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Wealthy people are renouncing American citizenship

• altcognito 5y ago
  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 consequences and true separation from the actual thing they care about (their source of wealth, not the country) they will reconsider. I’m not sure if this is a net plus, as they are a selfish lot.
  • alephnan 5y ago
    > while simultaneously holding most of the influence. There are 20 million millionaires in the states. This is not even 10,000 people year over year with assets, not even net worth, over $2 million. This is a tiny fraction of the population, most of whom are contrarian or pursue an alternative lifestyle, given that they are living abroad. I would hardly call someone with $2 million as having outsized influenced, they're barely upper middle class or be able to afford a house in San Francisco. If we assume this distribution obey a power-law, there are a small percentage of individuals here there who are ultra ultra wealthy to have that influence. There are ideological reasons to renounce citizenship, and maybe having a small amount of wealth enables to pursue this option as it involves legal fees and also affordance of living off investment income. There are likely many poor people who would like to leave to, but don't have the financial means to. The data set will be biased towards those who can afford the process. Furthermore, renouncement of citizenship involves exit taxes, on which people have already paid taxes. > The best thing to do is forbid them re-entry into the country On what legal grounds? They can't enter on a tourist visa? To visit a dying friend or family member one last time? > nor to hold controlling interest in any company in the US. Then we should stop all foreign investments and investors.
    • peterbonney 5y ago
      $2 million is the minimum to be listed - it is not the median, let alone the mean. Eric Schmidt alone has wealth equivalent to 10,000 people with a “mere” $2 million.
      • alephnan 5y ago
        Yes, for every 10,000 millionaires we have a few Eric Schmidts. There are still hundreds of billionaires in the states, and they can still access tax havens regardless of renouncing citizenship.
    • catillac 5y ago
      This is a fair point
      • alephnan 5y ago
        Hence, my point about the power-law / exponential distribution. Take the logarithm of the number of people who renounce citizenship and you will have the number of people with outsized influence.
    • aabaker99 5y ago
      Unless there are more than 20 million millionaires, you're talking about the top 6 percent of the wealth distribution. I wouldn't call that particular percentile "barely middle class". That term probably should be reserved for the 60th percentile, no? Middle being 60 to 40? 70 to 30? Edit: fixed my percentile thanks to child comment!
      • pedrosorio 5y ago
        > Unless there are more than 20 million millionaires, you're talking about the top 0.6 percent of the wealth distribution 6 percent
        • adventured 5y ago
  • nxmnxm99 5y ago
    It's probably pointless to discuss this with someone who insists on generalizing anyone above a certain net worth as being selfish, but - As it turns out, it's no longer the 80s, and there are increasingly multiple other countries were the super-rich can move their activities, wealth and lifestyle to without missing a beat. Hanging around financial circles, I've seen a large exodus of people through the pandemic star the process of moving pieces towards places like Dubai and Singapore.
    • ren_engineer 5y ago
      the point is that generally there is some expectation of loyalty to the country that allowed you to become super-rich in the first place. In finance specifically many of these people participated in outsourcing a huge chunk of the American economy for short term profit and their own gain and are now abandoning ship abandoning your country for lower taxes so you can "live your lifestyle without missing a beat" is disgusting to most humans. The wealthy have abandoned any sense of duty to their fellow citizens and are somehow shocked people are angry about the situation
      • cpursley 5y ago
        The wealthy in America cover the bulk of the tax revenue collected if the IRS stats are to be trusted.
        • luffapi 5y ago
          The wealthy pay far less in taxes in proportion to their wealth than everyone else. Long term capital gains is only 10%. The wealthy are only wealthy because the non-wealthy people who vastly outnumber the wealthy, allow them to keep their capital. I think massive wealth inequality is making a significant number of people rethink this generous position.
          • Chris2048 5y ago
            > Long term capital gains is only 10% But it has yet to be taxed as income. Even if it doesn't devalue, you can't use it until you dispose of it, incurring additional tax. > The wealthy are only wealthy because the non-wealthy people who vastly outnumber the wealthy, allow them to keep their capital. The wealthy can afford better weaponry than you. Are you alive only because they allow you to live? > rethink this generous position Do you think you are entitled to something just because you could (forcibly) take it?
  • bitdivision 5y ago
    You seem to be making a lot of assumptions about who is giving up citizenship here. Obviously there are some high profile people who are still highly involved with the US, but I'd imagine a lot of folks doing this are those who don't live in America and don't want to deal with the hassle and cost of filing US tax returns every year when they earn no money in the US.
    • tartoran 5y ago
      This article is about wealthy people. We all know they are paying relatively no taxes or doing their best to. Yes, Americans who moved to Europe and are happily making a living there are also giving up US citizenship but end up paying taxes in 2 places or deal with a lot of hassle they’d rather not
      • rwmj 5y ago
        No one's moving the Europe for the lower taxes.
        • alephnan 5y ago
          Cyprus gives you access to the EU while being a tax haven. https://www.vox.com/recode/2020/11/9/21547055/eric-schmidt-google-citizen-cyprus-european-union https://www.vox.com/recode/2020/11/9/21547055/eric-schmidt-g...
          • pjerem 5y ago
            Well, you know that you pay taxes on the country you live & work in ? So you have to find a job and a house in Cyprus. And on top of that, Cyprus is one of the few european countries that are not yet in the Schengen area. So you'll have to stay on the tiny 9,251 Square Kilometers.
            • alephnan 5y ago
              > So you have to find a job and a house in Cyprus I think Eric Schmidt can afford that > you know that you pay taxes on the country you live & work in Yes, I know this. I live abroad. Yes, every country has taxes. The tax rates are not the same. Additionally, countries like Singapore have zero capital gains tax. Executives can just take a symbolic job and pay themselves a symbolic salary, but they're not getting rich off their salaries
  • syops 5y ago
    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 on their citizenship and not on where the income was earned. My questions address this and by saying ‘yes’ to them I’m indicating that these rules are dumb in my opinion.
    • eatbitseveryday 5y ago
      Ought to, but US citizens must still report taxes every year on all global income. Some amount is exempt, though one still needs to file.
    • ironchef 5y ago
      "If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside." - per the IRS (https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad https://www.irs.gov/individuals/international-taxpayers/taxp...)
    • Miner49er 5y ago
      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.
      • AYBABTME 5y ago
        Most countries tax worldwide income of their _residents_ (not citizens). So in your scenario, you'd end up paying tax on the foreign investments if you profit from it when you resume being a US resident. Unless you don't declare the foreign assets, which would be illegal (gotta file an FBAR each year). There's no loophole here, a large majority of countries work this way, and OECD countries certainly do (although some have different treatments for short term residents). Usually the logic is: if you don't pay taxes in country A, you'll pay in country B anyways. And you'll pay an exit tax when you go from country A to B in many cases, so country A gets their cut.
