Are Taxes Causing the Rich to Renounce Their Citizenship?

The Wall Street Journal ^ | Jun 13, 2011 | Robert Frank

[arderkrag]

According to the latest Internal Revenue Service report, the number of Americans renouncing their U.S. citizenship (or terminating their long-term permanent residency) has increased nearly ninefold since 2008.

In the first quarter alone, 499 Americans expatriated through the IRS, meaning they probably won’t have to pay U.S. taxes anymore, according to data that first appeared on Andrew Mitchel’s International Tax Blog. That compares with a quarterly average of 384 in 2010. And 2010 marked a significant jump from 2009 and 2008, with quarterly averages of 186 and 58, respectively.

-----SNIP----- One argument is that they are leaving because of President Obama and the nation’s leaders.

“There is growing concern, particularly among the wealthy, about the future financial direction of the country,” said Paul L. Caron, Charles Hartsock Professor of Law at the University of Cincinnati College of Law. “This President constantly demonizes the wealthy, who undoubtedly are concerned about the tax policy that would emerge in 2012 if a re-elected Barack Obama, unconstrained by re-election concerns, finally confronts the budgetary train wreck that he has done so much to exacerbate.”

[arderkrag]

Rats, sinking ship.

[rokkitapps]

If they make America enough of a dump, why wouldn’t the rich just move elsewhere? The elite can pay their way back in for whatever reason they need to return.

[ilovesarah2012]

Is Obama causing Americans to renounce their citizenships?

[TGIAO]

Not to worry, we have all those new immigrants that will more than make up for any taxes lost. </s>

Why else would administrations from both parties continue to allow the policy that have created our current situation?

[God luvs America]

i think its loathsome when people do this- then again you reap what you sow...it was the super rich that wanted zero to win in ‘08...

[ansel12]

I would like to see the biographies of those people renouncing their citizenship, my guess is that outside of wealth, they might not be what we would call the cream of the crop, or the kind of people that we might form deep, respectful friendships with.

[DonaldC]

Since we are the least socialized of 1st world countries, where are the rich going?

[dools0007world]

Atlas is shrugging. Next up will be a very steep fed tax (penalty) for leaving. NJ and some other states already extorting people who move out of the state.

[FrankR]

Atlas started to shrug...

[arderkrag]

Yes, the least socialized, but our tax system is retarded. If I was a billionaire, and less attached to this country, I’d probably jump ship for either Australia or some island country. Yeh, I’d be giving up a lot, but if I get psuedo-consistency from a government in return, it might be worth it.

[SAJ]

An interesting proposition, but I don't believe that that is an accurate description, generally. Some of the people who are expatriating are FReepers, for example.

I know of another expatriate who left because an administrative court effectively confiscated his business via a disgustingly arbitrary ruling. He's now running the same type of business in Costa Rica, and is as nice a guy as you'd care to meet.

[no-to-illegals]

I have a family member thinking of doing this. Thought (by family member) is the IRS comes after a flunky (family member description of self for owing less than $5,000) and the big guys in the zer0 administration and Congress get off and continue their lies, corruption and tax evasion. This family member left the U.S., and I miss them. Family member is ex-Military and said it was best they left instead of fighting the system. Wish I could have paid for them to stay, yet job disappeared and only offer came from out of the country, thus off to another country they (family member) traveled. Life under the lies, and corruption of the people in D.C. has caused little good to no good over the past thirty plus years for our nation ... imho

[antiRepublicrat]

In the first quarter alone, 499 Americans expatriated through the IRS, meaning they probably won’t have to pay U.S. taxes anymore

If the IRS thinks you moved to avoid taxes, they will still come after you. It's only a matter of enforcement where you're now living, but don't dare set foot back in the US or an extradition-friendly country.

[DannyTN]

1. Of the 499 that expatriated, how many were super-wealthy?
2. How many had foreign born wives, and thus were probably leaving for non-financial reasons.
3. How many rich people immigrated to the U.S.?

[from occupied ga]

“There is growing concern, particularly among the wealthy, about the future financial direction of the country,” said Paul L. Caron,

Does not equal rats, sinking ship.

If the country is screwing the rich they have no obligation to stay there and continue to be screwed. The biggest problem is finding an alternative country that will rob them less.

The government is SUPPOSED to be our servant, NOT our master. But when you end up with the bulk of the fruits of your labor going to support government with nothing to show for it except people whom you wouldn't give a penny to on your own getting your money, then government is the master and you are the slave.

[OldNewYork]

“Atlas is shrugging. Next up will be a very steep fed tax (penalty) for leaving.”

There already is, but people still think it’s worthwhile paying. The numbers leaving would be even higher if there weren’t an additional penalty imposed by the government. There was an article about this a few weeks back in the New York Times or Wall Street Journal.

[from occupied ga]

NJ and some other states already extorting people who move out of the state.

Hadn't heard about this. What are they doing?

[max americana]

here in Hollywood, I know a lot of foreign actors who use a specific visa as an entertainer and because they came from socialist countries, they think the tax rates here are “miraculous” when to us, it’s very atrocious.

On the other hand, I know an immigration lawyer who is in my circle who caters to the Philippine crowd (and his client is Manny Pacquiao of all people), he said there is an “investor visa” wherein you just come to the US and invest your money without relinquishing your own citizenship, but you will have to pay taxes because this is your base. But he also has clients on his tax department that have made Panama their base that the IRS is having trouble going there and inquiring about clients activities. BTW, Panama is where a majority of warez and host filing accounts are based.

[Solitar]

ATLASes SHRUGGING

[1rudeboy]

I believe the IRS is entitled to assume that you renounced in order to avoid paying taxes, and I think they keep you on the hook for ten years (after you renounce citizenship).