Wealthy people are renouncing American citizenship • Hacker News Board

Re: Wealthy people are renouncing American citizenship

#61

Post by roenxi » Thu, Aug 05, 2021, 1:08 PM UTC

Wow. Eric Schmidt, Cyrpruscian. Cypricite? Cyprosii?

The real question here is what the context and amounts of money involved are. % figures in small numbers are useless, a few billion dollars means nothing to America. It isn't even clear to me that this is evidence the "people will stay, even if taxes rise!" crowd have to admit a mistake.

And the US has declared a War Against American Citizens Investing in Foreign Countries. The restrictions Americans face on opening a foreign bank account are quite stunning from what rumours I've heard.

Re: Wealthy people are renouncing American citizenship

#62

Post by mrow84 » Thu, Aug 05, 2021, 1:09 PM UTC

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).

Consider two scenarios:

a) Undeveloped land is freely available, and anyone who wants to can go and cultivate it independently from anyone else, making a life entirely for themselves.

b) All land is already owned, and making a living must be achieved by exchanging (typically labour) with others.

Do you believe that people starting without capital in scenario b) will enter into contracts as freely as those starting without capital in scenario a)?

Re: Wealthy people are renouncing American citizenship

#63

Post by circular_logic » Thu, Aug 05, 2021, 1:09 PM UTC

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 and will be subject to capital gains tax.

- The highest capital gains tax bracket in the USA is 20% [2]

Now there will be ways this is avoided but it would seem that the IRS is trying very hard make this process unappealing

[1] https://www.expatnetwork.com/how-to-renounce-us-citizenship-...

[2] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...

Re: Wealthy people are renouncing American citizenship

#64

Post by azth » Thu, Aug 05, 2021, 1:09 PM UTC

igorkraw wrote: post #35

ninja3925 wrote: post #23

Earlier quoted context omitted.

“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).

I feel like you'd have to give some evidence for the claims you are making (voluntary, win-win, creating a company being collaborative...) as long as the US doesn't have free health care,free housing and/or some form of UBI. "Take job where you have to pee in bottles or live in squalor" doesn't seem that voluntary to me

The onus is on the person making the claim to provide the evidence. Forming a company (that doesn't work in immoral areas) is a perfectly ethical and legal way of making money.

UBI is not the only solution. Islamic countries have for over 1400 years had the Zakat system, which provides for the poor and needy.

Re: Wealthy people are renouncing American citizenship

#65

Post by Miner49er » Thu, Aug 05, 2021, 1:09 PM UTC

syops wrote: post #29

altcognito wrote: post #2

They’ve been allowed for decades to avoid paying for the infrastructure and management of the country while simultaneously holding most of the influence. “Renouncing citizenship” means they’ll give up none of the influence, lose the taxes, live how and wherever they want. The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. Faced with actual conseque…

If a person has no income or capital gains from the U.S. and doesn’t live in the U.S. shouldn’t they be exempt from paying U.S. taxes? Also, shouldn’t foreign financial institutions be exempt from reporting to the U.S. about financial activities of U.S. citizens when they are outside the U.S.? I think the answer to both questions ought to be yes. EDIT: I’m aware of the rules regarding income taxes for Americans based…

Wouldn't this create loopholes? A US citizen could leave the US to make foreign investments, then come back to the US and be exempt on taxes on this foreign investments while enjoying the benefits of being in the US and not paying their share of taxes.

Re: Wealthy people are renouncing American citizenship

#66

Post by FabHK » Thu, Aug 05, 2021, 1:09 PM UTC

syops wrote: post #29

altcognito wrote: post #2

They’ve been allowed for decades to avoid paying for the infrastructure and management of the country while simultaneously holding most of the influence. “Renouncing citizenship” means they’ll give up none of the influence, lose the taxes, live how and wherever they want. The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. Faced with actual conseque…

If a person has no income or capital gains from the U.S. and doesn’t live in the U.S. shouldn’t they be exempt from paying U.S. taxes? Also, shouldn’t foreign financial institutions be exempt from reporting to the U.S. about financial activities of U.S. citizens when they are outside the U.S.? I think the answer to both questions ought to be yes. EDIT: I’m aware of the rules regarding income taxes for Americans based…

As the article mentions, the USA and Eritrea tax based on citizenship, not residence.

Re: Wealthy people are renouncing American citizenship

#67

Post by cpursley » Thu, Aug 05, 2021, 1:09 PM UTC

fourthwaveska wrote: post #44

By most western standards my family teeters on the line between middle and upper middle clas. We sold all of our US property last year; and now we are shopping for 4-6 unit buildings within 100km of Barcelona to get our Golden Visas. Our goal is to get citizenship and access to the EU then renouncing my US citizenship. It isnt about money, I am juwt ashamed to have an American passport and know my tax dollars are bei…

Spanish tax and legal system is a nightmare. Have you looked at Portugal?

Re: Wealthy people are renouncing American citizenship

#68

Post by engineer_22 » Thu, Aug 05, 2021, 1:11 PM UTC

igorkraw wrote: post #35

ninja3925 wrote: post #23

Earlier quoted context omitted.

“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).

I feel like you'd have to give some evidence for the claims you are making (voluntary, win-win, creating a company being collaborative...) as long as the US doesn't have free health care,free housing and/or some form of UBI. "Take job where you have to pee in bottles or live in squalor" doesn't seem that voluntary to me

There are many places in the United States that have free healthcare, free or reduced price housing, and assistance payments for the poor and sick or injured. These things are paid for with public money through government programs.

Personally I think everyone deserves a certain level of dignity, especially when they're going through hard times. But I've also seen plenty of examples of people who "work the system", which makes it harder to get funding for social welfare programs.

Re: Wealthy people are renouncing American citizenship

#69

Post by papito » Thu, Aug 05, 2021, 1:11 PM UTC

engineer_22 wrote: post #57

papito wrote: post #9

From the bottom of my heart, fuck off . If you get blackmailed, abducted, squeezed or raided in any way, the U.S. will have the privilege of not caring. These tools accumulated massive wealth by corrupting the U.S. political system, gutting the IRS, and bringing their effective tax rate lower than most other citizens' - and it is still not enough. I guess it's a tall order to ask to keep your grubby paws away and not…

These are people with a few million in assets. Enough to retire comfortably. These are not the "Power Elite". At least, there is no evidence that these people are "Ultra-Wealthy", only that they have reached a certain threshold that the US Govt keeps track of them. And it's peaked at around 7,000 persons per year. Hardly a tidal wave of capital flight. Have you considered that this story was titled in such a way to e…

I forgot I was on HN. Before we start discussing white papers on how emotionally gullible consumers of information can be, let's look at the article, shall we?

"There are probably 20,000 or 30,000 people who want to do this, but they can’t get the appointment".

And

"A lot of people who take this drastic step are tech zillionaires: Eric Schmidt, the former Alphabet CEO, has applied to become a citizen of Cyprus."

Re: Wealthy people are renouncing American citizenship

#70

Post by tazjin » Thu, Aug 05, 2021, 1:11 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…

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

I believe Eritrea does this, too. They don't have as much political power as the US though, so they resort to torturing your remaining family members in the country to get you to comply.