  • lr4444lr 5y ago
    Forbidding them reentry on what basis that you can legally uphold vis a vi their being a foreign citizen from another country we are friendly with? Controlling interest in any U.S. company... chances are their company is already by accounting principles registered somewhere else internationally, or they might move asset ownership to some sort of family trust, or form shell companies to hold US Stock that you'd never trace. I think you're underestimating the legal maneuvers these people can afford to find that have got then to where they are.
    • alephnan 5y ago
      Forbidding people would only punish your normal ex-pats. The billionaires can just dock their yachts in international waters.
  • cpursley 5y ago
    > They’ve been allowed for decades to avoid paying for the infrastructure and management of the country while simultaneously holding most of the influence. Maybe you didn't know this but Americans living overseas still have to file and pay US taxes, often getting double-taxed buy two different countries - and often by a higher tax country than the US. In fact, the US is one of only two countries in the world with this arrangement. I'm an American living overseas and it's a bit of a logical nightmare dealing with all the requirements. Even opening a simple checking account is difficult now for Americans overseas. Americans who haven't lived overseas or haven't traveled much often have difficulty empathizing. But when we were living in the US, I would have found it very strange if not absurd if my non-US born wife had to file and pay taxes to her country of birth.
    • bagacrap 5y ago
      I think gp was referring to how capital gains aren't taxed until realized. Having billions in unrealized gains gives you influence, even though you didn't yet pay tax on it. However, when you relinquish your citizenship you pay an exit tax which is more or less equivalent to what you'd pay if you sold all your assets and paid gains taxes, so I'm not sure how this move really helps billionaires, except that they don't have to pay taxes on future gains.
      • PaulDavisThe1st 5y ago
        > I'm not sure how this move really helps billionaires I am sure they never, ever, ever lie about their assets.
    • PaulDavisThe1st 5y ago
      > often getting double-taxed buy two different countries - and often by a higher tax country than the US. If there's a tax treaty between the two countries, they're not going to be double taxed. They will simply pay tax at the higher-country-rate, and owe nothing to the other. If there's no tax treaty ... I'm not familiar with how that works. The US has tax treaties with many countries around the world, especially the OECD nations.
  • bellyfullofbac 5y ago
    Close to the top of the article: > Between the lines: While the numbers are down this year, that's probably because many U.S. embassies and consulates remain closed for COVID-19, and taking this grave step requires taking an oath in front of a State Department officer. So it seems these are American passport holders who already live in foreign countries, so contributing to American infrastructure, etc, but not benefiting of those things. Obviously having embassies you can go to for help anywhere around the world is useful, but if these are dual-passport holders they probably have the second embassy, for example any EU embassy would help any EU citizen [1]. But well, 2020 saw the worst of Trump saying "Everything is under control!" while ICUs (and morgues) overfilled, so maybe that's a reason for the renouncements. Or maybe was there some new law which was going to come to effect in 2021? Anyway, I find "forbidding re-entry" is extreme and tinpot-dictatorship-esque. [1] https://ec.europa.eu/info/policies/justice-and-fundamental-rights/eu-citizenship/consular-protection_en https://ec.europa.eu/info/policies/justice-and-fundamental-r...
    • papito 5y ago
      They would not be EU citizens. The taxes are even higher. The article is around specifically renouncing American citizenships. Also, dual-citizenship is useless. If you are, say, in Russia, and you have your Russian passport on you, the American consulate won't lift a finger - your ass is wholly Moscow's.
      • bellyfullofbac 5y ago
        Ah, this comments thread will just be full of ignorants won't it... Yes, true about local passports, but if I have a German and American passport in Russia, I'd just call the German embassy. Or is it not good enough, America number 1, Germany number 8?[1] BTW in your (correct) scenario, what's the point of owning the American passport? On the topic of taxes, most countries have tax treaties. If their tax level is 30% in Germany and 5% in the US, they can pay the 5% and fill in a paper for the German tax authorities, and the 5% is discounted. Maybe they're just people who didn't want to finance an idiocracy with the biggest firepower in the world. But rah rah, 'Murica! [1] https://knowyourmeme.com/memes/taiwan-1 https://knowyourmeme.com/memes/taiwan-1
  • gruez 5y ago
    >The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. That seems unnecessarily vengeful considering that foreigners (that weren't originally US citizens) weren't subject to the same restrictions.
  • foolinaround 5y ago
    > The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. Do we forbid foreigners from holding US stocks, assets, etc? Who do you think is financing the profligate lifestyle we live, compared to our true earnings?
    • luffapi 5y ago
      > Who do you think is financing the profligate lifestyle we live, compared to our true earnings? Globalized labor and environmental exploitation, of which the wealthy are gaining the most.
      • goodpoint 5y ago
        Why the downvotes? It's well documented.
  • lmilcin 5y ago
    A lot of assumptions. Maybe people no longer want to live in US and it is wealthy that have it easier to actually go through with this? Or maybe they actually live somewhere else and don't like paying their taxes TWICE. Almost every country in the world (except US) requires taxes based on residency, not citizenship. For example, being Pole, if I spend more than 180 days in Sweden, I now owe taxes in Sweden but no longer owe them in Poland. That is because Poland recognizes that, while I am Polish citizen, I actually was Swedish resident during that tax year. And have an agreement with Sweden so that it is clear where I have to pay my taxes. The US doesn't want to play nice and will only provide you with a little bit of credit for the tax you had to pay in another country. But if you earned a lot, you now have to pay it twice. I actually know 2 or 3 people that work here in Poland that resigned their US citizenship for exactly this reason. Because IRS will hunt you down and demand your taxes even if you don't set foot in US for decades. It has been a topic in our newspapers couple of years ago when we still looked up to US as better place to live and people would need explanation for why somebody in right mind would want to resign US citizenship in favor of Polish. I have even heard of a person that had to US citizens as parents but never set foot on US soil, that was hunted by IRS to pay taxes. It is not like people don't have to pay taxes in other countries, though some have smaller rates. To get better picture you would have to look at where they actually went.
    • PaulDavisThe1st 5y ago
      > For example, being Pole, if I spend more than 180 days in Sweden, I now owe taxes in Sweden but no longer owe them in Poland. That is because Poland recognizes that, while I am Polish citizen, I actually was Swedish resident during that tax year. And have an agreement with Sweden so that it is clear where I have to pay my taxes. The US has similar arrangements with many countries, and you are not doubly-taxed. You simply pay taxes at the highest rate of the two (US and <other country>). Likewise, if you move to the US from a higher-tax country, and the US has a tax treaty with that country, in your first year in the US (assuming you move mid-year), you will owe taxes to both countries, but will only pay the US rate overall. My first year in the US, the US government paid me US$600 because in their eyes, I had paid the UK too much in taxes for the 5 months I had worked there. The hassle is that you still have to file with the IRS, even if your actual tax liability to the US is zero.
