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Some friends of mine are yelling "see? our tax code is pushing capital overseas!" My argument is, that with $4B at stake, even if we had a "reasonable" income t

Some friends of mine are yelling "see? our tax code is pushing capital overseas!" My argument is, that with $4B at stake, even if we had a "reasonable" income tax, people like this would still seek out tax havens where the burden is even lower still.

DanielBMarkham 14y ago
So you agree with your friends that people act in their best interests, including changing citizenship, when it comes to taxes, you just disagree on the amount of money it would take?
- _delirium 14y ago
  I don't think it's true for the vast majority of people. Most Americans, including most wealthy Americans, are happy to be Americans, even if they aren't happy about everything in the US. Rejecting your home country for monetary reasons is a fairly drastic action, and only a very small number of people take it. I mean, you don't see Bill Gates moving to Monaco or anything. Not even very-rich people with libertarian politics, like Larry Ellison or the Koch brothers, are itchin' to leave the country. In fact the number is even smaller than the raw number of renunciations. A spot-check at the list of renunciations suggests that most are actually people who in practice ceased to be Americans long ago, or in some cases never were. Some were born overseas to American parents and have never lived in the US; one actor on the list is of Italian origin and moved back to Italy 40 years ago; etc. Apart from a tiny handful of cases, it seems more like formalizing situations that already exist (people who aren't really Americans just making it formal). A number are also people applying for citizenships in countries that don't recognize dual citizenship, who are required to renounce their American citizenship to do so.
- gammarator 14y ago
  People regularly choose against their own best interests due to perceived obligations to family, organization, country, etc.
gyardley 14y ago
Surely the number of people who would renounce their citizenship to save a small portion of their income is smaller than the number of people who would renounce their citizenship to save a large portion of their income.
cynicalkane 14y ago
To a multibillionaire, the value of retaining American citizenship could easily be hundreds of millions of dollars. Or it might be much lower in that. The degree of which citizens seek tax havens will be proportional to the level of taxation, not a black-and-white yes-or-no thing.
- grandalf 14y ago
  For a rich person the costs of moving (and other transaction costs) are far less... arguably if the transaction costs were lower (walk across the border to a waiting job) lots more people would do it at far lower income/tax levels.
- liber8 14y ago
  I would argue the opposite. To someone with several billion dollars, citizenship probably doesn't matter all that much. To someone with a couple million dollars, having that U.S. flag on their passport does afford a great deal of freedom and security. But, with several billion, you can pretty much buy all the freedom and security you can get.
shasta 14y ago
We should give people a number of votes proportional to how much money they have, to give wealthy people more incentive to stay.
- clueless123 14y ago
  That is a joke right? (I really hope so)
  - planetguy 14y ago
    Personally I'm in favour of a system where it's done both ways. Most countries have a bicameral legislature in which one branch is a bit of a joke. My idea is that there should be a "House of Representatives" and a "House of Taxpayers", both of whom need to sign off on any bill. In the election for the House of Representatives, everyone gets an equal vote. In the election for the House of Taxpayers, everyone gets a vote precisely proportional to how much tax they pay. That way, the interests of everybody are balanced -- the folks who are affected by a new law and the folks who have to pay for the new law have both signed off on it. It's a pipe dream, I know, but it'd be nice to see a country where the most competent citizens are appreciated rather than punished.
    - alain94040 14y ago
      Why single-out the taxpayers? Do you also need a house for the poor (they surely are impacted by laws)? What about minorities? Etc.
waterlesscloud 14y ago
The article also references new changes in US laws that require even foreign institutions holding funds from US citizens to meet very strict reporting requirements on those funds. In response, some institutions are simply refusing to take funds from US citizens rather than accept what they see as the onerous burden of complying with these reporting requirements.

DanielBMarkham 14y ago

So you agree with your friends that people act in their best interests, including changing citizenship, when it comes to taxes, you just disagree on the amount of money it would take?

_delirium 14y ago
I don't think it's true for the vast majority of people. Most Americans, including most wealthy Americans, are happy to be Americans, even if they aren't happy about everything in the US. Rejecting your home country for monetary reasons is a fairly drastic action, and only a very small number of people take it. I mean, you don't see Bill Gates moving to Monaco or anything. Not even very-rich people with libertarian politics, like Larry Ellison or the Koch brothers, are itchin' to leave the country. In fact the number is even smaller than the raw number of renunciations. A spot-check at the list of renunciations suggests that most are actually people who in practice ceased to be Americans long ago, or in some cases never were. Some were born overseas to American parents and have never lived in the US; one actor on the list is of Italian origin and moved back to Italy 40 years ago; etc. Apart from a tiny handful of cases, it seems more like formalizing situations that already exist (people who aren't really Americans just making it formal). A number are also people applying for citizenships in countries that don't recognize dual citizenship, who are required to renounce their American citizenship to do so.
gammarator 14y ago
People regularly choose against their own best interests due to perceived obligations to family, organization, country, etc.

gyardley 14y ago

Surely the number of people who would renounce their citizenship to save a small portion of their income is smaller than the number of people who would renounce their citizenship to save a large portion of their income.

cynicalkane 14y ago

To a multibillionaire, the value of retaining American citizenship could easily be hundreds of millions of dollars. Or it might be much lower in that. The degree of which citizens seek tax havens will be proportional to the level of taxation, not a black-and-white yes-or-no thing.

grandalf 14y ago
For a rich person the costs of moving (and other transaction costs) are far less... arguably if the transaction costs were lower (walk across the border to a waiting job) lots more people would do it at far lower income/tax levels.
liber8 14y ago
I would argue the opposite. To someone with several billion dollars, citizenship probably doesn't matter all that much. To someone with a couple million dollars, having that U.S. flag on their passport does afford a great deal of freedom and security. But, with several billion, you can pretty much buy all the freedom and security you can get.

shasta 14y ago

We should give people a number of votes proportional to how much money they have, to give wealthy people more incentive to stay.

clueless123 14y ago
That is a joke right? (I really hope so)
- planetguy 14y ago
  Personally I'm in favour of a system where it's done both ways. Most countries have a bicameral legislature in which one branch is a bit of a joke. My idea is that there should be a "House of Representatives" and a "House of Taxpayers", both of whom need to sign off on any bill. In the election for the House of Representatives, everyone gets an equal vote. In the election for the House of Taxpayers, everyone gets a vote precisely proportional to how much tax they pay. That way, the interests of everybody are balanced -- the folks who are affected by a new law and the folks who have to pay for the new law have both signed off on it. It's a pipe dream, I know, but it'd be nice to see a country where the most competent citizens are appreciated rather than punished.
  - alain94040 14y ago
    Why single-out the taxpayers? Do you also need a house for the poor (they surely are impacted by laws)? What about minorities? Etc.

waterlesscloud 14y ago

The article also references new changes in US laws that require even foreign institutions holding funds from US citizens to meet very strict reporting requirements on those funds. In response, some institutions are simply refusing to take funds from US citizens rather than accept what they see as the onerous burden of complying with these reporting requirements.