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U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

nytimes.com

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Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#101

Post by gozur88 »

colechristensen wrote: post #26
sschueller wrote: post #13

Earlier quoted context omitted.

And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…

The fist $100,000 income isn't taxed this way[1]. And it's not abhorrent. If you earned enough money to think it's advantageous to lose one of the most valuable passports in the world, you probably earned that money in large parts due to the support of the people and infrastructure of the United States. You don't get to drop your duties once you win big. [1] $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015

The problem is according to US law you still have to pay US income taxes for ten years after you renounce your citizenship. Not to mention the fact that you paid taxes for "the support of the people and infrastructure of the United States" when you lived there.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#102

Post by nieksand »

mtviewdave wrote: post #97
philiphodgen wrote: post #21

For those of you starting companies that may one day be worth a lot of money, there is a key insight to draw from this: it is better (from a tax point of view) to be a foreign company than a US company. This is especially true if you expect most of your future customers to be outside the US. In the long run this gives an operating advantage to foreign corporations -- again for tax efficiency only. In the intermediate…

For those of you starting companies now, probably the last thing you should be optimizing for is the amount of corporate tax your company will be paying after it becomes a unicorn.

I'm not sure this is true.

Many decisions you make today can be changed/fixed-up later. The company I'm at started as a WA LLC before re-incorporating as a Delaware C-corp and taking a $9.2M A-round. Bit of cost and hassle but not the end of the world. We've adjusted the structure of our engineering org several times both as our situation changed and as we learned what worked for us. Again, changeable.

However, if you choose to incorporate in the USA you may end up with a permanent, unfixable disadvantage relative to your international competitors. The political left seems hell-bent on both keeping world-wide taxation and bringing in Hotel California style rules.

This does not apply to just unicorns. Even a mid-size corp with a large international presence is impacted.

You can ignore all this if your goal is to stay both small and domestic. But an organization like Y-combinator which can spread the legal cost/overhead across its cohort? It would be something worth giving serious thought.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#103

Post by sliverstorm »

adventured wrote: post #52
tdaltonc wrote: post #31

Can someone explain the history of the US worldwide tax regime? Why is the US so out of step with the rest of the world on this?

Here: http://blogs.wsj.com/washwire/2012/05/18/tax-history-why-u-s... And [pdf file]: http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=... tldr; it's a century old patch-work remnant from the Civil War to WW1 era. The US Government at this point does not want to give it up, because it means giving up tax revenue (and thus has implications for how much they can spend), and there's nothing they hate more.

It's not clear why it would really need to change.

People who have left the United States and will never return, chose to renounce their citizenship because of it. ... Ok, so?

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#104

Post by BurningFrog »

colechristensen wrote: post #26
sschueller wrote: post #13

Earlier quoted context omitted.

And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…

The fist $100,000 income isn't taxed this way[1]. And it's not abhorrent. If you earned enough money to think it's advantageous to lose one of the most valuable passports in the world, you probably earned that money in large parts due to the support of the people and infrastructure of the United States. You don't get to drop your duties once you win big. [1] $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015

If it's such a common sense rule, how come no other country does it?

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#105

Post by caseydurfee »

AnthonyMouse wrote: post #63
jaredklewis wrote: post #47

Earlier quoted context omitted.

While I agree, there are a lot of problems with the tax system for ex-pats, and I would love some reform being an ex-pat myself, it's not clear to me why citizens shouldn't be double taxed. Sure, for some things (national funding for roads, schools, etc...), ex-pats may receive no benefit. But 53% of US discretionary spending is military spending. In what way does the US military provide more service to resident citi…

> discretionary spending "Discretionary spending" is a term the left made up to lie about how much of the budget is things they want. Things they want are non-discretionary, other things are discretionary. It's political newspeak, not a comprehensible way to measure the government budget.

Incorrect, it has a perfectly precise legal meaning. Discretionary spending is government spending allocated through an appropriations bill. It's useful to distinguish between entitlement programs and non-entitlement programs.

Where did you get the idea it was simply "political newspeak"? Perhaps you should reassess the value of your contributions to these types of discussions in light of your demonstrated ignorance here.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#106

Post by brobinson »

gozur88 wrote: post #101
colechristensen wrote: post #26

Earlier quoted context omitted.

The fist $100,000 income isn't taxed this way[1]. And it's not abhorrent. If you earned enough money to think it's advantageous to lose one of the most valuable passports in the world, you probably earned that money in large parts due to the support of the people and infrastructure of the United States. You don't get to drop your duties once you win big. [1] $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015

The problem is according to US law you still have to pay US income taxes for ten years after you renounce your citizenship. Not to mention the fact that you paid taxes for "the support of the people and infrastructure of the United States" when you lived there.

>you still have to pay US income taxes for ten years after you renounce your citizenship

Do you have a source for this? I've never heard about it.

All I know is they make sure your last N years of taxes are in order, charge you expatriation tax (if required), and ensure you have no unpaid federal student loans.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#107

Post by dang »

easytiger wrote: post #34
colechristensen wrote: post #26

Earlier quoted context omitted.

The fist $100,000 income isn't taxed this way[1]. And it's not abhorrent. If you earned enough money to think it's advantageous to lose one of the most valuable passports in the world, you probably earned that money in large parts due to the support of the people and infrastructure of the United States. You don't get to drop your duties once you win big. [1] $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015

Well, you are a conceited jingoist if ever i saw one.

Personal attacks are not allowed on Hacker News, regardless of how wrong a person is. We ban accounts that do this, so please don't do this.

The idea here is to post civilly and substantively, or not at all. You might (re-)read the guidelines:

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#108

Post by slyall »

st3v3r wrote: post #93
sschueller wrote: post #13

Earlier quoted context omitted.

And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…

"And the US double taxes their citizens living abroad the same way." Except they don't. You have an exemption for foreign income. "It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes." I don't believe this for a second. You would be a US Citizen, therefore you would have stepped foot in US territory.

> "And the US double taxes their citizens living abroad the same way."

> Except they don't. You have an exemption for foreign income.

Because all the other 20 year olds working part-time at Starbucks employee the best accountant in town for a few hours per year to do their taxes.

> "It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes."

> I don't believe this for a second. You would be a US Citizen, therefore you would have stepped foot in US territory.

Ever hear of a guy called Ted Cruz?

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#109

Post by rgbrenner »

st3v3r wrote: post #93
sschueller wrote: post #13

Earlier quoted context omitted.

And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…

"And the US double taxes their citizens living abroad the same way." Except they don't. You have an exemption for foreign income. "It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes." I don't believe this for a second. You would be a US Citizen, therefore you would have stepped foot in US territory.

children of us citizens born abroad are still citizens at birth. so it is possible to be a us citizen while never setting foot on us territory.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#110

Post by fapjacks »

malchow wrote: post #80
vinceguidry wrote: post #50

Earlier quoted context omitted.

It's only as mobile as laws will allow it to be. Sure, it's a leaky bucket, but you don't need to patch all the leaks.

Capital is fully mobile because people are fully mobile.

Ever try to take twenty thousand in cash through airport security? Here's a secret: Those millimeter wave body scanners are only incidentally for drugs and weapons.
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