  • alephnan 5y ago
    You are assuming 100% of these people are moving to countries with lower taxes. That's simply not true. In fact, countries that have high standard of living usually have equal or higher taxes than the states. Contrary to what you may assume, especially people who have sought an alternative lifestyle abroad value value having a high standard of living, and not going to move to some shithole just because it has lower taxes.
    • mekal 5y ago
      What countries are they moving to? Currently if you save and invest your money you can pass it to your children (or whoever) with a step up in cost basis. So the investments can go on indefinitely from generation to generation essentially without tax. Because technically, you haven't realized any gains yet. In the meantime, you can borrow from banks against these investments (also I believe not taxable, at least not like income tax). These new laws would get rid of the ability to pass on your wealth without a significant (like 50%?) tax because they would recognize death or gifts as a taxable "transaction". Unless you donate it to charity. Which might be why Buffet is leaving all of his money to charities (which are run by his kids...or at least some of them). I'm honestly still trying to figure this out but that's what I understand so far. Another interesting consequence is that calculating long term investment cost basis's sounds like a f'ing nightmare. Maybe that's why the step up rule exists?
  • hizanberg 5y ago
    IRS thinks Green Card Holders who are non-citizens and non-residents owes them taxes on income on their country of residence and citizenship. They're effectively the only country that believes they're entitled to non-citizen and non-resident income, but we're the "selfish lot" for relieving ourselves of a double tax burden to a country we don't reside in? No thanks you can have it back.
  • xtracto 5y ago
    >The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US. This is so wrong at so many levels. Im not from the USA, yet I own Disney stock and visit the USA every year for tourism. Should i be blocked as well?
  • space_rock 5y ago
    It's funny that citizens of every other rich country on the planet have this free arrangement where we only pay tax where we live. But in your fantasies this behaviour and freedom is so evil we should be blocked from returning home
    • libbroscrubber 5y ago
      There can be two issues happening simultaniously: 1. It's unfair for the US to tax it's "citizens" when they no longer live in the country. 2. Billionaires can only become billionaires through exploitation and now some are using this to further shirk any sort of social responsibility or paying back to the systems that created them. The real problem is that we've allowed billionaires to exist.
  • cltby 5y ago
    > avoid paying for the infrastructure and management of the country The premise here is dead wrong. The top 1% pay ~40% of taxes; the top 5% pay ~60%. So not only do these people create the wonderful consumer goods that enrich your life; they also provide the roads, police, fire fighters, etc. Show some gratitude!
• amcoastal 5y ago
  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.
  • rob_c 5y ago
    not just America, the 0.01% around the world are all learning this lesson...
    • djKianoosh 5y ago
      so where are they all going?
      • betaby 5y ago
        Some to Singapore https://www.forbes.com/sites/danielmitchell/2012/05/11/facebook-billionaire-gives-up-citizenship-to-escape-bad-american-tax-policy/?sh=1321e3fe1995 https://www.forbes.com/sites/danielmitchell/2012/05/11/faceb...
      • papito 5y ago
        According to the Bible, nowhere good.
        • jkepler 5y ago
          What biblical reference are you alluding to? I'm not sure how its relevant to the question of where the rich who leave the USA go?
          • Thiez 5y ago
            It's all terribly off-topic, but presumably they are talking about Matthew 19:24, which says (ymmv based on your exact translation): "Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.”
• ninja3925 5y ago
  It is good that we have such process for people to push back against their government greed. Usually, the citizenry is at the mercy of it and can’t do anything about it. You don’t like it? Fine. You have a choice and can get out. Good safety valve. It keeps the populist governments in check.
  • engineer_22 5y ago
    They're not leaving, they're just giving up their civic rights (and duties).
  • jjoonathan 5y ago
    Ah, yes, those greedy populist governments. They set up and facilitate extreme winner-take-all systems on the promise that they are better for everyone. How dare they ask the winners to make good on the "better for everyone" part! Such greed.
  • risaacs99 5y ago
    This is classic libertarian thinking, and I used to subscribe to it, at least to some extent. The more you think about it, though, the more it doesn't hold up. It's just undeniably true that individual freedoms exist only to the extent that society allows them to. To think that you can opt out of society is fantasy. It's in everybody's best interest to make sure society works well for everyone, and that kind of thinking pushes you back to the political center.
    • roenxi 5y ago
      The observation that it is in everyone's interest for society to function is a core plank of libertarian thinking. If everyone was going to opt out then libertarianism would not work. The core argument is that the government doesn't need to step in to fix society, because the incentives are so strong that society will sort itself out through people realising that if the ship sinks they will drown so they have to keep the water outside the boat of their own initiative. Given that it is already in everyone's interest that the ship floats, the people loudly claiming "our enemies are trying to sink the ship!" are probably lying and should not be put in charge. However, such people infest government.
• rory 5y ago
  Without getting into the moral debate of taxing US Citizens globally... how could the US government stop this from happening? Surely these ex-citizens hold a lot of assets in the US, and most probably spend a lot of time in the country. Could the gov't effectively banish them or ban them from holding assets in US assets? What would be the side effects of such a law?
  • papito 5y ago
    They could impose a citizenship "exit tax", if you are worth more than X amount of dollars, I reckon.
    • CodesInChaos 5y ago
      I believe the US already has an "exit tax" where you're taxed on unrealized capital gains when you give up citizenship, similar to how you'd be taxed if you realized the gains by selling.
      • Chris2048 5y ago
        What kind of capital gains, given foreigners can hold US assets.
  • magpi3 5y ago
    Perhaps a tax could be introduced for those who renounce their citizenship and which could work somewhat like the estate tax. Meaning it would only affect people who have considerable wealth.
    • toomuchtodo 5y ago
      This exists. It’s called an exit tax. Applies if you have assets over $2 million, or you haven’t been meeting your tax obligations over the past five years.
  • engineer_22 5y ago
    There's no reason to stop it. Their assets are still paying taxes.
• papito 5y ago
  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 pump more dark money into U.S. politics.
  • ceejayoz 5y ago
    > and it is still not enough It never will be. I don’t think you can psychologically become a billionaire if you have the mindset that permits leaving a penny on the table.
  • fourthwaveska 5y ago
    > 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. Guess you have never lived abroad? If you think the US doesnt care about you when you’re in country, you dont even exist when you’re out of it. Imagine being in the middle of a coup, calling up your consulate for guidance only to find out that they all left the country or are hiding in their bunkers. Been through that before.
    • enriquec 5y ago
      Where was that?
      • fourthwaveska 5y ago
        Istanbul, 15/July/2015.
    • ceejayoz 5y ago
      > Imagine being in the middle of a coup, calling up your consulate for guidance only to find out that they all left the country or are hiding in their bunkers. Been through that before. What, exactly, was your expectation? That they'd send out Navy SEALs to rescue you?
• surajs 5y ago
  Once when young, I used to dream of living and working in the US, how naive I was!
