurd, quaint notions, ripe for ridicule.

This line of argumentation is always so strange to me because it supposes a strange sort of emotional fragility in the rich that I can't quite square with the exceptionalism we allllll know they possess.

You think the dominant narrative is that America is a racist hellscape? No, no; America is the greatest country on the planet. I heard it on the news. Surely the increasingly consolidated media, owned by the emotionally-fragile rich, could address the dominance of that narrative? Failure to come together to address such a horrifying distortion of reality, after all, would be extremely dangerous to our democracy[0].

In seriousness, I think that your conclusion that the rich are leaving because of culture-war issues is unsupported by the assertion that the dominant narrative is that Murica sucks. The dominant narrative is that America is the land of the free, dude. Unpleasant realities like Trump profiting from the Secret Service having to stay at his hotels, or the dynastic nature of Presidential politics, or how the IRS goes after the poor for lack of the funding that hitting the big-time cheats would require, or how three of the most recent dynasties had ties to an infamous pedophile, or how that pedophile "killed himself" while in high-profile protective custody -- it's all unimportant. Propaganda both subtle and gross smooths things over. The Pledge of Allegiance seems very, very strange to many other cultures, especially Western ones.

I think it's far more likely that they're striking out, as their ancestors once did, to seek a better life. If I were in the habit of cluttering my environment with effluent ponds of various negative externalities, I too would probably want to up and move somewhere with more of a pleasant aspect. Especially if I got to keep all the proceeds of my previous exploitations.

[0] https://www.youtube.com/watch?v=ZggCipbiHwE

Re: Wealthy people are renouncing American citizenship

#274

Post by throwaway5372 »

alephnan wrote: post #200

This title would be less click-baity if it was 'People renouncing their citizenship are wealthy' because I don't think poor people can afford to. That says nothing about whether poor people are more or less interested in doing so.

I was feeling the same.

I live abroad and I'm not rich. I sometimes debate renouncing my US citizenship, but working remote in the US makes me well off here. If I had a local job making piles of money I might be more inclined to. My only complaint is that when I go to visit mom, I get endless grief from the immigration officials.

Re: Wealthy people are renouncing American citizenship

#275

Post by mekal »

alephnan wrote: post #136
altcognito wrote: post #2

They’ve been allowed for decades to avoid paying for the infrastructure and management of the country while simultaneously holding most of the influence. “Renouncing citizenship” means they’ll give up none of the influence, lose the taxes, live how and wherever they want. The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. Faced with actual conseque…

You are assuming 100% of these people are moving to countries with lower taxes. That's simply not true. In fact, countries that have high standard of living usually have equal or higher taxes than the states. Contrary to what you may assume, especially people who have sought an alternative lifestyle abroad value value having a high standard of living, and not going to move to some shithole just because it has lower t…

What countries are they moving to? Currently if you save and invest your money you can pass it to your children (or whoever) with a step up in cost basis. So the investments can go on indefinitely from generation to generation essentially without tax. Because technically, you haven't realized any gains yet. In the meantime, you can borrow from banks against these investments (also I believe not taxable, at least not like income tax). These new laws would get rid of the ability to pass on your wealth without a significant (like 50%?) tax because they would recognize death or gifts as a taxable "transaction". Unless you donate it to charity. Which might be why Buffet is leaving all of his money to charities (which are run by his kids...or at least some of them).

I'm honestly still trying to figure this out but that's what I understand so far. Another interesting consequence is that calculating long term investment cost basis's sounds like a f'ing nightmare. Maybe that's why the step up rule exists?

Re: Wealthy people are renouncing American citizenship

#277

Post by oblio »

nivenkos wrote: post #202
KptMarchewa wrote: post #173

Earlier quoted context omitted.

If you're software engineer in Poland and spend some time architecting your contract, you can pay only 5% income tax (+ irrelevant amount for social security) as "R&D tax relief for commercializing IP rights". Point you're making applies to countries like Belgium or France.

You'll still get like 10% of a US salary though.

10% is a gross exaggeration, though. Romania has lower salaries than Poland, as far as I know, and in Romania as a senior engineer in a decent company you can get a total > compensation of €3.5k - €4k per month, that would be ~$4k - $4.8k per month, so ~$48k - ~58k. Again, net. And probably more since there are companies that give you RSUs/ESPPs, so you can go along for the ride. Not as many as in the US, obviously, but a decent chunk. So you could even push towards something like $70k.

I think even at the biggest FAANGS in the US, you total > compensation as a senior engineer will be $250k-$300k, leaving the ratio somewhere around 4-5x (and this is for a super limited set of companies and positions; I'd imagine that the average ratio would be closer to 2-3x).

And don't forget that local living expenses are minimal. You'd get to keep maybe even 90% of your salary.

Re: Wealthy people are renouncing American citizenship

#278

Post by rory »

engineer_22 wrote: post #26
rory wrote: post #6

Without getting into the moral debate of taxing US Citizens globally... how could the US government stop this from happening? Surely these ex-citizens hold a lot of assets in the US, and most probably spend a lot of time in the country. Could the gov't effectively banish them or ban them from holding assets in US assets? What would be the side effects of such a law?

There's no reason to stop it. Their assets are still paying taxes.

I'm asking simply as a thought experiment.

And the reason to stop it is obvious-- to procure other taxes from those people. For example, many jurisdictions don't have an inheritance tax, and the US Gov't would likely want that cut upon the (ex?)-citizen's death.

Re: Wealthy people are renouncing American citizenship

#279

Post by jjgreen »

mmmeff wrote: post #256
RufusJacksons wrote: post #84

Earlier quoted context omitted.

Couldn't agree more, sounds like you're in Australia too - I've been here 9 years and am yet to file tax... Interested how bad they will fuck me when I do...

Fake your death while you still can

A practical guide: https://en.wikipedia.org/wiki/The_Fall_and_Rise_of_Reginald_...

Re: Wealthy people are renouncing American citizenship

#280

Post by emodendroket »

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…

Most people don't actually owe anything so the burden is mostly administrative, and what you're going through it for is not "where you were born" but continued citizenship and attendant benefits. As the article describes, you're free to give that up if you don't think it is worth it.
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