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As we approach the July 4th holiday that inspires our most patriotic thoughts, it’s hard to imagine that any American would voluntarily give up his or her citizenship. But perhaps the politicians are starting to understand that the taxpaying public is growing wary of being fleeced, either through increased taxes or the stealth tax of inflation, as a way to repay all the debt that Washington has incurred. And in preparation for the possibility that Americans might rebel at the debt and taxes incurred by their government, they’ve just passed a new law that will stop your capital — or at least a good portion of it — at the border, should you decide to leave. You probably didn’t notice this little provision inserted into the Heroes Act of 2008, passed by Congress on June 17. The headlines in the press release about the law were about the increased benefits for veterans and families of deceased military.
But Richard Kohan of Price WaterhouseCoopers drew my attention to one section of the act — the portion that states anyone voluntarily giving up his or her citizenship will be taxed on ALL of his assets as if he or she had sold them — paying capital gains on assets that have increased in value, even though they have not been sold! That’s right. While everyone in the media is focused on keeping aliens out of America, Congress has voted to lock its citizens — or at least a good portion of their assets — into — America! Maybe they’re thinking that patriotism won’t be enough to keep the smart money from recognizing the coming increases in the tax burden.
Don’t you just love the way they slip these laws right past your nose. I mean, who would argue with something called the Heroes Act?
I don’t I saw it on CNN.
This is not an unusual step for a totalitarian gov’t. It’s the 1st step in making it illegal to leave. All communist states did this type of thing. Pass enough laws to steal citizens money & property and people start leaving. Next step preemptive confiscation. Next step, needing gov’t permission to leave the country.
Isn’t the main reason that some people give up their citizenship is to avoid paying taxes?
The only problem with the law is, we can’t kick Dick Cheney out.
Amerika. ’nuff said.
#0 Hmm, what if an American immigrates to Canada w/o renouncing US citizenship?
#2 Pat, in the Bacardi Tour in Puerto Rico, a speaker explains how Castro and the Bacardi family were rather close.
When Castro took power, making all property that of the state, the communist state of course wanted in on the lucrative Bacardi Rum business.
Mr. Bacardi himself chartered a boat with his family and his most prized possessions – seeds to grow his spices and special trees, essential to the Bacardi Rum recipe.
He set up shop in Puerto Rico and proceeded to make Rum *the* definitive Coca Cola add-on.
Happy Canada Day !
Meanwhile? Halliburton relocates to Dubai.
God bless America.
#5. I guess now he will have to move to another island to make his crappy Rum.
Actually, the law is targeted toward those who give up their citizenship, leave the U.S., and then come right back again to live here tax free. It is totally a tax dodge by the wealthy and I have no problem with them going after those folks.
In almost every other country does not tax it’s citizen who are living in an other country. The US is the rare country to impose an income tax on top of the taxes payed in the host country. I, has a Canadian, if i lived outside the country for a few years. Would not have to pay income on my earning to the Canadian government. I can see why some would renounce their citizenship over an unjust double taxation scheme.
So they keep skilled workers out by discouraging immigration. They keep tourist euros out by harassing travellers at the border. And to compensate for this, they’re making it nearly impossible for anyone with a little savings to emigrate out.
I see were they’re going with this. Maybe overseas travel should be forbidden too?
#10 “I see were they’re going with this. Maybe overseas travel should be forbidden too?”
Coming to a totalitarian country near you.
Thank god there’s a loophole. You could always give your stuff away…say to some organization or offshore fund…to Bear Stearns…
It is a little to late. Those that have lots of money have already moved their money offshore. Those of us that are poor will be stuck paying the bill. I can’t afford a sweet accountant to make my assets disappear, “I am so poor just look at me!” they will say as they sit before congress. I’ve heard that story a thousand times in my lifetime. The law is meaningless.
I think I just realized I’m a prisoner in my own house.
If you’re smart enough couldn’t you move your assets quietly/gradually out of the country first then give up your citizenship? Not that I would since they tell me that out of all the prisons, this is the nicest.
#14 – Yes.
#14 – U.S. Inmate,
#15 – Patrick
Are you sure you wouldn’t like to switch to an Austrian prison?
Um … this sounds like the closure of the billionaire loophole.
Currently, you can nullify all of your current year federal tax debts by renouncing your citizenship.
It’s common for those that made a killing, like say you made $400 million or $2 billion in a one-time business or stock sale to just say hey I’m gonna keep the the whole amount, renounce my citizenship and go live in Europe.
W has dem wars to pay fur.
#14
Currently ANY bank transaction of $5000 or more MUST be reported to the US Government. Before Dubya, only international money exchanges of $10000 or more were required to be reported, now any transaction internal to the US must be reported by the bank itself to the Feds.
This is aimed at the ultra-rich who are using renunciation of their citizenship as a tax dodge. I thought you guys were all in favor of higher taxes on the wealthy?