Wealthy people are renouncing American citizenship • Hacker News Board

Re: Wealthy people are renouncing American citizenship

#451

Post by digianarchist » Thu, Aug 05, 2021, 5:21 PM UTC

ne0flex wrote: post #416

Being a Canadian, I started a tax-free savings account "TFSA" (similar to a US Roth IRA but with way less restrictions)when I turned 18 and was investing heavily in it. A few years later I would get a green card and move to the US and didn't touch the account afterwards except make a few rebalances here and there. My brokerage asked me to update my information and asked me if I was a "US" person to which I answered y…

The general advice is to liquidate your TFSA, ISA etc. before moving to the US.

Re: Wealthy people are renouncing American citizenship

#452

Post by jandrewrogers » Thu, Aug 05, 2021, 5:21 PM UTC

emodendroket wrote: post #319

simonh wrote: post #301

Earlier quoted context omitted.

Well there are a handful right here on this comment section. I'm a Brit and have known maybe half a dozen US citizens reasonably well here in London over the years, at least two of which renounced US citizenship for tax reasons while I knew them. It's definitely a thing.

According to another post you do not owe tax on income below $108k so that’s probably not going to affect most filers, though I’m sure an anomalously high number of HN users are earning six-figure salaries.

That is only applies to so-called earned income, you still owe taxes on all of your other income. And many people earn considerably more than $108k.

Furthermore, even under tax treaties, it is not uncommon for some part of your income to be double taxed due to differences in recognition and classification of income and foreign taxes paid. Americans often have to pay more taxes than if they only had to pay taxes in either country separately.

And this is on top of the onerous reporting overhead and other difficulties.

Re: Wealthy people are renouncing American citizenship

#453

Post by SonicScrub » Thu, Aug 05, 2021, 5:21 PM UTC

hnthrwy1111 wrote: post #250

alephnan wrote: post #208

Earlier quoted context omitted.

> You have a duty not to comply. If you're making income in America, you owe US tax taxes. If you are a permanent resident of the United States, you owe US taxes. Whether the IRS is using mafia tactics or not, what you are describing is tax evasion. There are legal ways to minimize your tax burden, but this is horrible advise.

In my case as an accidental American I was not born in the US, I have never lived in the US, I have never worked in the US, I receive no benefits from the US, I was ineligible for the covid stimulus, I am unable to vote in US elections. It's comical to categorize my refusal to participate in this scam as tax evasion. I don't live in the US, I live in a supposedly sovereign nation. Just as Americans pointed out the ab…

I agree that you are ethically in the right, but it is still legally "tax evasion", and therefore probably not the best advice to be given to others. I say this as someone who has personal experience with the "accidental American" status. Depending on where you are, the IRS may discover your "American" status, and the penalties could be worse. For example, Canadian banks share information with the IRS under FATCA.

https://www.cbc.ca/news/politics/fatca-tax-deal-forces-canad...

Re: Wealthy people are renouncing American citizenship

#454

Post by aarchi » Thu, Aug 05, 2021, 5:22 PM UTC

fmajid wrote: post #193

PragmaticPulp wrote: post #94

Earlier quoted context omitted.

> 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. This is exactly why these people are renouncing US citizenship: They’re living overseas as citizens of another country and, like anyone rich or poor, don’t want to be paying taxes to a country they aren’t living in.…

Some are "accidental Americans" like UK Prime Minister Boris Johnson, born in the US, who discovered as a US citizen he had to pay capital gains taxes when he sold his London apartment. Australia requires its parliamentarians to have only Australian citizenship and some discovered for the same reason they were not eligible. Furthermore, the burden of FATCA is sufficiently onerous that many banks etc. just refuse to d…

Well Germany also requires that you surrender other citizenships when you get a German citizenship, unless you are a German dual citizen through ancestry.

Re: Wealthy people are renouncing American citizenship

#455

Post by ElFitz » Thu, Aug 05, 2021, 5:22 PM UTC

emodendroket wrote: post #292

dustinmoris wrote: post #260

Earlier quoted context omitted.