  • engineer_22 5y ago
    Where are you now? What do taxes cost you?
    • moss2 5y ago
      Not related, but I pay about 40% income tax plus a 25% value-added tax (VAT) on every purchase. It's at a good level but my political belief is that this should be higher.
      • not_throw_away 5y ago
        That's not an uncommon belief - feel free to write an extra check to your tax department and they will happily accept it. Normally tax departments have a whole system set up to accept voluntary additional tax payments for anyone who feels inclined to top up their contribution to the wellbeing of the state.
        • moss2 5y ago
          Very clever, but my tax agency does not allow for donations.
          • djbebs 5y ago
            Somehow I doubt that. What country are you in?
• zapataband1 5y ago
  Soo, could a senior engineer that's lived here since he was three and pays absurd amount of taxes every year get a green card yet???
  • tartoran 5y ago
    I surely hope so. I was wondering too about non citizens who pay taxes, should they become ones?
• Gustomaximus 5y ago
  Pretty crazy with people like Eric Schmitt applying for Cyrus citizenship. The guy is worth $20+ billion. You'd think at that point you hate tax like the rest of us but recognise it makes zero difference to your own quality of life and this is what funds great nations. US and other countries need to come down hard on wealth movement in general. Biden's global tax minimums are a good start but government will need to start limiting physical, financial and business access bloc nations to make this effective.
  • ttyprintk 5y ago
    Reading several of the comments, there’s a narrative about rich people “voting with their feet” in an attempt to starve the Federal government into behaving better. And some are jealous that this is only accessible to the elite. And in other threads, I think people are expecting wealth to become hypermobile. Maybe even to the point that theft is so hard to reverse that digital money is only valuable given the protections of being a citizen of a certain kind of state. People here have negative opinions about know-your-customer obstructions to personal banking, even though we are all hurt by money laundering.
  • Chris2048 5y ago
    > this is what funds great nations Is the US a greater nation than Cyprus?
• TheGigaChad 5y ago
  Good, the cocksucking statists in the comments should get cancer an die.
• academia_hack 5y ago
  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 actually pay in tax. I can't have a proper retirement account here since America doesn't recognize the local pension providers, so my government mandated pension is deducted from my salary here and then also taxed as income in the USA. If I ever want to leave, the IRS charges a small fortune for the privilege of not being a citizen too. I'm sure there's a small number of rich people gaming the system, but for the vast majority of expats the citizenship-based taxation system is almost cartoonishly cruel.
  • paulddraper 5y ago
    US states do the same thing. States with income tax will tax you whether you work in the state, or you are resident in the state.
    • a4a4a4a4 5y ago
      Or if you're in NY for too many days, even not for work, they'll tax you too :)
      • paulddraper 5y ago
        Or if you're remote but company HQ in NY.
    • umeshunni 5y ago
      Or in the case of California, up to 4 years after you leave the state.
      • deleted 5y ago
        [deleted]
      • 5y ago
• fourthwaveska 5y ago
  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 being spent on war and murder in the name of christ and oil profits. I was born an American and would prefer not to die that way.
  • cpursley 5y ago
    Spanish tax and legal system is a nightmare. Have you looked at Portugal?
    • moneywoes 5y ago
      Don’t they have no capital gains tax?
    • fourthwaveska 5y ago
      Yes, but my wife has spent the past four years learning Spanish and every time I suggest Portugal she gets a murderous look in her eyes. My preference is actually Denmark, but it is an order of magnitude more difficult to move there, and my wife hates the language :(
      • Izikiel43 5y ago
        Portuguese is not that different from spanish.
        • fourthwaveska 5y ago
          This argument also gets me icy cold stares of death. It also reminds me of how mind-blowing it is that a country whose land-area is 1/5 of California managed to conquer almost 1/2 of South America!
• JCharante 5y ago
  I'm surprised more HN readers don't view citizenship as a subscription tier. Non citizens can work in the US but it's harder to do the paperwork. What's wrong with comparing benefits between service providers? Yes the US will try to save you if you get kidnapped by extremists, but they won't go out of their way to get you vaccinated against covid unlike the Chinese government who sent sinovac supplies abroad to vaccinate their citizens.
  • mariuolo 5y ago
    > subscription tier One word: draft. Would you die for your service provider?
• dna_polymerase 5y ago
  How many of those never even lived in the U.S. but where born there and left as babies? https://www.washingtonpost.com/world/2020/10/27/us-citizenship-renouncement-fatca/ https://www.washingtonpost.com/world/2020/10/27/us-citizensh... In this case it was 'only' a nurse, but if she'd made $2 million she would be on that list, right?
• zarkov99 5y ago
  Of course they are. When the dominant narrative is that America is a racist hellscape, built on oppression and plunder then things like patriotism and civic spirit seem absurd, quaint notions, ripe for ridicule.
  • luffapi 5y ago
    That’s not the “dominant narrative”, it’s historical fact. Slavery, segregation and genocide of Native Americans aren’t fabricated stories, they actually happened. Patriotism is for fools. Civil spirit starts with not rejecting citizenship for tax reasons.
    • Dma54rhs 5y ago
      Every border in the world is built upon blood and war, not any different really.
      • libbroscrubber 5y ago
        The US had segregation until 1964. It's pretty much done non-stop military adventurism since it's inception. Yes, most countries are unethical and morally repulsive, but the US is at the very top of the heap and it has been for a long time.
  • fourthwaveska 5y ago
    Patriotism? What exactly is that word to you? To me it is merey loyalty to mud.
    • s1artibartfast 5y ago
      Caring about your society, institutional values, and countrymen.
      • fourthwaveska 5y ago
        My life experiences have made me incapable of empathizing with this view. My fellow citizens have never had my back, and I disagree with most everything they hold dear, as they disagree with most everything about me. I don't hate America or its people, I'm just not that into them. Patriotic people love to tell others "If you don't love America, leave it". Well, as my patriotic act to those great patriotic Americans .. I left.
• throwaway5752 5y ago
  I've considered it (not wealthy by the definition here) because of the prior four years and lingering weakness in the system of government. There was very nearly a successful putsch this year, and it's widely popular with the party that attempted it. I am patriotic and pay my taxes - I would pay more - but I have explored dual citizenship for the same reason that Germans did in the 1930s.
• throwpo 5y ago
  I stand to make a life changing amount of money through an impending future liquidity event. I cannot understand people who do this. Throwing away US citizenship for mere extra dollars in ones bank account… What is the state of your life? Have you no family or community? Are you really willing to uproot yourself and your entire lifestyle for mere wealth? The HN libertarians love to comment on articles like this and point fingers at progressives like they are ruining the US. As someone who would actually feel a significant impact from this, I can tell you I cannot relate to that position at all. Even should there be a wealth tax, or whatever, it would take Jan 6 levels of violent upheaval on the regular before id ever consider giving away my citizenship. Maybe the minuscule number of people who do this don’t have all that much to tell us—except that avarice knows no limits?
