4 ms·

Good points, but regarding moving states - that doesn't address large federal taxes, or taxes on things that aren't taxed in other countries (death tax, gift ta

by mech4bg 13y ago

Good points, but regarding moving states - that doesn't address large federal taxes, or taxes on things that aren't taxed in other countries (death tax, gift tax).

mikeyouse 13y ago
True, but if tax regime had a significant impact on migration, it should have an incremental impact at all scales, offset by the expense / difficulty of actually migrating. If one lives in California and earns enough to be in the top bracket (>$1mm/year), they could save a marginal 10% by relocating to Nevada. It's only a four hour drive to Tahoe, so you would expect to see a fair portion of people doing so. However, there is almost no evidence that this actually occurs. Expatriation is just migration on a larger scale. The expense and complexity are obviously higher, but the basic incentives are identical. I have no doubt that at some very-high net worth, it makes sense to renounce and move abroad, but is it worth wasting energy on the few people a year who will do so?
- dalke 13y ago
  "Is expatriation increasing? Maybe? Who knows with this quality of reporting." It certainly is. With this reporting it was very easy to find the actual list, which is at https://www.federalregister.gov/articles/2013/05/08/2013-10852/quarterly-publication-of-individuals-who-have-chosen-to-expatriate https://www.federalregister.gov/articles/2013/05/08/2013-108... . (Though "LOCKE-TECKEMEIER LORETTA ULLRICH" and "LOCKE-TECKMEIER LORETTA U." are likely the same person, so the count won't be perfect.) With a bit of work, you can easily verify if the number is increasing. "If people aren't taking the easy step and relocating to different states due to tax differences..." A different logic is much more likely. There are Americans who have already relocated overseas and some decades later renounce their citizenship. Consider Corine Mauch, the Iowa born mayor of Zurich. “My relationship with the U.S. is limited to my very early youth,”. "[S]he regards Switzerland as her home and doesn’t want to deal with Internal Revenue Service paperwork, according to an e- mailed statement from her office today." http://www.bloomberg.com/news/2013-04-18/zurich-mayor-renounces-u-s-citizenship-amid-tighter-tax-rules.html http://www.bloomberg.com/news/2013-04-18/zurich-mayor-renoun... . You're right; it's hard to tell if someone renounced citizenship in order to avoid paying US taxes. Indeed, there are other reasons for doing so. Someone running for the legislature of another country may be required to renounce all other citizenships. But given the rather rapid rise in renunciations, correlated with the increase in tax reporting and compliance policies, it's a pretty reasonable conclusion. In any case, the US policies both real (the Reed amendment) and proposed (the Ex-Patriot Act) are rather harsh on people who renounce for tax reasons, so it will be hard to carry out a study where you ask people if that's the basis for their decision. (You'll see that Mauch carefully did not say that she left because of taxation reasons.) "Expatriation is just migration on a larger scale." Your example, with two US states, isn't the same comparison. Better would be to think of a California resident who moves to Nevada, never goes back to California, but still has to pay California taxes. "is it worth wasting energy on the few people a year who will do so" No. Absolutely not. But there's a few other issues at play. For example, the reason for the heightened tax reporting policies is to crack down on US residents with overseas bank accounts, who use those accounts to avoid paying US taxes. Ex-pats (who have no strong representation in Congress), are caught in the cross-fire.
