4 ms·

>At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium Unlike many countries, US citizens can't escape US

>At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium Unlike many countries, US citizens can't escape US income tax by moving out of the country, income tax must be paid regardless of the geographic source of income.

GhettoMaestro 7y ago
Unless you renounce your US citizenship.
- mancerayder 7y ago
  Isn't there a several year lead time before your tax reporting requirements are no longer the case?
  - GhettoMaestro 7y ago
    I believe your are still liable for the year you renounce. I am not an expert of any type in this area, to be clear.
- littlestymaar 7y ago
  In which case you need a Visa to travel to the US, and you lose the network of powerful embassies all over the world and so on. That's not the greatest deal.
  - Tharkun 7y ago
    When, if ever, does a normal person need access to a network of powerful embassies all over the world?
    - littlestymaar 7y ago
      When travelling, if you get into any kind of troubles: from casual ones like «my wallet was stolen I don't have any papers now», to «corrupt cops are trying to racket me» or «I had a car accident and the locals want me to pay for everything because I'm rich». All the examples above are things that happened to people of my family / close friend in the past few years, and the (French) embassy/consulate helped a lot each times.
ch4s3 7y ago
I don't have much to say about this issue either way, but it's not as ironclad as you make it seem. It's less trivial but people can and do renounce their US citizenship. It can be expensive, but probably not 2%-6% of you net worth in perpetuity expensive. Now, you will have to find a new flag of convenience, but you can do that from probably somewhere b/t 500K and 1.5 million in a desirable locale.
- dialtone 7y ago
  renouncing citizenship comes with an exit tax of 23.8% of your assets. https://1040abroad.com/faq/renouncing-u-s-citizenship/ https://1040abroad.com/faq/renouncing-u-s-citizenship/
- pmoriarty 7y ago
  The last time I checked, which was admittedly a long time ago, if you have a net worth of over $100k when you renounce your US citizenship, it is assumed you are doing so for tax evasion purposes and you will be continued to be taxed for the next ten years.
kube-system 7y ago
Well, some citizens can, but the rich can't. The Foreign Earned Income Exclusion exempts the first $105,900* of income. *https://www.irs.gov/pub/irs-pdf/f2555.pdf https://www.irs.gov/pub/irs-pdf/f2555.pdf
- mcgoo 7y ago
  IIRC, the fine for not filing a FATCA report is $100k. I’d guess anyone above a certain threshold risks having to pay the fine rather than declaring their accounts.
Tharkun 7y ago
As a Belgian, it's very surprising to read that Germans would consider moving here to avoid taxes. We're pretty much taxed to death. Though most of our taxes are income taxes (up to 50% + ~13% national insurance contributions) and VAT (21%). There isn't much in terms of wealth taxes.

GhettoMaestro 7y ago

Unless you renounce your US citizenship.

mancerayder 7y ago
Isn't there a several year lead time before your tax reporting requirements are no longer the case?
- GhettoMaestro 7y ago
  I believe your are still liable for the year you renounce. I am not an expert of any type in this area, to be clear.
littlestymaar 7y ago
In which case you need a Visa to travel to the US, and you lose the network of powerful embassies all over the world and so on. That's not the greatest deal.
- Tharkun 7y ago
  When, if ever, does a normal person need access to a network of powerful embassies all over the world?
  - littlestymaar 7y ago
    When travelling, if you get into any kind of troubles: from casual ones like «my wallet was stolen I don't have any papers now», to «corrupt cops are trying to racket me» or «I had a car accident and the locals want me to pay for everything because I'm rich». All the examples above are things that happened to people of my family / close friend in the past few years, and the (French) embassy/consulate helped a lot each times.

ch4s3 7y ago

I don't have much to say about this issue either way, but it's not as ironclad as you make it seem. It's less trivial but people can and do renounce their US citizenship. It can be expensive, but probably not 2%-6% of you net worth in perpetuity expensive. Now, you will have to find a new flag of convenience, but you can do that from probably somewhere b/t 500K and 1.5 million in a desirable locale.

dialtone 7y ago
renouncing citizenship comes with an exit tax of 23.8% of your assets. https://1040abroad.com/faq/renouncing-u-s-citizenship/ https://1040abroad.com/faq/renouncing-u-s-citizenship/
pmoriarty 7y ago
The last time I checked, which was admittedly a long time ago, if you have a net worth of over $100k when you renounce your US citizenship, it is assumed you are doing so for tax evasion purposes and you will be continued to be taxed for the next ten years.

kube-system 7y ago

Well, some citizens can, but the rich can't. The Foreign Earned Income Exclusion exempts the first $105,900* of income. *https://www.irs.gov/pub/irs-pdf/f2555.pdf https://www.irs.gov/pub/irs-pdf/f2555.pdf

mcgoo 7y ago
IIRC, the fine for not filing a FATCA report is $100k. I’d guess anyone above a certain threshold risks having to pay the fine rather than declaring their accounts.

Tharkun 7y ago

As a Belgian, it's very surprising to read that Germans would consider moving here to avoid taxes. We're pretty much taxed to death. Though most of our taxes are income taxes (up to 50% + ~13% national insurance contributions) and VAT (21%). There isn't much in terms of wealth taxes.