> U.S. citizenship carries extraterritorial benefits. Not sure about actual benefits. The US passports is one of the worst when it comes to travel. Many countries have stricter entry rules only for US citizen, or require at least a higher Visa fee in comparison to other Western nations or outright don't allow US citizens entry at all. I found my Austrian passport to be actually extremely beneficial. Most powerful pas…

"One of the worst" maybe if you're comparing to the EU, but definitely not in a wider global sense.

> "One of the worst" maybe if you're comparing to the EU, but definitely not in a wider global sense.

Definitely. But comparing the benefits of US citizenship to that of, say, Venezuela or Tchad would be pointless, now, wouldn’t it?

Re: Wealthy people are renouncing American citizenship

#456

Post by AdamN » Thu, Aug 05, 2021, 5:23 PM UTC

bell-cot wrote: post #262

circular_logic wrote: post #63

Interesting facts about renouncing American citizenship: - There is renunciation fee that has to be paid and currently stands at $2,350 (the highest in the world).[1] - A final tax return will sill need to be filed. [1] - An Expatriation tax is payable if [..] Your net worth is $2 million or more on the date of your expatriation. you will be treated as having disposed of your assets the day before your expatriation a…

> ...it would seem that the IRS is trying very hard make this process unappealing IANAL, but I believe that all the unpleasantries which you note were decided by the U.S. Congress. (Most probably with the President's sign-off.) Making the IRS out to be the Real Villain(tm) here only helps a bunch of self-serving politicians to evade responsibility.

+100

Re: Wealthy people are renouncing American citizenship

#457

Post by zarkov99 » Thu, Aug 05, 2021, 5:23 PM UTC

revolvingocelot wrote: post #273

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 emotiona…

I think you misunderstand me. I am not saying the rich are leaving because of culture war issues. I am saying that the incessant claims that America is just the worse erodes the social fabric for everyone, including the rich, and one manifestation of such erosion is that it becomes morally acceptable to cheat the system. After all it is a corrupt, racist, oppressive, hypocriptical imperialistic system, so why pay into it?

Re: Wealthy people are renouncing American citizenship

#458

Post by KittenInABox » Thu, Aug 05, 2021, 5:24 PM UTC

ninja3925 wrote: post #291

amilios wrote: post #141

Earlier quoted context omitted.

This is a fantasy. Voluntary contracts imply that workers have the option of not working for starvation wages, which in many cases is simply not true. If your options are to work a dead-end minwage job or, well, die on the street, is it really a voluntary contract that you're entering? I would say not.

Of course! You can choose: - Not to work - Move to a city/state with better opportunities - Take classes to specialize - Work hard and get promoted - Start your business Aren't these valid options? No "cigar smoking fat cat" force workers to sign the contract under duress.

How do you have the money to move, take classes, or start a business (business licenses cost $$$) if you are choosing between abusive/dead-end work and homelessness?

Re: Wealthy people are renouncing American citizenship

#459

Post by mywittyname » Thu, Aug 05, 2021, 5:25 PM UTC

fmajid wrote: post #193

PragmaticPulp wrote: post #94

Earlier quoted context omitted.

> 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. This is exactly why these people are renouncing US citizenship: They’re living overseas as citizens of another country and, like anyone rich or poor, don’t want to be paying taxes to a country they aren’t living in.…

Some are "accidental Americans" like UK Prime Minister Boris Johnson, born in the US, who discovered as a US citizen he had to pay capital gains taxes when he sold his London apartment. Australia requires its parliamentarians to have only Australian citizenship and some discovered for the same reason they were not eligible. Furthermore, the burden of FATCA is sufficiently onerous that many banks etc. just refuse to d…

Is it possible to operate using a business account in other countries? It's pretty cheap and easy to do in the USA.

Re: Wealthy people are renouncing American citizenship

#460

Post by pacman2 » Thu, Aug 05, 2021, 5:25 PM UTC

sokoloff wrote: post #370

kaboomman wrote: post #240

Earlier quoted context omitted.

This. Living (even partially) overseas as someone who was born in the U.S. has so many disadvantages. The U.S. is the only country in the world that imposes global tax. Not only that, taxes are really complex and cost a fortune to file if you have overseas assets. Now, add to that that I cannot sign up for many bank accounts or other financial institutions because they don't accept U.S. customers - they don't want to…

Eritrea imposes a global tax as well.

NK too