  • expathrowaway 5y ago
    I am considering renouncing my US citizenship and it has little to do with money. I've been living abroad for 10 years now and I have no interest in moving back. I am in regular contact with my family and friends back in the US and I also have a social local social life. All I'll be giving up is paying US taxes and being able to spend more than 90 days a year visiting.
• roenxi 5y ago
  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.
  • ilammy 5y ago
    > Cyrpruscian. Cypricite? Cyprosii? Cypriot.
  • tremon 5y ago
    Eric Schmidt, Cyrpruscian. Cypricite? Cyprosii? Cyprous.
• circular_logic 5y ago
  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-the-costs-and-implications/ https://www.expatnetwork.com/how-to-renounce-us-citizenship-... [2] https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...
  • apples_oranges 5y ago
    Can a citizenship be exchanged? For example you get my Australian passport, I get your American? Neither country loses a taxpayer this way.. ;)
    • cblconfederate 5y ago
      I always wanted to start a "couchsurfing for passports" , or even airbnb. If one is a citizen, they can vet for an exchange citizen, sounds democratic to me.
    • shell0x 5y ago
      Not exchanged, but considering Australia and America are both immigrant countries, you may be able to get an Italian or Irish passport based on ancestry if your ancestors came from there.
    • ttyprintk 5y ago
      I believe to renounce you must first have dual nationality. You could marry a foreigner for nationality, then (eventually) both renounce your home country.
• gertrunde 5y ago
  A couple of sources from another perspective: https://www.bloomberg.com/opinion/articles/2020-08-31/why-thousands-of-u-s-expats-are-renouncing-their-citizenship https://www.bloomberg.com/opinion/articles/2020-08-31/why-th... https://theconversation.com/americans-are-renouncing-us-citizenship-in-record-numbers-but-maybe-not-for-the-reasons-you-think-145365 https://theconversation.com/americans-are-renouncing-us-citi... And one fun quote: "Still, all American expats – even those who’ve lived abroad for decades, earn no income in the U.S., and hold no U.S. assets – must submit an annual tax return to the Internal Revenue Service. Now, ever since Congress strengthened anti-money laundering and counter-terrorism financial reporting requirements, many have had to hire costly international accounting firms to do their taxes. The consequences of noncompliance are severe: forfeiting up to 50% of all undeclared assets held overseas." There may be some "ultra-wealthy" people doing this, but I suspect that they are not the bulk of it by a long way.
• nickthemagicman 5y ago
  I would be happy to pay taxes if I thought that my tax money was being used well. I wonder if these mega rich are leaving to avoid paying taxes to a what they view as a mismanaged governmental system because they think they can do a better job of distributing their money and making the world a better place.
• compsciphd 5y ago
  it's not just about taxes. US Citizens who live overseas can't invest in what are effectively foreign mutual funds (PFIC in IRS parlance). While retirement plans are generally exempted if there's a tax treaty, that doesn't help other forms of money one might get. Your local government gives your child a grant of money each month to be invested in a choice of funds? You're a US citizen? sorry, you're out of luck, this makes doing taxes effectively very very difficult.
  • pedrosorio 5y ago
    Conversely, you can't buy US funds as a European resident due to PRIIPs requirements: https://www.justetf.com/ch/news/etf/us-domiciled-etfs.html https://www.justetf.com/ch/news/etf/us-domiciled-etfs.html
• xorfish 5y ago
  How the US treats expats is really bad. No wonder that many renounce citizenship.
• madengr 5y ago
  Ah, the same tech liberals who voted for this shithead are now fleeing his proposed tax policy.
• alephnan 5y ago
  Being upset about this is like feeling Roth accounts are unfair.
  • libbroscrubber 5y ago
    Are you talking about the Peter Theil thing? I think it's fair that people who don't like watching billionaires exploit the rest of us would be equally pissed about Eric Schmidt dodging taxes.
• BrianOnHN 5y ago
  Good riddance. "Wealthy" people contribute capital. The government can print more money to replace them at the expense of the same "wealthy" people who most likely got "wealthy" from exploitative practices opposed to conscious capitalism.
  • luffapi 5y ago
    They will continue to cash in from the systems of exploration they’ve already created.
    • BrianOnHN 5y ago
      I'm pretty sure generational wealth has the most to lose from printing money. So they can try to continue being exploitative. But the government should print money to fund competition.
• alephnan 5y ago
  There's this idea floating around in this thread that people get rich, then get richer in and then leave to evade taxes. If optimizing for money really was people's intention, it's much more optimal to leave before you become mega rich. You can move to Singapore once you have $6 million to buy a visa-by-investment. There's no cap gains taxes there, so your money can compound unencumbered. Then again, not every ex-pat who renounces their citizenship does that, maybe because they don't want to live in Singapore. Some of us ex-patriate to countries with even higher taxes than the states. Look at the number of people ex-patriating with a grain of salt. It's like the Drake Equation, there are many factors that would allow you to narrow the 'search space', and after all is said and done, there will just be a small amount of people who have outsized influence in the states and also evading taxes.
  • ttyprintk 5y ago
    This —- they have the wealth to initiate the process. Citizenship by investment (CBI) is even cheaper in the Caribbean. Interestingly people from mainland China and the Middle East hit the Caribbean first for this. I don’t think it’s a stretch to say that the reasons haven’t changed.
  • MuirsGhost 5y ago
    >it's much more optimal to leave before you become mega rich. It is almost as if the US provides some kind of useful, taxpayer funded, environment for becoming mega rich....
    • 1270018080 5y ago
      Buying political parties?
  • someguydave 5y ago
    The interesting thought experiment is what would happen if the US dropped its worldwide claim to taxes. I suspect there will be a pretty big exit migration of wealthy US citizens to capitol gains tax havens like Singapore.
• c_o_n_v_e_x 5y ago
  Overseas American here. The whole paying tax and getting nothing out of it really sucks. I’ve been out over 10 years, here are some of my good and bad experiences. Good: 1. When I first got here, super cheap drinks put on by the marines at the US embassy. People would get wasted and it was an obvious security threat so those parties don’t happen anymore. Bad: 1. No access to covid vaccine despite paying taxes and not having vaccine access in local country for a while. This was a hot topic in many US expat communities. Globally, Embassy and consulate staff were all vaccinated but it was “bad optics” for overseas citizens to have vax access. 2. Brother (also citizen) was on a trip to Kilimanjaro as covid was kicking off. The Europe travel ban was announced so I tried calling the embassy for travel advice, not even a return call. 3. While I haven’t personally needed it, if the doo-doo hits the fan, you’re on your own. You pay for the cost of your own evac, even if it’s a Govt flight. 4. The annual pain and cost of tax filing and bank account reporting. 5. The ongoing pain of trying to get financial services as an overseas US citizen. Banks, stock brokers, etc don’t want you. It’s my understanding that in French government, they have a specific representative for overseas citizens. In the US, our voices are scattered across 50 states (and homelanders don’t care about us) so we always get shaft. All that being said, I have no plans to renounce.
