More American Expatriates Give Up Citizenship - NYTimes.com.
Fascinating report:
Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.
You'd have thought this would mean this is a big issue to get such prominence. But then note it adds:
The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.
Let's put this another way. This is a non-issue. Tiny numbers of people move for tax. Tiny numbers of people give up citizenship for tax. It's safe to conclude they're in the minority also lacking any sound judgement. In which case this issue can safely be ignored as irrelevant - which is what it is.
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Richard
Furthermore, for the portion of the 502 which is the “the permanent residents” (who are not citizens), we can be pretty sure that most of them moved out of the US for reasons other than tax.
There are many many “green card holders” who intend to permanently move back to their home countries, or move to some other country in the short or medium term. I am one of these people.
Note that the Permanent Residents lose their Green Cards shortly after they move out of the US, unlike the US citizens quoted in the article (I am simplifying).
So there was no reason to include Permanent Residents in the numbers, other than to increase them.
So the number of people moving for ‘tax reasons’ is likely to be less than half of 502. Its 50% of a vanishingly small number.
Also the article strangely ignores double taxation arrangements. Generally speakin these result in the tax payer paying no more than the higher of taxes due in the US and the new home country (mostly Switzerland in this article).
On the other hand most of the complaints made in the article are made, not about tax rates, but about the burden of administration arising from the Worldwide taxation principle (this is unique to the US, isn’t it?) and difficulties opening bank accounts due to anti-terrorism laws.
I think its true to say that filing US taxes is staggeringly complex and nightmarish – much worse than in the UK – and I would support all efforts to simplify it.
Of course the reason it is so, is because of all sorts of ill-judged exemptions and tax breaks that won’t be removed for politic reasons. Its one artifact of a political system entirely subservient to the lobbyists.
You conveniently omit to mention that Us citizens reamin liable for federal tax for 10 years after renouncing their citizenships (the same applies to Green Card holders who have been resident for more than 5 years).
People do not give up their citizenship because they do not seen the point. If there was not this 10-year dealy, amny more would do it.
Please refrain from commenting on US issues. You are terribly under-qualified to do so, and you should know your limitations better.
@Colman Stephenson
Well argued
@Ted G
Let me be unambiguous
If I stopped your comments when they revealed your incompetence I would never let you on here
You are so incompetent you have not even realised this was not a comment on US tax per se, it was a comment that a statistic, which as Colman says almost certainly does not relate to tax has been spun to make a story which claims there is a tax exodus. There is no tax exodus.
That was the point of my comment. It was to highlight a wholly inappropriate spin to claim that tax is leading to people leaving
They’re not
That did not need me to know about US tax – although as it so happens I actually got the story right – exactly right – on that point too
So please do not lecture me
Yesterday we learned it was wrong to call someone a bigot when they are. I don’t agree
So I’ll be as clear as Gordon Brown was. You’re so bigoted you can’t even read a story correctly.
Is that clear enough?