  - mikeyouse 13y ago
    With this reporting it was very easy to find the actual list, which is at .... (Though "LOCKE-TECKEMEIER LORETTA ULLRICH" and "LOCKE-TECKMEIER LORETTA U." are likely the same person, so the count won't be perfect.) With a bit of work, you can easily verify if the number is increasing. That's much of my point, I went looking at the source, to check for myself. But the best case scenario is aggregating a series of CSV files which you have to locate manually, something an actual news article would have done for themselves. Further analysis would be to move past the absolute number of citizens dropping citizenship and perhaps calculate the proportion of citizens doing so. We could even hope to run some simple tests to determine if the number of expats was statistically significant. Instead we get none of that, just a vague, "Taxes are complicated, expats are increasing, trust me." It's very disappointing.
    - dalke 13y ago
      You want something between the raw data and the digested summary provided by the news service? That's expensive. Who should pay for it? For the most part, I agree with your view. There's almost no deep analysis of the reasons for renunciation. That analysis is hard. It's going to be a variety of factors. Given the political tone behind the (unenforced) Reed amendment and the (proposed) Ex-PATRIOT act, anyone reasonable would avoid bringing up the non-tax-avoiding reasons and emphasize the other reasons. But your view is that we can't make any inferences. I disagree. We have the raw numbers - there's no need to trust people for that. It might not be as easy as you like, but it's at most an evening of work. (Less if you trust graphs like http://finance.yahoo.com/news/should-you-renounce-your-citizenship-144048875.html http://finance.yahoo.com/news/should-you-renounce-your-citiz... ). There's no need to "calculate the proportion of citizens doing so." As the article reports, "From 2009 to 2011, the number of expatriates, or those who renounced their U.S. citizenship, doubled to 1,781." The number of US citizens did not double in two years. Including a population analysis in this news article would be a distracting tangent stating the obvious. Those raw numbers show a big increase in 2010. That's when the US reporting law went into effect. You insist on some statistical analysis, but in my readings, no one has come up with a better explanation for the increase - what tests should people do? Correlated it with Bieber Fever? We can't get meaning from those numbers, and it's hard to get that information directly from the people, but we can ask people who generally give international tax advice. Biased though it might be, that's what this CNN article does. In fact, it gives a specific and reasonable example of why someone may renounce their US citizenship, because of tax purposes: "growing numbers of Middle Eastern investors were ordering their dual-citizen children to dump their U.S. passports if they wanted to inherit family-owned companies without onerous U.S. estate taxes". This is not vague, though it is from a secondary source. Therefore I persist in correcting you. This article gives enough information to draw the reasonable conclusion - affirmed by other data - that 1) renunciations are increasing and 2) that the US tax laws are a likely factor.

