Wealthy people are renouncing American citizenship • Hacker News Board

Re: Wealthy people are renouncing American citizenship

#651

Post by masklinn » Thu, Aug 05, 2021, 8:39 PM UTC

unishark wrote: post #507

Justsignedup wrote: post #181

Earlier quoted context omitted.

This was to close certain problematic tax avoidance issues. People were fleeting from the US to avoid paying taxes, but kept all the benefits, or hid the money off-shore. The problem here is that they never raised the amount you must report, because in the past, 150k used to be a lot. Now that should be closer to 500k. But like the minimum wage and tax brackets, they haven't kept it up with inflation. Not in the way…

Kept all what benefits? People who fled the US are now living under some other country's benefits, and pay taxes there instead. Don't citizens of (almost) every other country in the world have the ability to go live abroad and keep all their benefits, whatever they are? I'm not following where Americans can actually get away with anything special.

> Don't citizens of (almost) every other country in the world have the ability to go live abroad and keep all their benefits, whatever they are?

aren’t those benefits just the travel-ability of their passport and the right to return?

I can only guess the US is such a great country you need to pay fir the right to return?

Re: Wealthy people are renouncing American citizenship

#652

Post by masklinn » Thu, Aug 05, 2021, 8:42 PM UTC

beezle wrote: post #597

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, just because of where you were born." It is not about where you are born, it is about where you have citizenship (and possibly also residency). As long as you maintain your US citizenship you are morally obligated to contribute to the well being of the country, the biggest and easiest to understand of course is nat…

>and possibly also residency

Not that is the issue. Residency is the norm, the US is both residency and citizenship.

Re: Wealthy people are renouncing American citizenship

#653

Post by robocat » Thu, Aug 05, 2021, 8:44 PM UTC

kogepathic wrote: post #481

jontas wrote: post #265

Earlier quoted context omitted.

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. cit…

> You also cannot renounce your citizenship for tax dodging

You just pay an exit tax, which is a percentage of your total wealth. The exit tax only applies if your total wealth is over 2 million (or less than that if you haven’t been filing properly).

https://americansoverseas.org/en/knowledge-centre/us-taxes-a...

Re: Wealthy people are renouncing American citizenship

#654

Post by BeetleB » Thu, Aug 05, 2021, 8:46 PM UTC

jandrese wrote: post #625

BeetleB wrote: post #612

Earlier quoted context omitted.

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.

You still put a bunch of money into it on the promise that after retirement you will have income, and that promise is broken when you renounce your citizenship. Also, Social Security is closer to real pensions than you think, they're just different from the theoretical concept of a pension that isn't actually used outside of the Post Office.

You're using vague words like "promise". "Hope" would be more accurate. Someone can correct me, but if Congress passes a law tomorrow saying they're not going to pay social security after 2025, that is probably allowed. The only "promise" is to people who are currently retired.

Furthermore, if you renounce your citizenship, it is you who are choosing not to get this benefit. It is a defined benefit for citizens, and you are choosing not to be one.

As for similarity to pensions: Far from it. When the government has an excess (i.e. total SS taxes collected is greater than payouts for a given year), they are not allowed to hold it or invest it. Pensions are/were always invested, or at least held.

Re: Wealthy people are renouncing American citizenship

#655

Post by AdrianB1 » Thu, Aug 05, 2021, 8:48 PM UTC

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…

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.

Re: Wealthy people are renouncing American citizenship

#656

Post by emodendroket » Thu, Aug 05, 2021, 8:48 PM UTC

jandrese wrote: post #622

emodendroket wrote: post #559

Earlier quoted context omitted.

Why would they refund past taxes you'd paid?

The money you put into taxes went into national defense that kept you safe, roads you drove on, schools that provided an educated workforce that made the goods and services you consumed, etc... Money put into Social Security is just lost to you unless you are renouncing your money after retirement.

That's a rather generous assessment of how my money was used in Iraq, for instance. That sounds glib, but if you could pick and choose which things your taxes funded or not it would kind of make the whole concept of the state untenable.

Re: Wealthy people are renouncing American citizenship

#657

Post by AdrianB1 » Thu, Aug 05, 2021, 8:49 PM UTC

sokoloff wrote: post #370

kaboomman wrote: post #240

Earlier quoted context omitted.

This. Living (even partially) overseas as someone who was born in the U.S. has so many disadvantages. The U.S. is the only country in the world that imposes global tax. Not only that, taxes are really complex and cost a fortune to file if you have overseas assets. Now, add to that that I cannot sign up for many bank accounts or other financial institutions because they don't accept U.S. customers - they don't want to…

Eritrea imposes a global tax as well.

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

Re: Wealthy people are renouncing American citizenship

#658

Post by 2xpress » Thu, Aug 05, 2021, 8:49 PM UTC

simonh wrote: post #326

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.

Oh well, that's alright then. As long as it's only successful people getting screwed I suppose we're good.

Perhaps you are being sarcastic in the parent comment, but United States "screwing" its successful people and forcing them out means that these successful people will no longer contribute to United States, but to their new home country instead.

Without their contributions the Unites States will be less successful, thereby "screwing" everybody in it.

This trend within United States is especially ironic and alarming considering that United States gained its success specifically by giving home to persecuted people from other countries with capacity for success. Conversely, other countries, some obvious examples being Nazi Germany and USSR, were not successful specifically because they forced out their successful people.

Re: Wealthy people are renouncing American citizenship

#659

Post by emodendroket » Thu, Aug 05, 2021, 8:50 PM UTC

AdrianB1 wrote: post #650

emodendroket wrote: post #565

Earlier quoted context omitted.

Does the country where they live run the embassy too and I just never knew about it?

They should not pay taxes in full to get 1% of the benefits.

Why not? I could just as well say that someone making $50k in Arkansas shouldn't have to subsidize consular services for someone making a quarter million a year abroad. They're not really paying "full price" either given the large exemption.

Re: Wealthy people are renouncing American citizenship

#660

Post by AniseAbyss » Thu, Aug 05, 2021, 8:51 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…

Always amused me how every financial service the world over asks if you're a US citizen and denies you if you answer YES. Nobody wants to deal with the IRS.