Worth noting that this story gets run every year around this time (because that's when the annual #s are released) and is always about last year.
Wealthy people are renouncing American citizenship
431–440 of 876 posts
Re: Wealthy people are renouncing American citizenship
#432Re: Wealthy people are renouncing American citizenship
#433It'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…
US states do the same thing. States with income tax will tax you whether you work in the state, or you are resident in the state.
Or if you're in NY for too many days, even not for work, they'll tax you too :)
Re: Wealthy people are renouncing American citizenship
#434Earlier quoted context omitted.
It is awful - I'm glad you never had to deal with. It provides little revenue and causes a huge amount of hassle and makes living overseas way more difficult.
American expat here - agreed with the other expats - it’s the filing that really, really sucks. Like really. Breaking the difficulty down in terms of priority. 1 - just trying to work through what all might possibly be owed and not owed to US as well as the country(ies) one operates in. 2 - Identifying through which paperwork to declare it, while also ensuring income / business reporting is copacetic with the tax reg…
Why doesn't the US reduce it to a flat tax? Say, $1000/year to send you your election ballot, and evacuate you in case something goes horribly wrong.
Re: Wealthy people are renouncing American citizenship
#435Earlier quoted context omitted.
On the other hand, is it right to be able to leave the country indefinitely, not contribute to the country at all, but still expect to have all the benefits of citizenship forever?
What benefits does one have when living in a foreign country as a US citizen? There is no legal representation. There is no access to US government services. What exactly would an overseas US citizen be paying for?
If there are no benefits to being a US citizen while living abroad, there should be no issue with renouncing their citizenship.
Why do they want to maintain their citizenship if it doesn’t give them anything?
Re: Wealthy people are renouncing American citizenship
#436Earlier quoted context omitted.
Not too bad really for us overseas Australians. If you took out a HECS (0% interest, indexed to inflation) loan for university study you still need to file taxes when resident overseas and continue making payments if you earn over the threshold. If you are resident in Australia more then 6mths of the year you must complete an Australian tax return, but for most people that involves logging in around september and che…
They only just changed the laws a month ago to make it so opaque and vague about who qualifies as a tax-resident or not. It's basically a "if we want we will tax you" situation. The 183 day rule means little if you have even something as innocuous as a bank account back home now. It's a ridiculously stricter change that is entirely open to interpretation by the ATO. https://www.mondaq.com/australia/income-tax/1070880…
What you are describing is a pretty common requirement. Canada has a similar requirement, and while a passive bank account would in itself not be considered 'ties' to the country, an active one that sees use might.
Re: Wealthy people are renouncing American citizenship
#437Earlier quoted context omitted.
It is awful - I'm glad you never had to deal with. It provides little revenue and causes a huge amount of hassle and makes living overseas way more difficult.
Perhaps the revenue is not very great but if there were a blanket exception I think you’d suddenly find a lot more people gaming then system to not technically be US residents and thereby escape large amounts of liability.
Most countries don’t tax citizens living abroad on foreign revenue, and just forget about them once they become residents elsewhere (unless they still have income from their country of origin).
Re: Wealthy people are renouncing American citizenship
#438It'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…
I used to live internationally and the taxes weren’t that much more complex. It really shouldn’t cost thousands, it’s just two extra forms if I recall correctly. If you Are living in high tax regimes like Switzerland you don’t have double tax on the first $xx,xxx in income, it used to be close to 90k.
Switzerland is not a high tax regime (outside of some French speaking Kantons).
Re: Wealthy people are renouncing American citizenship
#439It'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…
AFAIK if you live in a country like Canada with higher taxes you still have to file to maintain citizenship but you end up paying zero since you can deduct what you paid in your home country. This would apply to people relocating to countries with a lower tax base. In that case you have to renounce.
There isn’t always symmetry in the tax status of various elements. The US doesn’t recognize Canadian Tax Free Savings Accounts (similar to Roth IRAs) so you can’t benefit from them without being taxed in the US.
Re: Wealthy people are renouncing American citizenship
#440Not surprised. Rich people have disproportionally many crooks who have both desire and capabilities to avoid paying taxes.