Posted on 01/01/2013 7:02:39 AM PST by Kaslin
HONG KONG -- We read about famous people like French film star Gerard Depardieu, who moved to Belgium to avoid a 75 percent income tax on millionaires proposed by France's Socialist government (a measure rejected last week by a French council, though French leadership has vowed to resubmit a similar proposal). Then there is Eduardo Saverin, who took the extreme step of giving up his U.S. citizenship and could see a savings of $39 million on his Facebook investment, according to the research firm Wealth-X. He says business reasons, rather than high taxes, were his primary motivation.
I had read about financially motivated expatriates but never knew one who had taken the ultimate step until I visited with my longtime friend "Sam" (I'm withholding his real name to protect his current employment). Sam works for a large investment firm. He has lived here for the last 25 years.
He says that five years ago, he began thinking he could no longer "afford to be an American." Contributing to his decision was the cost of sending his five children to college. Even though he and his wife pay taxes on a home in California, the state has denied them in-state college tuition, meaning it could cost them $50,000 per child. While there is a $95,100 earned U.S. income tax exclusion, Sam says it isn't enough to substantially reduce his U.S. taxes and still cover his costs.
Here is how burdensome U.S. tax laws have become: Seven years ago, Sam left a major investment banking firm based in the U.S. to join another international bank. The law required that his 14 years of pension savings become current income and taxed it at a rate of 35 percent. He says he could not roll over the account due to a "quirk" in the law. Hong Kong citizens are taxed at a rate of only 15 percent.
Another consideration, he says, was the refusal by Hong Kong banks to allow him to open a securities account. The reason? "None wanted to deal with onerous U.S. reporting requirements. My own bank could not even open an account for me to invest in local securities."
Sam says his decision was "emotionally difficult. My parents worried I would not be able to return to see them in the U.S. (He managed to get a 10-year tourist visa.) I would have to give up the right to vote or run for political office. I was concerned that others would call me a traitor or deserter."
"I had paid over $1 million in U.S. taxes but didn't receive any benefits, nor did my wife and kids. (She maintains her U.S. citizenship.) As I saw the massive U.S. deficit continue to climb, it became clear that the government would likely raise taxes further. I finally decided to expatriate. ... A dozen of my friends who have lived over 10 years in Asia have done the same. We can no longer afford to be American citizens."
Eugene Chow, an attorney who specializes in helping Americans give up their U.S. citizenship, told The Wall Street Journal's "Asia Today" program that while such actions continue to be rare, they are increasing. He says people pay a high price for giving up their citizenship. Not only is there an "exit tax," but all appreciated assets, including a home, are assessed a 15 percent capital gains tax, even if they haven't been sold.
Chow says, "The IRS is essentially outsourcing its compliance rules to non-American-related companies and they are saying to Americans, 'We don't want your business.' So that's more of a practical reason for why some people choose to give up their passports -- to make it a less complicated life living overseas."
While the media love to focus on billionaires, says Chow, most who renounce U.S. citizenship are "people who have changed circumstances; people ... who have lived and worked (overseas) for the last 10-15 years, who might have married a foreign spouse and who believe their future is overseas, rather than back in the U.S."
With so many foreigners wanting to become U.S. citizens, it's still a shock to know someone who has relinquished his citizenship. It is another reason for simplifying the U.S. tax code. America should want to retain people with the skills and experience of people like Sam, who have contributed more than tax money to their (now former) country.
Since aliens who reside illegally in the US are not “US Persons”, and are outside of the IRS compliance system, in that there is no way to enforce any reporting requirements on them, and because the present regime has declared its policy of not deporting illegal aliens who commit minor crimes, I am seeking to become an illegal alien in the land of my birth.
Because the US presumes the power to force me to report and pay taxes on income I earn outside of the US (unlike almost evey other country) it seems that is the only way I can be free of this particular tyranny.
Our poor-mouth government might be able to garner extra (sarc/) revenue if they made those 40-some percent who don’t pay taxes, pay them. The only ones who suffer is the middle class...we have to cover for both sides of the aisle = from the “poor” who pay no (or not much) taxes to the “rich” who know how to hide their wealth.
