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Wealthy people are renouncing American citizenship

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Re: Wealthy people are renouncing American citizenship

#611

Post by mellavora »

mywittyname wrote: post #459
fmajid wrote: post #193

Earlier quoted context omitted.

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.

I assume you mean a business bank account for the banking?

Challenging, and potentially criminal.

If you have any management authority over the bank accounts owned by the business, then those accounts fall under FACTA.

Hell, if you are even just an employee, but can sign on the bank account, then you have to report it to the US authorities.

So a 'business account' doesn't get you out of the US required reporting.

Also, the implication is that you'd use this for 'day to day' banking. Using a business's funds (a business bank account) to cover personal spending is typically criminal (embezzlement).

So not a solution.

And this doesn't solve the other problems, like pension savings or other financial products.

Re: Wealthy people are renouncing American citizenship

#612

Post by BeetleB »

jandrese wrote: post #403
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's even more expensive than that since they don't refund you the money you paid into Social Security when you renounce.

Social Security is not a pension - this is a common misconception.

The SS tax is to pay current retirees. There's a formula that states how much you'll get when you retire, but the money you're putting in now is not being saved/invested for your benefit in the future.

The short version: Money you put into SS is not your money.

Re: Wealthy people are renouncing American citizenship

#613

Post by monksy »

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…

> Basically the only country in the world that charges taxes on money you make and spend somewhere else,

Only country in the world that charges taxes on money that they have no business over.

Re: Wealthy people are renouncing American citizenship

#614

Post by greyhair »

PragmaticPulp wrote: post #94
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…

> 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.…

Commonly called "click bait"

Re: Wealthy people are renouncing American citizenship

#615

Post by jarl-ragnar »

rejectedandsad wrote: post #553
jarl-ragnar wrote: post #548

Earlier quoted context omitted.

There’s an irony in there somewhere given the original motivation for the “Boston Tea Party”. No taxation without representation.

Americans can vote overseas though

I know. I was referring to the comment about not feeling represented.

Re: Wealthy people are renouncing American citizenship

#616

Post by naniwaduni »

robin_reala wrote: post #590
randomchars wrote: post #575

Earlier quoted context omitted.

Hungary does not tax it's citizens living abroad.

I was going by the table at https://en.wikipedia.org/wiki/International_taxation#Individ... but it’s entirely possible that it’s incorrect.

It looks like Hungary technically taxes nonresident citizens except in almost every case where it would matter.

Re: Wealthy people are renouncing American citizenship

#617

Post by mellavora »

erikw wrote: post #517
mywittyname wrote: post #459

Earlier quoted context omitted.

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

Unfortunately if you have equity in the business, you'll get taxed. However, if you are only an employee, you get an exemption on something like $150,000 of income, housing, and other expenses. So as a US citizen, you can avoid taxes only by living outside the US, and being an employee of a non-US company. If anyone knows otherwise, please correct me as I'd greatly benefit!

nitpicking. You don't get out of taxes, you get out of paying US taxes (on earned income, you still have to pay capital gains).

But you still have to file US taxes. As an expat, you have more forms to fill out.

AND the bigger challenges are banking. You still have to find a bank willing to open an account for you, and good luck getting more complex financial services.

Re: Wealthy people are renouncing American citizenship

#618

Post by emodendroket »

ElFitz wrote: post #607
emodendroket wrote: post #465

Earlier quoted context omitted.

Why would that be pointless?

Mostly because the gap in international political reach and leverage, respective economic situations and means are too huge for there to be a point. Also because I suspect the population here to likely be mostly from Western countries. Cf dang’s comment[1] stating that 50% of the userbase is from the US [1]: https://news.ycombinator.com/item?id=25787770

Will I think it is relevant because the fact that the passport holder benefits from all that makes it one of the best by any reasonable standard, unless you arbitrarily ignore all the worse ones and then say it's the "worst of the best," so to speak.

Re: Wealthy people are renouncing American citizenship

#619

Post by lozenge »

throwaway287391 wrote: post #567
academia_hack wrote: post #509

Earlier quoted context omitted.

Some years are fine, just subtract the earned income exemption and move on. Others are nightmares. Unlike in America, where there are accountants lurking around every corner, the tax code here is very "simple" (the vast majority of people probably never fill out a tax return in their lives). This means accountants charge like you're some sort of multi-millionaire business owner (since that's who their clients typical…

> Prizes are tax-free here Off-topic but: this always seemed like the most bizarre thing to me. What's the rationale? Why do governments want to incentivize people winning "prizes" over "honest work"? (My HN engineer brain also wants to know what the distinction is that prevents companies from calling any payment for a one-time contract a "prize" for completing the work, but I'm sure there's some unsatisfying "you kn…

I can answer for the UK - the system is designed so that most people don't explicitly interact with the tax system. The only people that need to do so is the self-employed, running a business, or very highest earners. For everybody else, they can take advantage of tax breaks without filling in any forms, just by opening the right bank accounts/pensions or getting certain services from their employer. When they qualify for benefits, like Child Benefit, it gets paid separately into their bank account.

A surprising number of tax benefits are possible this way - even the income tax deduction on charitable giving is done by getting the charity to do the paperwork instead of the individual taxpayer.

So when it comes to taxing something that isn't going to be a significant tax stream and would require people to fill in declarations, the solution is-- just don't tax it.

And the answer to your second question is, the payment would be "income" (defined as payment for completing work) and would fall under income tax. There's no exception in income tax for prizes because prizes aren't even income at all, as you don't work for them. But if you still tried it, it would fall under the General Anti-Abuse Rule.

Re: Wealthy people are renouncing American citizenship

#620

Post by throwaway5372 »

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…

As someone who meets the third condition (one parent a US citizen and lived there for more than 5 years), it was really hard to convince the US that I was a US citizen. Every one I talked to told me to go to a country I hadn't been in since I was 5 and apply for citizenship through family sponsorship. This was more than 20 years ago and no one threatened to deport me.

After trying to get citizenship without leaving the country for about a year, I went to the post office and applied for a passport again, with every document that could possibly be relevant. The post office person looked through my pile of documents, declared my mother's passport good enough, stuffed it in the envelope, and a passport came in the mail for me. I think you may have explained to me how that worked out.

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