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I'm conflicted on the idea of leaving the country as a solution. Its not enough to simply live and work in another country -- you're still liable for taxes. Y

by srdev 15y ago

I'm conflicted on the idea of leaving the country as a solution. Its not enough to simply live and work in another country -- you're still liable for taxes. You have to fully expatriate and renounce your citizenship. This is often very difficult and time-consuming to do, and near-impossible if you're not in a skilled line of work.

splat 15y ago
Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.
- srdev 15y ago
  Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)
  - nirvana 15y ago
    For US citizens, to renounce you need to prove that you've paid all income taxes over the previous 5 years, pay an excise taxes on all assets being taken out of the country (which I think is %1-2%) and -- here's the kicker-- get permission of the federal government to be allowed to renounce your citizenship. If they think your earning power is significant enough, they can deny you by claiming your "renouncing to avoid taxes". However, if you live outside the USA full time, I believe that the personal exemption on income is around $80,000. So even if you're making millions, if you pay yourself $80k or less, you can avoid income taxes in the US on your worldwide income. Thus, holding stock in a startup that is appreciating avoids taxation, however, if you ever sell that stock, then you'd be realizing the gain and run into the issue. PS - of course you're right that some countries simply won't allow you to renounce, and that might even end up being the case for some US citizens. I'm just giving the information I've been able to gather on this topic, not really disagreeing with you.
gyardley 15y ago
I'm still a Canadian citizen, but because I don't live in Canada, don't have assets in Canada, and don't earn income in Canada, I don't pay taxes in Canada. As far as I know, being taxed on worldwide income is just an American thing.
- burgerbrain 15y ago
  It is just an American thing. And it's a great example of why "if you don't like it, leave it" is bullshit particularly when spoken in the context of American politics.
  - philwelch 15y ago
    If you don't like it, leave it and then renounce your citizenship.
    - burgerbrain 15y ago
      Clearly you have not been paying attention.

by srdev 15y ago

splat 15y ago

Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.

srdev 15y ago
Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)
- nirvana 15y ago
  For US citizens, to renounce you need to prove that you've paid all income taxes over the previous 5 years, pay an excise taxes on all assets being taken out of the country (which I think is %1-2%) and -- here's the kicker-- get permission of the federal government to be allowed to renounce your citizenship. If they think your earning power is significant enough, they can deny you by claiming your "renouncing to avoid taxes". However, if you live outside the USA full time, I believe that the personal exemption on income is around $80,000. So even if you're making millions, if you pay yourself $80k or less, you can avoid income taxes in the US on your worldwide income. Thus, holding stock in a startup that is appreciating avoids taxation, however, if you ever sell that stock, then you'd be realizing the gain and run into the issue. PS - of course you're right that some countries simply won't allow you to renounce, and that might even end up being the case for some US citizens. I'm just giving the information I've been able to gather on this topic, not really disagreeing with you.

gyardley 15y ago

I'm still a Canadian citizen, but because I don't live in Canada, don't have assets in Canada, and don't earn income in Canada, I don't pay taxes in Canada. As far as I know, being taxed on worldwide income is just an American thing.

burgerbrain 15y ago
It is just an American thing. And it's a great example of why "if you don't like it, leave it" is bullshit particularly when spoken in the context of American politics.
- philwelch 15y ago
  If you don't like it, leave it and then renounce your citizenship.
  - burgerbrain 15y ago
    Clearly you have not been paying attention.