  • throwaway5372 5y ago
    > 1. No access to covid vaccine Countries were not vaccinating permanent residents? I had no problem getting a vaccine as a foreigner in Turkey. I thought all countries would be like that.
    • c_o_n_v_e_x 5y ago
      I got the vax eventually. Given that I was a foreigner and under 40, I was at the back of the line to get my shots. My family back stateside were fully vaxxed a good 4 to 5 months ahead of me.
• deleted 5y ago
  [deleted]
• cmrdporcupine 5y ago
  Many of the comments here are preposterous. I am a socialist by conviction, my whole life, and strongly believe the wealthy should pay their fair share. But being a Canadian and knowing many Americans who have come here to work -- making prosperous but not insane professional class incomes -- and still having to file with the IRS, often having to pay into the IRS (without receiving services back in the US) and having their Canadian retirement funds messed with by the IRS, I find this whole thing baffling. No other western nation does this, and it's unjust. why would this forum -- full of people in the tech industry making a good living -- try to justify this? Put this another way: should you cross the border into Canada and take up residency here (for a job, or because your spouse lives here, or because you like it here) you will now be effectively double-taxed for the rest of your time here. This from a country that supposedly started its war of independence over the issue of taxation without representation? Like I said, preposterous. Glad my mother and myself never applied for the dual citizenship we could in theory be entitled to. What a curse that would be. Yes, make the seriously wealthy pay their share. But most of the people suffering from this situation (and often trying to renounce their citizenships in many cases not able to) are your peers in your industry.
  • xtracto 5y ago
    Right. Back when i was living in Germany we were part of a very international community. I learned about the USA taxes craze when our poor American friend had to file his US taxes. Everyone in the group was like WHAT? My opinion is that it's a quite abusive practice. However I've heard some people say it is worth the hassle so that you can save your passport everywhere saying "I'm American " and getting some sort of special treatment. Or that your embassy saves you from some crazy scenario you could get into as an expat.
• arbitrage 5y ago
  this is not new. nor is trying to surreptitiously gin up sympathy for tax avoiders' plights via polemical journalism pieces like this.
• hnthrwy1111 5y ago
  I'm an "accidental American" who has navigated this issue and it's incredibly easy. Just don't file. Every professional that writes blogs about this has a professional duty to give legal advice but the practical advice is just don't file. Look into what exactly triggers data to be sent to the IRS under your tax treaty and the policies of your financial institutions. Being "accidental" is the key here. If you tell your bank you aren't an American and you have a non-American birthplace and birth certificate they have absolutely zero way of knowing and your information will not be sent. If you have an American birthplace you can lie and say you renounced, but this carries some risk as the IRS maliciously publishes lists of renouncers so it's possible they could guess you lied. FATCA and FBAR are egregious violations of your rights. Not even the NSA has the right to spy on Americans abroad, but the IRS can do dragnet surveillance on American financial data from foreign countries with no probable cause and no warrants. You have a duty not to comply.
  • alephnan 5y ago
    > You have a duty not to comply. If you're making income in America, you owe US tax taxes. If you are a permanent resident of the United States, you owe US taxes. Whether the IRS is using mafia tactics or not, what you are describing is tax evasion. There are legal ways to minimize your tax burden, but this is horrible advise.
    • vgatherps 5y ago
      This comment isn't about somebody living in America. This is about somebody who doesn't live in america, has never lived there, doesn't have a passport, but are considered "american" by the IRS - somebody born in the USA to non-citizen parents while traveling for example.
      • AdamN 5y ago
        Not by the IRS, by the USG.
        • paxys 5y ago
• alephnan 5y ago
  This title would be less click-baity if it was 'People renouncing their citizenship are wealthy' because I don't think poor people can afford to. That says nothing about whether poor people are more or less interested in doing so.
  • throwaway5372 5y ago
    I was feeling the same. I live abroad and I'm not rich. I sometimes debate renouncing my US citizenship, but working remote in the US makes me well off here. If I had a local job making piles of money I might be more inclined to. My only complaint is that when I go to visit mom, I get endless grief from the immigration officials.
• jacquesm 5y ago
  Lots of not so wealthy people doing it as well, simply to get rid of the hassle and to be able to do regular banking abroad. Plenty of banks simply refuse to do business with American passport holders.
• ma2rten 5y ago
  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. This is such lazy reporting. Is there any data showing the connection to tech? Is there any indication that Eric Schmidt would renounce his American citizenship if he becomes Cypriot? What is a zillionaires?
• cletus 5y ago
  It's obviously a burden on the not-so-wealthy to be a US citizen living overseas. There's the annual requirement to file a tax return (most countries don't do this) but also the implications for opening accounts thanks to FATCA. The IRS requirement in particular needs to be addressed. Fun fact: the US is becoming a haven for tax avoidance and privacy simply because they're forcing all this disclosure information on other countries and are completely unwilling to reciprocate. A lot of people concentrate on the super-wealthy renouncing US citizenship. I mean that's going to happen. For people who don't know you get taxed on your holdings at current market rates when you do this. Obviously people still do this because they realize it's going to be cheaper in the long run. I don't really care about that. What I do care about is removing the political influence of former citizens. They are technically foreigners now and there are restrictions on foreign influence on US elections. So we should be: - Stopping former citizens from contributing to political campaigns, PACs and politically active charities; - Companies they control or directly control should likewise be prohibited from contributing; and - Any such organization that contributed to political candidates directly or indirectly should be forbidden from accepting foreign money or having such foreigners in any leadership or executive position. We should probably do something about holding US real estate too but that's a whole other discussion.
• 0x0nyandesu 5y ago
  The irony is I've seen so many eastern Europeans who gain American citizenship and then continue to not pay taxes on any of their income since it's all off the books to the IRS. This is especially common with the semi rich (5-20 million net worth).
• Gunax 5y ago
  It's completely corrupt. I don't know why we cannot change it. Remember that you need not ever even have been to America to be a citizen. Second, America can decide who is a citizen according to their own laws, which is a bit of a conflict of interest. So currently children of Americans are American, but there's no reason they couldn't arbitrarily decide that grand children, or great grandchildren are as well. Or if you want to be really silly, in theory they could grant citizenship to anyone if they amended the laws to do so. So ive been given a status at birth by a foreign country that I have no wish for. They then grant me the privilege of paying them to renounce the status that they declared me to have! Why thank you land of the free!
  • space_rock 5y ago
    This does happen. People get unwanted US citizenship have to renounce. Rediculous to tax someone for that
• ggggtez 5y ago
  I've heard that technically renouncing us citizenship to dodge taxes is illegal. But as with most things, that's only if you get caught.
