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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 lo

by 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.
- rory 5y ago
  I'm asking simply as a thought experiment. And the reason to stop it is obvious-- to procure other taxes from those people. For example, many jurisdictions don't have an inheritance tax, and the US Gov't would likely want that cut upon the (ex?)-citizen's death.
  - s1artibartfast 5y ago
    >how could the US government stop this from happening. Lots of simple solutions if we look at other countries that restrict emigration. USSR and North Korea had models that worked pretty well. High boarder security, labor camps, family punishment, and asset seizure. These could all keep people working and generating tax revenue in the US when they want to leave. On a practical level, I think the idea of coercing people to stay in the USA would be unpopular, especially when contrasted with the current wealth tax on exit.
mytailorisrich 5y ago
> how could the US government stop this from happening? By taxing based on residency, not citizenship, like pretty much all other countries on Earth. People have the right to lower their tax liability within the law, they have the right to move, and they have the right to renounce citizenship (if they have another one). We're not going to prevent any of that from happening. The only thing the US can do is to remove the incentive to renounce citizenship if they think that this is a problem.
- jkepler 5y ago
  Do you have a citation where US (federal) law requires one to have a foreign citizenship in order to renounce US citizenship? Or, would it be possible to renounce US citizenship without foreign citizenship, perhaps while maintaining citizenship in one's state of origin in one of the seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—which levy no state income tax, or in one of the two others, New Hampshire and Tennessee, which don't tax earned wages? In other words, could one reside overseas but maintain a tie with a particular state within the USA without any relationship to the federal government?
  - rory 5y ago
    Wouldn't you not have a passport in that case? So presumably you would never be able to get back to the state you have a tie to, right? Seems like a tenuous circumstance.
  - mytailorisrich 5y ago
    Ah, well according to Google the US are one of the few countries that does not require another citizenship in order to let you renounce citizenship. So, indeed you could renounce US citizenship without having any other one... But that would make you stateless, without passport, etc. which does not sound like a good idea.

by rory 5y ago

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.

rory 5y ago
I'm asking simply as a thought experiment. And the reason to stop it is obvious-- to procure other taxes from those people. For example, many jurisdictions don't have an inheritance tax, and the US Gov't would likely want that cut upon the (ex?)-citizen's death.
- s1artibartfast 5y ago
  >how could the US government stop this from happening. Lots of simple solutions if we look at other countries that restrict emigration. USSR and North Korea had models that worked pretty well. High boarder security, labor camps, family punishment, and asset seizure. These could all keep people working and generating tax revenue in the US when they want to leave. On a practical level, I think the idea of coercing people to stay in the USA would be unpopular, especially when contrasted with the current wealth tax on exit.

mytailorisrich 5y ago

> how could the US government stop this from happening? By taxing based on residency, not citizenship, like pretty much all other countries on Earth. People have the right to lower their tax liability within the law, they have the right to move, and they have the right to renounce citizenship (if they have another one). We're not going to prevent any of that from happening. The only thing the US can do is to remove the incentive to renounce citizenship if they think that this is a problem.

jkepler 5y ago
Do you have a citation where US (federal) law requires one to have a foreign citizenship in order to renounce US citizenship? Or, would it be possible to renounce US citizenship without foreign citizenship, perhaps while maintaining citizenship in one's state of origin in one of the seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—which levy no state income tax, or in one of the two others, New Hampshire and Tennessee, which don't tax earned wages? In other words, could one reside overseas but maintain a tie with a particular state within the USA without any relationship to the federal government?
- rory 5y ago
  Wouldn't you not have a passport in that case? So presumably you would never be able to get back to the state you have a tie to, right? Seems like a tenuous circumstance.
- mytailorisrich 5y ago
  Ah, well according to Google the US are one of the few countries that does not require another citizenship in order to let you renounce citizenship. So, indeed you could renounce US citizenship without having any other one... But that would make you stateless, without passport, etc. which does not sound like a good idea.