by mech4bg 13y ago

Good points, but regarding moving states - that doesn't address large federal taxes, or taxes on things that aren't taxed in other countries (death tax, gift tax).

mikeyouse 13y ago

True, but if tax regime had a significant impact on migration, it should have an incremental impact at all scales, offset by the expense / difficulty of actually migrating. If one lives in California and earns enough to be in the top bracket (>$1mm/year), they could save a marginal 10% by relocating to Nevada. It's only a four hour drive to Tahoe, so you would expect to see a fair portion of people doing so. However, there is almost no evidence that this actually occurs. Expatriation is just migration on a larger scale. The expense and complexity are obviously higher, but the basic incentives are identical. I have no doubt that at some very-high net worth, it makes sense to renounce and move abroad, but is it worth wasting energy on the few people a year who will do so?

dalke 13y ago
"Is expatriation increasing? Maybe? Who knows with this quality of reporting." It certainly is. With this reporting it was very easy to find the actual list, which is at https://www.federalregister.gov/articles/2013/05/08/2013-10852/quarterly-publication-of-individuals-who-have-chosen-to-expatriate https://www.federalregister.gov/articles/2013/05/08/2013-108... . (Though "LOCKE-TECKEMEIER LORETTA ULLRICH" and "LOCKE-TECKMEIER LORETTA U." are likely the same person, so the count won't be perfect.) With a bit of work, you can easily verify if the number is increasing. "If people aren't taking the easy step and relocating to different states due to tax differences..." A different logic is much more likely. There are Americans who have already relocated overseas and some decades later renounce their citizenship. Consider Corine Mauch, the Iowa born mayor of Zurich. “My relationship with the U.S. is limited to my very early youth,”. "[S]he regards Switzerland as her home and doesn’t want to deal with Internal Revenue Service paperwork, according to an e- mailed statement from her office today." http://www.bloomberg.com/news/2013-04-18/zurich-mayor-renounces-u-s-citizenship-amid-tighter-tax-rules.html http://www.bloomberg.com/news/2013-04-18/zurich-mayor-renoun... . You're right; it's hard to tell if someone renounced citizenship in order to avoid paying US taxes. Indeed, there are other reasons for doing so. Someone running for the legislature of another country may be required to renounce all other citizenships. But given the rather rapid rise in renunciations, correlated with the increase in tax reporting and compliance policies, it's a pretty reasonable conclusion. In any case, the US policies both real (the Reed amendment) and proposed (the Ex-Patriot Act) are rather harsh on people who renounce for tax reasons, so it will be hard to carry out a study where you ask people if that's the basis for their decision. (You'll see that Mauch carefully did not say that she left because of taxation reasons.) "Expatriation is just migration on a larger scale." Your example, with two US states, isn't the same comparison. Better would be to think of a California resident who moves to Nevada, never goes back to California, but still has to pay California taxes. "is it worth wasting energy on the few people a year who will do so" No. Absolutely not. But there's a few other issues at play. For example, the reason for the heightened tax reporting policies is to crack down on US residents with overseas bank accounts, who use those accounts to avoid paying US taxes. Ex-pats (who have no strong representation in Congress), are caught in the cross-fire.
- mikeyouse 13y ago
  With this reporting it was very easy to find the actual list, which is at .... (Though "LOCKE-TECKEMEIER LORETTA ULLRICH" and "LOCKE-TECKMEIER LORETTA U." are likely the same person, so the count won't be perfect.) With a bit of work, you can easily verify if the number is increasing. That's much of my point, I went looking at the source, to check for myself. But the best case scenario is aggregating a series of CSV files which you have to locate manually, something an actual news article would have done for themselves. Further analysis would be to move past the absolute number of citizens dropping citizenship and perhaps calculate the proportion of citizens doing so. We could even hope to run some simple tests to determine if the number of expats was statistically significant. Instead we get none of that, just a vague, "Taxes are complicated, expats are increasing, trust me." It's very disappointing.
  - dalke 13y ago
    You want something between the raw data and the digested summary provided by the news service? That's expensive. Who should pay for it? For the most part, I agree with your view. There's almost no deep analysis of the reasons for renunciation. That analysis is hard. It's going to be a variety of factors. Given the political tone behind the (unenforced) Reed amendment and the (proposed) Ex-PATRIOT act, anyone reasonable would avoid bringing up the non-tax-avoiding reasons and emphasize the other reasons. But your view is that we can't make any inferences. I disagree. We have the raw numbers - there's no need to trust people for that. It might not be as easy as you like, but it's at most an evening of work. (Less if you trust graphs like http://finance.yahoo.com/news/should-you-renounce-your-citizenship-144048875.html http://finance.yahoo.com/news/should-you-renounce-your-citiz... ). There's no need to "calculate the proportion of citizens doing so." As the article reports, "From 2009 to 2011, the number of expatriates, or those who renounced their U.S. citizenship, doubled to 1,781." The number of US citizens did not double in two years. Including a population analysis in this news article would be a distracting tangent stating the obvious. Those raw numbers show a big increase in 2010. That's when the US reporting law went into effect. You insist on some statistical analysis, but in my readings, no one has come up with a better explanation for the increase - what tests should people do? Correlated it with Bieber Fever? We can't get meaning from those numbers, and it's hard to get that information directly from the people, but we can ask people who generally give international tax advice. Biased though it might be, that's what this CNN article does. In fact, it gives a specific and reasonable example of why someone may renounce their US citizenship, because of tax purposes: "growing numbers of Middle Eastern investors were ordering their dual-citizen children to dump their U.S. passports if they wanted to inherit family-owned companies without onerous U.S. estate taxes". This is not vague, though it is from a secondary source. Therefore I persist in correcting you. This article gives enough information to draw the reasonable conclusion - affirmed by other data - that 1) renunciations are increasing and 2) that the US tax laws are a likely factor.