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They’ve been allowed for decades to avoid paying for the infrastructure and management of the country while simultaneously holding most of the influence. “Reno

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
      You're including non-adults (330m population @ 6%). It's closer to 8% of the adult US population. Not very many people under 18 are millionaires or reasonably likely to be. The non-adults in question fall under the millionaire household grouping. And if anyone is interested in the household wealth distribution (as of 1Q21): Top 1%: $41.5 trillion | 90%-99%: $48.8 trillion | 50-90%: $36.5 trillion | bottom 50%: $2.6 trillion $129.5 trillion total household assets. There are around 128 million households in the US. The average American household is now worth a million dollars (the median is obviously far lower). That top 1% of US households - 1.28 million households - holds an average of roughly $32 million in assets.
  - alephnan 5y ago
    > "barely middle class". Inflation. Being a millionaire or having a six figure salaries used to have much more weight during the 80s. Pretty much any senior level engineer at FANG can be a millionaire if they saved, but they can barely afford a standalone home in San Francisco. What does the term 'middle class' even mean if they can't afford a home? Only 20% of millionaires surveyed feel they're rich. https://www.cnbc.com/2021/05/12/net-worth-to-be-considered-wealthy-in-2021.html https://www.cnbc.com/2021/05/12/net-worth-to-be-considered-w...
    - mywittyname 5y ago
- trutannus 5y ago
  > The best thing to do is forbid them re-entry into the country Given the track-record lefty authoritarianism has, I'm always a little nauseated to see people pull out the truncheon and jack-boots to enforce "economic justice". That and suggestions like this don't even make any sense, and rarely ever do. It always looks to me like retribution is the aim here, rather than effective economic policy.
  - papito 5y ago
    Well, now, let's not paint "authoritarianism" as "lefty". Some Marx-reading student on campus is not exactly a threat, is it? The ultra-left sentiment is, indeed, anti-liberal at its core, but it is still an irrelevant fringe. The actual, viable threat of authoritarianism is coming from the opposite side, which is a spit away from holding absolute power, here in the States, at least. And then, it's on.
    - trutannus 5y ago
      This is a complete misrepresentation of my point. I never tried to 'paint "authoritarianism" as "lefty"'. I specified there's an issue with lefties who are also authoritarians. If you don't think that can exist and if you think it's not that big of a deal, I suggest you take a look at the latter-half of the 20th century. It's pretty uncharitable to paint my argument as being afraid of a student on a campus who's read the Communist Manifesto. That's not even in my argument and requires a lot of bad-faith interpolation to get to from what I said. > viable threat of authoritarianism is coming from the opposite side This is nothing more than whataboutism. There's authoritarians on both sides. They're both just as dangerous in the end-game. In Canada, it's the left mainly. In the US, there's highly vocal, and influential to public opinion, left wing authoritarians. In Canada lefty authoritarianism isn't just a fringe, it's mainstream. This is true in a lot of places too. I'm not sure why some folks insist on downplaying the risk of authoritarianism when it comes from the left as opposed to the right. Both kill just as many people, one just uses gas where the other uses starvation.
      - papito 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!

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
    You're including non-adults (330m population @ 6%). It's closer to 8% of the adult US population. Not very many people under 18 are millionaires or reasonably likely to be. The non-adults in question fall under the millionaire household grouping. And if anyone is interested in the household wealth distribution (as of 1Q21): Top 1%: $41.5 trillion | 90%-99%: $48.8 trillion | 50-90%: $36.5 trillion | bottom 50%: $2.6 trillion $129.5 trillion total household assets. There are around 128 million households in the US. The average American household is now worth a million dollars (the median is obviously far lower). That top 1% of US households - 1.28 million households - holds an average of roughly $32 million in assets.
- alephnan 5y ago
  > "barely middle class". Inflation. Being a millionaire or having a six figure salaries used to have much more weight during the 80s. Pretty much any senior level engineer at FANG can be a millionaire if they saved, but they can barely afford a standalone home in San Francisco. What does the term 'middle class' even mean if they can't afford a home? Only 20% of millionaires surveyed feel they're rich. https://www.cnbc.com/2021/05/12/net-worth-to-be-considered-wealthy-in-2021.html https://www.cnbc.com/2021/05/12/net-worth-to-be-considered-w...
  - mywittyname 5y ago
trutannus 5y ago
> The best thing to do is forbid them re-entry into the country Given the track-record lefty authoritarianism has, I'm always a little nauseated to see people pull out the truncheon and jack-boots to enforce "economic justice". That and suggestions like this don't even make any sense, and rarely ever do. It always looks to me like retribution is the aim here, rather than effective economic policy.
- papito 5y ago
  Well, now, let's not paint "authoritarianism" as "lefty". Some Marx-reading student on campus is not exactly a threat, is it? The ultra-left sentiment is, indeed, anti-liberal at its core, but it is still an irrelevant fringe. The actual, viable threat of authoritarianism is coming from the opposite side, which is a spit away from holding absolute power, here in the States, at least. And then, it's on.
  - trutannus 5y ago
    This is a complete misrepresentation of my point. I never tried to 'paint "authoritarianism" as "lefty"'. I specified there's an issue with lefties who are also authoritarians. If you don't think that can exist and if you think it's not that big of a deal, I suggest you take a look at the latter-half of the 20th century. It's pretty uncharitable to paint my argument as being afraid of a student on a campus who's read the Communist Manifesto. That's not even in my argument and requires a lot of bad-faith interpolation to get to from what I said. > viable threat of authoritarianism is coming from the opposite side This is nothing more than whataboutism. There's authoritarians on both sides. They're both just as dangerous in the end-game. In Canada, it's the left mainly. In the US, there's highly vocal, and influential to public opinion, left wing authoritarians. In Canada lefty authoritarianism isn't just a fringe, it's mainstream. This is true in a lot of places too. I'm not sure why some folks insist on downplaying the risk of authoritarianism when it comes from the left as opposed to the right. Both kill just as many people, one just uses gas where the other uses starvation.
    - papito 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!