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The U.S. has a citizenship-based taxation system, so citizens must pay taxes regardless of residence. The U.S. shares this policy with exactly one other country

by ahelwer 14y ago

The U.S. has a citizenship-based taxation system, so citizens must pay taxes regardless of residence. The U.S. shares this policy with exactly one other country in the world, Eritrea. You can critique this policy (and many do), but this new Schumer proposal is an extension of it, not a change in direction.

recursive 14y ago
We're not talking about citizens paying taxes. We're talking about ex-citizens. I seem to recall hearing something about "no taxation without representation" somewhere before.
- sp332 14y ago
  Well I don't think that resigning your citizenship means that you don't have to pay any taxes for that year. And if he didn't pay any taxes on the stocks he owns, that would be a much larger dodge of >$600 million. So people who have left the country within the last year still have to pay taxes on their earnings.
- roc 14y ago
  Wasn't he a US citizen when he sued in US court for proper recognition and partial ownership? It seems only fair to pay American tax on the fruit of that windfall. How far would his case against Zuckerberg have gone if he'd filed it in Singapore?
  - sp332 14y ago
    He's already paying the 15% capital gains tax on the stock that he owns, which comes to about $500MM. The $170MM must be referring to something else.
  - beagle3 14y ago
    You can file in a US court even if you are not a US citizen, you know -- it's not like US people are given a carte blanche to cheat other nations.
    - onetwothreefour 14y ago
      Dude, you wouldn't want to bring logic and facts into this debate, let alone questioning THE GREATEST NATION ON EARTH. :) What the hell happened to HN?
    - roc 14y ago
      I'll be the first to admit that I don't know how jurisdiction would work in a case like that. But it seems to me that paying taxes on money recovered for you by a legal system is a fair price for the service. If the legal system was corrupt or inefficient, he'd never have gotten his money. It only seems fair to pay to support it. Particularly given the fairly low tax rate. There are precious few places and ways you can earn hundreds of millions of dollars and only pay 15% on them. That said, it sounds like he has paid tax once and is possibly trying to avoid paying tax on the appreciation of that property, which I will also admit muddies the waters quite a bit.
      - beagle3 14y ago
        > But it seems to me that paying taxes on money recovered for you by a legal system is a fair price for the service. Basically, you can use the US court system even if you never once set foot in the US, and never had a US passport - as long as the party you are suing is bound by US law. Theoretically, the outcome should be the same. I'm not sure what the tax consequences are, but in general, if you get a remedy from the court, the tax is the same as the original transaction (possibly none).
jonknee 14y ago
He doesn't live here and isn't a citizen. The number of non-native, former citizens who end up to be instant billionaires has to be a very small group (likely a party of 1)... To make any law that addresses it is inane.
- ChuckMcM 14y ago
  Of course it is, but it plays well with the 'tax the rich' folks. Schumer isn't really proposing legitimate legislation, he's campaigning for votes. One technique he uses is to propose legislation that can't pass the full senate, much less the whole process of getting into law, so that the big headlines like these will get folks who want to 'stick it to the rich' to vote for him. Sadly, this is an effective technique. A number of California state representatives use it as well.
jlcx 14y ago
My interpretation of that would be that if we already have one of the world's harshest tax policies in that regard, why would we want to have a reputation for being even worse? Do we want to make productive foreigners even more wary of acquiring US citizenship?
- to3m 14y ago
  YES SIR WEE DO,,, THEIR STEELING ARE JOBBS
- sethg 14y ago
  Before Eduardo Savarin was a US citizen, he wasn’t a productive foreigner; he was a teenager who had been targeted for kidnapping in his native Brazil. (http://pandodaily.com/2012/05/12/what-eduardo-saverin-owes-america-hint-nearly-everything/ http://pandodaily.com/2012/05/12/what-eduardo-saverin-owes-a...) His father was a wealthy businessman (which is why Eduardo had been kidnap-worthy), but I don’t know if he was wealthy enough to qualify for immigration to Singapore.

by ahelwer 14y ago

recursive 14y ago

We're not talking about citizens paying taxes. We're talking about ex-citizens. I seem to recall hearing something about "no taxation without representation" somewhere before.

sp332 14y ago
Well I don't think that resigning your citizenship means that you don't have to pay any taxes for that year. And if he didn't pay any taxes on the stocks he owns, that would be a much larger dodge of >$600 million. So people who have left the country within the last year still have to pay taxes on their earnings.
roc 14y ago
Wasn't he a US citizen when he sued in US court for proper recognition and partial ownership? It seems only fair to pay American tax on the fruit of that windfall. How far would his case against Zuckerberg have gone if he'd filed it in Singapore?
- sp332 14y ago
  He's already paying the 15% capital gains tax on the stock that he owns, which comes to about $500MM. The $170MM must be referring to something else.
- beagle3 14y ago
  You can file in a US court even if you are not a US citizen, you know -- it's not like US people are given a carte blanche to cheat other nations.
  - onetwothreefour 14y ago
    Dude, you wouldn't want to bring logic and facts into this debate, let alone questioning THE GREATEST NATION ON EARTH. :) What the hell happened to HN?
  - roc 14y ago
    I'll be the first to admit that I don't know how jurisdiction would work in a case like that. But it seems to me that paying taxes on money recovered for you by a legal system is a fair price for the service. If the legal system was corrupt or inefficient, he'd never have gotten his money. It only seems fair to pay to support it. Particularly given the fairly low tax rate. There are precious few places and ways you can earn hundreds of millions of dollars and only pay 15% on them. That said, it sounds like he has paid tax once and is possibly trying to avoid paying tax on the appreciation of that property, which I will also admit muddies the waters quite a bit.
    - beagle3 14y ago
      > But it seems to me that paying taxes on money recovered for you by a legal system is a fair price for the service. Basically, you can use the US court system even if you never once set foot in the US, and never had a US passport - as long as the party you are suing is bound by US law. Theoretically, the outcome should be the same. I'm not sure what the tax consequences are, but in general, if you get a remedy from the court, the tax is the same as the original transaction (possibly none).

jonknee 14y ago

He doesn't live here and isn't a citizen. The number of non-native, former citizens who end up to be instant billionaires has to be a very small group (likely a party of 1)... To make any law that addresses it is inane.

ChuckMcM 14y ago
Of course it is, but it plays well with the 'tax the rich' folks. Schumer isn't really proposing legitimate legislation, he's campaigning for votes. One technique he uses is to propose legislation that can't pass the full senate, much less the whole process of getting into law, so that the big headlines like these will get folks who want to 'stick it to the rich' to vote for him. Sadly, this is an effective technique. A number of California state representatives use it as well.

jlcx 14y ago

My interpretation of that would be that if we already have one of the world's harshest tax policies in that regard, why would we want to have a reputation for being even worse? Do we want to make productive foreigners even more wary of acquiring US citizenship?

to3m 14y ago
YES SIR WEE DO,,, THEIR STEELING ARE JOBBS
sethg 14y ago
Before Eduardo Savarin was a US citizen, he wasn’t a productive foreigner; he was a teenager who had been targeted for kidnapping in his native Brazil. (http://pandodaily.com/2012/05/12/what-eduardo-saverin-owes-america-hint-nearly-everything/ http://pandodaily.com/2012/05/12/what-eduardo-saverin-owes-a...) His father was a wealthy businessman (which is why Eduardo had been kidnap-worthy), but I don’t know if he was wealthy enough to qualify for immigration to Singapore.