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Wealthy people are renouncing American citizenship

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Re: Wealthy people are renouncing American citizenship

#661

Post by BeetleB »

pacomerh wrote: post #633
BeetleB wrote: post #525

Earlier quoted context omitted.

If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a ba…

I don't understand how the IRS can know what you do in foreign banks

The IRS requires you to report all bank accounts you have in foreign countries when you file taxes:

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

> FATCA also requires such persons to report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR')

What's ridiculous is that it also "requires" foreign banks to report details of accounts by US holders - even if the bank has no relation to the US.

Re: Wealthy people are renouncing American citizenship

#662

Post by srswtf123 »

ninja3925 wrote: post #23
amcoastal wrote: post #3

Its really a great system we have here --- get insanely wealthy off the backs of Americans who pay tons more for basic services and then when it's time to pay back run off and keep your change. No wonder America is doing so well.

“Off the back” sounds like the wealthy took advantage of folks when, in fact, they entered voluntary contracts in a win-win scenario. Creating a company is not exploitative but rather collaborative and mutually beneficial (with workers).

It isn't voluntary when its the only game in town. My personal experience tells me the nature of work in the US is exploitative. Of course, experiences will vary, but I've never felt alone in this; on the contrary, in the Midwest "Living the Dream" is essentially shorthand for "I hate my job and everything about it". We're all living the dream, and boy does it suck.

Re: Wealthy people are renouncing American citizenship

#663

Post by maxerickson »

ljf wrote: post #588
madengr wrote: post #421

Earlier quoted context omitted.

As a US citizen, you are less likely to be tortured in a foreign prison. This book is a good read: https://en.m.wikipedia.org/wiki/Operation_Acid_Gambit

(you seem to have been shadow banned, might be working asking dang why - I couldn't see anything in your history from a mod)

https://news.ycombinator.com/item?id=23559004

Re: Wealthy people are renouncing American citizenship

#664

Post by throwaway287391 »

lozenge wrote: post #619
throwaway287391 wrote: post #567

Earlier quoted context omitted.

> 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 qualif…

Right, that makes sense. Thanks for the answer.

> 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.

Is it really so clear cut? I'm thinking of things like programming competitions -- in a sense you "work" to win a prize at one of those, don't you? So then what stops my employer calling all of my work as a programmer a programming competition? You could say "the competition organizers can't profit off of the work", but is that always true? Netflix could've legally profited off of the entries in the Netflix competition (even though they didn't), right? Similar for Kaggle contests. Would prizes from those count as taxable income? And even on something like a game show, they're profiting (or hoping to) from your participation/appearance.

Re: Wealthy people are renouncing American citizenship

#665

Post by ElFitz »

pacomerh wrote: post #633
BeetleB wrote: post #525

Earlier quoted context omitted.

If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a ba…

I don't understand how the IRS can know what you do in foreign banks

Because they apparently require foreign banks to report it.

Now, how do they actually enforce that supposed "obligation"? I do not know.

But it doesn’t surprise me. The US has already enforced it’s laws on foreign companies' dealing abroad merely because they had used dollars in their transactions.

Re: Wealthy people are renouncing American citizenship

#666

Post by mixmastamyk »

pacomerh wrote: post #633
BeetleB wrote: post #525

Earlier quoted context omitted.

If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a ba…

I don't understand how the IRS can know what you do in foreign banks

It generally doesn't, but the law says you have to tell it or face prison time.

And there are some instances of information sharing via tax treaty, but I haven't seen exact details on how it works.

Re: Wealthy people are renouncing American citizenship

#667

Post by sokoloff »

AdrianB1 wrote: post #657
sokoloff wrote: post #370

Earlier quoted context omitted.

Eritrea imposes a global tax as well.

How is this relevant, is Eritrea one of the great countries on this planet?

It corrects the erroneous statement “The U.S. is the only country in the world that imposes global tax.”

Re: Wealthy people are renouncing American citizenship

#668

Post by throwaway287391 »

AdrianB1 wrote: post #655
throwaway287391 wrote: post #567

Earlier quoted context omitted.

> 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…

My company frequently has campaigns with prizes: we pay the taxes, so the prize looks "tax free" to the winners. It is just where the tax and paperwork burden is placed, on the payer or on the winner.

Is it taxed at (average?) income tax rates or VAT rates or what? Unless it's taxed at the highest marginal income tax rate, it seems like there's still at least some loophole potential.

Re: Wealthy people are renouncing American citizenship

#669

Post by ElFitz »

w0mbat wrote: post #418
emodendroket wrote: post #319

Earlier quoted context omitted.

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.

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.

Most software engineers in Europe, aside from freelancers, and probably the world, don’t make anywhere near $108k.

Re: Wealthy people are renouncing American citizenship

#670

Post by [deleted] »

emodendroket wrote: post #506
jandrewrogers wrote: post #452

Earlier quoted context omitted.

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 e…

Many people earn a lot more than that. I agree. Where I disagree is that I don't see what's unjust about asking them to pay tax for a system they benefit from.

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