Wealthy people are renouncing American citizenship • Hacker News Board

Re: Wealthy people are renouncing American citizenship

#481

Post by kogepathic » Thu, Aug 05, 2021, 5:39 PM UTC

jontas wrote: post #265

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.…

The article is not drawing an arbitrary line: > The IRS publishes a quarterly list of the names of people who have renounced their citizenship or given up their green cards, but it only includes people with global assets over $2 million It may be an arbitrary line, but if so, it's the IRS drawing it.

> The IRS publishes a quarterly list of the names of people who have renounced their citizenship or given up their green cards, but it only includes people with global assets over $2 million

This claim is total crap. The list includes all US citizens who renounce their citizenship, regardless of their net worth. [1]

You also cannot renounce your citizenship for tax dodging [2]:

> Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect on their U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information).

So plan to become rich after renouncing (and without the IRS noticing).

[1] https://www.federalregister.gov/quarterly-publication-of-ind...

[2] https://travel.state.gov/content/travel/en/legal/travel-lega...

Re: Wealthy people are renouncing American citizenship

#482

Post by ziggus » Thu, Aug 05, 2021, 5:40 PM UTC

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…

The 20% capital gains tax bracket is applicable to assets held longer than one year.

Short term gains are taxed at your normal tax rate.

Re: Wealthy people are renouncing American citizenship

#483

Post by danuker » Thu, Aug 05, 2021, 5:42 PM UTC

Retric wrote: post #348

FredPret wrote: post #324

Earlier quoted context omitted.

Citizens are not assets of the state

It’s a reciprocal relationship with rights and obligations on both sides not ownership. For example the FBI doesn’t invoice victims or their families when it gets involved in kidnapping cases. Capital gains are deferred without interest until an asset it sold, that doesn’t mean there wasn’t an obligation for those years.

> rights and obligations on both sides not ownership

I would say consequences of infringement are much worse for individual citizens than for the government.

If the government confiscates some of your money through "civil forfeiture", you then have to sue the government and prove the money was gained legally.

https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

On the other hand, try not filing your taxes. What happened to John McAfee might happen to you.

Re: Wealthy people are renouncing American citizenship

#484

Post by seanc » Thu, Aug 05, 2021, 5:43 PM UTC

pitaj wrote: post #413

boulos wrote: post #398

Earlier quoted context omitted.

Can you clarify how you are an accidental American? E.g., were you born on a US base in another country?

Wikipedia says [1]: > U.S. law also states that a child born outside of the U.S to a U.S. citizen parent who previously spent sufficient time in the U.S. is a U.S. citizen at birth, regardless of whether the child also has the citizenship of the country of birth or another citizenship. U.S. citizens married to fellow U.S. citizens can transmit U.S. citizenship to their children if either parent has ever had a residen…

I'm a US expat living in Canada, and a parent of Canadian children. They are eligible for US citizenship, but don't become US citizens unless I go through a procedure to register them as such.

Re: Wealthy people are renouncing American citizenship

#485

Post by trasz » Thu, Aug 05, 2021, 5:43 PM UTC

Retric wrote: post #479

trasz wrote: post #469

Earlier quoted context omitted.

Just like every other civilized country. The fact that it was even mentioned suggests that for Americans it might not always be the case in some situations, which is quite frightening.

It’s not an issue in American. Thing is we are talking about renouncing citizenship so the comparison is to other countries. Looking deeply at the social counteracts of other countries is really interesting because of how many different things we take for granted aren’t universal. Free speech in the US is more limited than I would like, but it gets much worse even in countries that look civilized in other ways.

FBI has no jurisdiction outside the US, so you don’t gain anything this way.

Free speech in US is poorer than in most Western countries, as it fails to protect you from anything other than most government institutions. For example in US it’s fine for your employer to fire you because they don’t like what you say in your private time. Other countries provide better protection.

My question is still unanswered: why would anyone in US even think about their law enforcement invoicing the victims?

Re: Wealthy people are renouncing American citizenship

#486

Post by depressedpanda » Thu, Aug 05, 2021, 5:43 PM UTC

emodendroket wrote: post #407

depressedpanda wrote: post #393

Earlier quoted context omitted.

The article states > "There are probably 20,000 or 30,000 people who want to [renounce citizenship], but they can’t get the appointment," Lesperance said. "There’s not a peak demand — the system’s capacity has peaked." Also, it seems you need to pay a non trivial sum to do it, which is a real problem for US citizens abroad who are not rich. "Free to give that up" does not apply, unfortunately.