• jl2718 5y ago
  > Eric Schmidt, the former Alphabet CEO, has applied to become a citizen of Cyprus. Is he going to pay an exit tax, or has he found a way around this too?
• globular-toast 5y ago
  Remember when they declared independence and chucked all that tea off the boat because they were paying taxes to England? How ironic.
• donretag 5y ago
  While the taxation due to US citizenship has occurred now for a hundred years, only now is the US govt enforcing it, mainly due to the Foreign Account Tax Compliance Act (FATCA) signed into law by Obama.
• deleted 5y ago
  [deleted]
• penguin_booze 5y ago
  > For most countries, if you are a citizen but don’t reside there, you aren’t taxed in that country. Is it true? To my knowledge, if one's home and the resident country have double taxation avoidance agreement, the citizen end up paying the maximum of the tax rate amongst the two. Is it the case that the US doesn't have DTAA at all, or do US citizens always get taxed twice?
  • ttyprintk 5y ago
    USA does have DTAA with maybe 60 countries. Those mutual agreements are based on income from personal services. I think a lot of the comments in this thread are drawing conclusions about specific sources of income: - there’s an exit tax, might be millions $ for the top-tier. You might give your money to family members or a trust before planning to pay it. - there’s capital gains tax. This means your income is not from personal services and instead from just being wealthy. Looks to me like a lot of the comments here are defending the rights of people with that lifestyle. Those people do not need DTAA. - reported income from personal services (labor) is what you’re talking about. The bad experiences in this thread are real, but DTAA is meant to make life easier for professors and touring musicians, etc. - unreported income is indistinguishable from money laundering. The underworld is a very libertarian place, a sore spot for some in this thread.
• da39a3ee 5y ago
  US salaries are much more than salaries in, say Europe/UK (for software engineers). Is it worth maintaining US citizenship in order to make it easier to work remotely for US companies from outside the US?
• hnbalsamicw 5y ago
  As a permanent resident living in the US I find myself wondering if it thusly makes sense to never take US Citizenship. It seems like I can easily abandon my residency the moment I want to retire and leave the US. Am I missing something ?
  • liquidmetal 5y ago
    Permanent residents are also subject to the expatriation tax AFAIK.
  • gniv 5y ago
    It's more complicated than that. If you've had the green card more than (I think) 8 years you will be treated like a citizen should you want to give up the residency. So you have to pay the exit taxes (mentioned somewhere else in this thread).
• anigbrowl 5y ago
  Worth noting that this story gets run every year around this time (because that's when the annual #s are released) and is always about last year.
• mrtweetyhack 5y ago
  Leaving a sinking ship is wise
• lalos 5y ago
  This also affects long term US residents (green card). See more at https://www.expatriationattorneys.com/green-card-u-s-exit-tax-8-years/ https://www.expatriationattorneys.com/green-card-u-s-exit-ta...
• surfingdino 5y ago
  International tax reporting is a real burden and I am not surprised they choose to go down that route if it makes life easier for them.
• ne0flex 5y ago
  Being a Canadian, I started a tax-free savings account "TFSA" (similar to a US Roth IRA but with way less restrictions)when I turned 18 and was investing heavily in it. A few years later I would get a green card and move to the US and didn't touch the account afterwards except make a few rebalances here and there. My brokerage asked me to update my information and asked me if I was a "US" person to which I answered yes because of my greencard. A little while later I get a notification that I owe US taxes... on an account that I opened before I had anything to do with the US and that is considered a tax-free account in Canada.
  • digianarchist 5y ago
    The general advice is to liquidate your TFSA, ISA etc. before moving to the US.
  • whoomp12342 5y ago
    its clear how your situation could be abused. i am not suggesting that you have done this, but that it creates an interesting loophole for the wealthy by harboring investements into other countries capital. Lets say you are a 0.1%er who happens to live in canada. Invest everything on canadas terms, then move to the USA. receive foodstamps, welfare checks and the likes for XX years. Go back to canadian citizenship and cash out. Darn, looks like tax payers supported the ultra wealthy while they just got richer eh?
    • dghlsakjg 5y ago
      The TFSA is not something that can be abused by a high income individual. It has a $6,000 yearly contribution limit. Canada, if anything, has an investment tax scheme which favours middle class investors. For someone making millions of dollars Capital gains tax is tied to your income tax bracket in Canada so it is very likely that you would end up paying higher taxes. Canada also has a tax and income information sharing with the USA, so someone making big bucks in investments in Canada could not benefit from means tested programs in the US. The scenario you proposed is entirely impossible.
      • 5y ago
• Yizahi 5y ago
  Not surprised. Rich people have disproportionally many crooks who have both desire and capabilities to avoid paying taxes.
• matttrotter 5y ago
  It's funny how the IRS publishes a "shame list" of people who renounced.
• tristor 5y ago
  I was unwilling to renounce and stay abroad, for a variety of reasons, so I returned to the US and decided to stay. But for a good while I lived and traveled outside the US as a digital nomad and the tax implications are immense, especially if you are a member of any corporation or LLC, have any retirement accounts, or own any property. It's an absolute nightmare to correctly file taxes, has an astronomically high audit risk (you basically /will/ be audited), and is very expensive to hire accountants that have understanding of multiple national tax laws to cover things correctly. FATCA made this even worse. Now many companies and financial institutions abroad will refuse to do business with you if you hold US citizenship /even/ if you are a dual citizen and primary resident of the country they are based in. It's absolutely absurd how the US government treats American expats, and is in stark contrast to how British, Australian, and German expats are treated (of which there are many all over the world).
  • hermannj314 5y ago
    I was an American citizen living in Luxembourg for 3 years around 2015. I agree - many banks did not want to let me open an account, and when BNP Paribas said they work with Americans it was a huge ordeal to open the account. However, as a salaried employee, I did not struggle with the taxes. The IRS form was very straightforward and after deductions I didnt owe any US taxes (I made just over the equivalent of $100k USD). IIRC the theory is that you determine your tax liability if you had made all your income in the US and you subtract the liability you incurred by your foreign tax residence. You pay the difference but only after you cross some income threshold. If you are living somewhere that 'pays more in taxes' then you wont owe anything to the US. I can 100% understand why very wealthy people hate this system, but as a software dev making a modest living it was not onerous or unfair or difficult to manage.
    • tristor 5y ago
      > I can 100% understand why very wealthy people hate this system, but as a software dev making a modest living it was not onerous or unfair or difficult to manage. Okay, now apply your experience with this system but instead of being a salaried employee you run a <5 person LLC that is incorporated in the US that does the same work but on contract and has a small leased office. It goes from being one form and a simple exercise into a massive nightmare, even though the dollar amounts you are actually making in income aren't any higher (at the time I think my AGI was like $126K USD). Anything off the path of salaried employee stationary in a foreign tax residence exponentially increases the complexity involved and therefore the expense to file. Most years, my accountancy bill was actually higher than the taxes owed, and it would have saved everyone quite a lot of trouble for little gain to just do away with this archaic and pointless rule which no other civilized nation has. This is not just a problem for the very wealthy, it's a problem for anyone who does not fall in a very narrow bucket but happens to reside abroad while having US citizenship. Even in your case, where you found the process simple, you must admit it made it difficult to secure accounts and form business relationships abroad because of the tax implications and reporting implications for your possible business partners.