But as an aside, rumor has it that revenue is NOT the problem, spending is. Who’da thunk? UGH!
My husbands ex business partner is leaving the US. He’s 65 so I’m assuming it’s permanent. I certainly felt a bit envious because I see this country as a sinking ship, like Weimer Republic Germany.
Giving up your US citizenship isn’t difficult.All you have to do is prove that you have another citizenship (many Americans are entitled to another citizenship) and go to a US Embassy/Consulate abroad and follow the simple steps.If you’re gonna do it for tax purposes you’d be wise to get all you assets out of the country first so the IRS can’t get their filthy hands on it.
People who turn against their own country cannot be trusted by anyone.
I am a naturalized citizen. I am an American, not a German-American
That's good.I greatly admire your attitude.So many people,both those born here and elsewhere,insist on being "hyphenated" Americans.However,for the sake of *this* discussion it's possible that Germany still considers you a citizen.Such laws vary from country to country.I know that under Irish law *I'm* entitled to Irish citizenship by way of ancestry.I haven't filled out the necessary forms so I'm technically not considered a citizen at this time but that's just one example of what I was saying earlier.
And if your country turned against you first what do you do? It sounds like,in your opinion,those Jews who were smart enough and lucky enough to get out of Germany in the 30's are traitors as well.Osama Obama & Friends are my sworn enemies.They despise me and I gladly return the favor.If their views are,in fact,supported by the majority of Americans then that means my country has turned against me.
It's not rocket science we're talking here.
You had your reasons why they shouldn't leave, but apparently they aren't strong enough reasons to keep these folks from seeking a better life elsewhere.
People usually act in their own best interests, usually to gain pleasure and avoid pain. Motivation rarely gets more complicated than that.
Right. And, it's not "Germany in the 30's," either.
Nobody anywhere in the world during the 30's had it as good as you do right here today in the United States. We're the luckiest people in the history of the world.
But, in the best of times and in the worst of times, people who turn on their own family, tribe or nation are generally viewed with contempt.
Yes and no. It really depends upon the country and that for which it stands.
People who turn against their values and ideals, however, cannot be trusted by anyone. Too bad we keep re-electing them!
Lovely - we're trading our educated productive for illiterate tax consumers.
Um, the government has turned against patriots, not visa versa.
Is that you Joe Biden?
Even though he and his wife pay taxes on a home in California, the state has denied them in-state college tuition
Yet they want to give illegals in-state tuition rates. Where is the incentive to become a citizen?
My own theory is that geography can't cure miserable and that this country is about as good as it gets these days.
Your statement contains a very large assumption. Perhaps you intended to make it, perhaps not.
Expatriots who've renounced - that I know of - have not "turned against their country. They would tell you that their country has turned against them.
I've not renounced and have no plans to do so, but I can assure you that my country has turned against all producers - in fact, all citizens - in fact, it:
has imposed usurious taxes without representation
has squandered the revenue that comes it
has debased our currency so that it is difficult to make it on one salary without becoming a ward of WalMart
has made us into a nation of potential terrorists that must be radiated, has circumvented the Bill of Rights
has violated our privacy through intercepting our phone calls and emails without legal justification
has ruled by fiat, instead of law
hs done away with Habeas Corpus rights, if they declare you don't qualify
has made asset forfeiture/seizure without court order or crime commonplace
has impoverished our nation through national debt that cannot be repaid
has driven business from our shores and with it, jobs
has passed so many laws, regulations and requirements by decree that no citizen knows if he is in violation of the law
AND SO MUCH MORE
The idea of America lives on, but in practice, the very foundations that created our nation and were enshrined in our Constitution are being eviscerated daily.
That some leave in pursuit of the original dream of America: freedom of opportunity, privacy, reasonable taxation, pursuit of happiness, in places where it yet lives, does not surprise me.
Nor do I condemn them for pursuing the dream of America while it grows dim here on our shores. My relatives did the same. Those who came with the Mayflower group, and those who fled totalitarianism in Europe during WWI.
AMPU
Apparently you are not even aware of how the USA was formed. Our founding fathers did not sit around a campfire and sing songs while holding hands with the British.
We haven't learned how to fix miserable yet.
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