Not sure where you got the thing about the cost, which doesn't seem to be in the article, but it also flatly states that "The people who flee tend to be ultra-wealthy, and many of them are seeking to reduce their tax burden."

The article talks about the ultra wealthy, but they have the power, money and means to easily deal with the citizenship taxation bs. I don't care about them.

The problem is that those rules are punishing regular people.

I know one person who wasn't allowed to open bank accounts because of her citizenship. Another who yearly gets stressad out because filing US taxes is such a grueling process compared to the local process where you're done within ten minutes. Another wants to renounce citizenship because he doesn't want to deal with the bureaucracy, but he cannot afford it.

They all live in Sweden, which I doubt anyone sane would consider a tax haven.

If Eritrea is the only other country in the world that implements similar draconian tax laws, maybe there's something wrong with those laws?

Re: Wealthy people are renouncing American citizenship

#487

Post by JumpCrisscross » Thu, Aug 05, 2021, 5:45 PM UTC

bnralt wrote: post #411

JumpCrisscross wrote: post #184

Earlier quoted context omitted.

> Only because of US laws. I have two citizenships, but one residency. U.S. citizenship carries extraterritorial benefits. For example, we're pretty good at getting our people out of thorny situations, even at great national expense. If someone isn't paying to support that, it makes sense to force a revocation decision.

Many Americans seem to believe that, but it doesn't actually seem to be the case. For instance, when Yemen was falling apart, countries like China, India, Pakistan, Russia, and Indonesia all worked hard to evacuate their citizens, many using their military to do so[1]. The U.S. response was to tell American citizens they were on their own[2]. The U.S. embassy even recommended that Americans seek assistance from India…

> I'd say America is worse than other countries at getting citizens out of bad situations

I last saw data through the UNDP about ten years ago. It's very possible that the situation has degraded. And no country has 100% coverage, far from it. At the time, however, the U.S. government was exceedingly good at exfiltrating citizens from disaster zones. Granted, it has had more experience doing this because, well, empire.

The situation was starker for low-level assistance, in which many diplomatic missions will not get involved.

Re: Wealthy people are renouncing American citizenship

#488

Post by Retric » Thu, Aug 05, 2021, 5:47 PM UTC

trasz wrote: post #485

Retric wrote: post #479

Earlier quoted context omitted.

It’s not an issue in American. Thing is we are talking about renouncing citizenship so the comparison is to other countries. Looking deeply at the social counteracts of other countries is really interesting because of how many different things we take for granted aren’t universal. Free speech in the US is more limited than I would like, but it gets much worse even in countries that look civilized in other ways.

FBI has no jurisdiction outside the US, so you don’t gain anything this way. Free speech in US is poorer than in most Western countries, as it fails to protect you from anything other than most government institutions. For example in US it’s fine for your employer to fire you because they don’t like what you say in your private time. Other countries provide better protection. My question is still unanswered: why woul…

https://www.fbi.gov/about/leadership-and-structure/internati...

The FBI may get involved for citizens outside the US. The international situation is complex but being or not being a US citizen can very much change FBI involvement.

PS: My question is still unanswered: why would anyone in US even think about their law enforcement invoicing the victims? It’s a concern if your considering renouncing citizenship and moving to a country where it’s a concern just as free speech should be a concern if your moving to a country without it.

Re: Wealthy people are renouncing American citizenship

#489

Post by tinyhouse » Thu, Aug 05, 2021, 5:47 PM UTC

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…

What about the benefits? You get social security wherever you live. Most countries don't pay social security to their citizens living abroad.

Re: Wealthy people are renouncing American citizenship

#490

Post by Talanes » Thu, Aug 05, 2021, 5:47 PM UTC

AnIdiotOnTheNet wrote: post #467

w0mbat wrote: post #418

Earlier quoted context omitted.

As multiple people have explained, preparing the required paperwork each year is a major expense and hassle, even if you do not owe any tax. Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid.

> Also, if you are technical enough to frequent this web site and you think $108K is a lot of money, you are being underpaid. Sorry, what? Exactly how much technical ability does it take to frequent a website? You have the strangest delusion I've seen on HN and that's saying something.

To further illustrate that point: I'm a barista.