• tehjoker 5y ago
  Pretty cool that the guys the US government bends over to service and on whose behalf the army fights to open new markets basically see themselves as above the other Americans.
• dblohm7 5y ago
  This can backfire horribly no matter which citizenship you are renouncing. Conrad Black renounced his Canadian citizenship so that he could take a seat in the British House of Lords. Then he was convicted of fraud charges in the USA. He had a hell of a time getting back into Canada after that!
• k__ 5y ago
  I read, some German citizens travel all the time without paying taxes, because of some loop hole that only requires you to pay income tax when you stay longer than three months in a country.
• noja 5y ago
  Terrible title! "Wealthy people" - all of them? Two of them? Half of them? Most of them?
• novok 5y ago
  Thousands in a country of hundreds of millions. This is a drop in a drop of a bucket. Wake me up when it breaches %0.01 of the population.
• clarkbw 5y ago
  As an ex-pat what bothers me most is the lack of representation, I'd keep paying taxes if we actually had some virtual state. Citizens abroad are essentially gerrymandered by their last state of residence meaning there is no useful representation for those abroad. However with an estimated 9 million+ citizens living abroad ex-pats all together would represent the 10th or 11th most populace state. 9 million US citizens is similar to the population of New Jersey which has 2 senators and 12 representatives working for them. Where's my Cory Booker?
• nyghtly 5y ago
  "The big picture: Only the U.S. and Eritrea tax people based on citizenship rather than residency. For most countries, if you are a citizen but don’t reside there, you aren’t taxed in that country." Sounds like we need to start taxing based on residency.
• say_it_as_it_is 5y ago
  .. and soon local mafia may ransom their families without worrying about American government protecting its elite. It'll be a good day for organized crime. Wealthy people have the most that they can afford to lose.
• sunstone 5y ago
  So long and thanks for all the fish.
• fukmbas 5y ago
  Goodbye! Don't let the door hit you in the ass. You pay no taxes and drain our economy. BYE
• woopwoop 5y ago
  All-in-all, the United States is a great place. But it's an awful look for a country to make it hard to leave. I think shutting the borders to people coming in is bad, but shutting them to people going out is so much worse.
• oriettaxx 5y ago
  someone calls this "voting with your feet”. you do not like it, and you just leave.
• worik 5y ago
  FACTA Rouge state that is using its economic might (and implied brute force) to bend foreign banks to their nefarious will For one thing they are cornering the market on industrial scale money laundering. Making American states the last place standing where unattributable companies can be formed. End of empire - a dangerous time.
• 2xpress 5y ago
  It's really weird how an obviously bad law that's been active for 11 years now and hurt so many people has not been fixed yet.
• dzhiurgis 5y ago
  > Only the U.S. and Eritrea tax people based on citizenship rather than residency. For most countries, if you are a citizen but don’t reside there, you aren’t taxed in that country. Funny thing is if you are living nomad life you are still required to pay tax somewhere, which I'm not sure makes much sense. My country surely not going to pay my medical expenses abroad, so why should I contribute?
• liamdgray 5y ago
  If I am a US citizen with negligible assets and a plan to move abroad and renounce my US citizenship, and I plan to found a software startup, how should I go about it to minimize the taxes I eventually pay to my soon to be former government, whose unjust practices I'm trying to stop funding? I could potentially wait until my US citizenship is a thing of the past before I even build anything, let alone create a new legal entity. But ideally I would find a way to start this now.
  • withinboredom 5y ago
    Might be a few days too late… but here’s the strategy I’m using. Start a Dutch BV and hire yourself and move you to the Netherlands. The BV will Sponsor you under the Dutch-American Friendship Treaty. Don’t mention “startup” though, that’s a totally different (and much harder to get) visa. You can renew a DAFT visa as much as you want, but after 5-7 years, you can get a Dutch passport as long as you stay in the country enough. Due to tax treaties, you get a 30% tax cut in the NL (30% ruling) for five years, and you only pay the difference on US taxes after paying NL taxes (virtually impossible because NL taxes are generally higher than US taxes).
• deleted 5y ago
  [deleted]
• bacan 5y ago
  So what like 7k people? 2 Million is not even a big figure. Sounds like the site is making a mountain out a pin prick. Also if you notice the number spiked in 2016, meaning that it was more to do with Trump than anything else.
• 11thEarlOfMar 5y ago
  "... the protections and privileges that U.S. citizenship affords ..." What are these protections and privileges, specifically, that are not afforded by any other nation?
• RickJWagner 5y ago
  What a pack of weasels. Back in the day, Elvis Presley was asked by his accountant if he wanted to shelter his income. Elvis told him "No. If I get low on money, I'll schedule more concerts. I pay my taxes." That's one reason why he was The King.
• WhyNotHugo 5y ago
  I don't see why this is a problem though. For almost any other country, if a wealth person moves abroad, they no longer pay tax in their original country. So this just levels the field.
• lo136236 5y ago
  Good day, I am Mr. Azim Premji Accountant, the Director of Credit & Marketing Chong Hing Bank, Hong Kong. Address is Chong Hing Bank Center, 24 Des Voeux Road Central, Hong Kong. Please send me an email now to ceo.azimhashimpremjis@gmail.com I have a business proposal for EUR 290,000,000.00 for you. All supporting documents to substantiate the claims will be made available to you prior to your acceptance and as soon as I have received your Email in return, thank you. Regards, Azim
• lo136236 5y ago
  Good day, I am Mr. Azim Premji Accountant, the Director of Credit & Marketing Chong Hing Bank, Hong Kong. Address is Chong Hing Bank Center, 24 Des Voeux Road Central, Hong Kong. Please send me an email now to ceo.azimhashimpremjis@gmail . com I have a business proposal for EUR 290,000,000.00 for you. All supporting documents to substantiate the claims will be made available to you prior to your acceptance and as soon as I have received your Email in return, thank you. Regards, Azim
• cyanydeez 5y ago
  makes sense, they dont need to be american to buy american politicians or influence americas political tax system. why wouldnt they want to live where they dont shit.
• neilpointer 5y ago
  If I were financially capable of doing so, watching the rising tide of idiocy and illiberalism in America, I'd renounce my citizenship too. Not sure why Axios so unquestionably assumes the only reason is taxes imposed by the Biden Administration rather than a feeling of "why am I supporting this garbage society from the other side of the world?" It's been going downhill since The Tea Party.