I wonder how many are doing over other issues. Still a small number, most likely.
Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.
“What we have seen is a substantial change in mentality among the overseas community in the past two years,” said Jackie Bugnion, director of American Citizens Abroad, an advocacy group based in Geneva. “Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”
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.
[...]
Anecdotally, frustrations over tax and banking questions, not political considerations, appear to be the main drivers of the surge. Expat advocates say that as it becomes more difficult for Americans to live and work abroad, it will become harder for American companies to compete.American expats have long complained that the United States is the only industrialized country to tax citizens on income earned abroad, even when they are taxed in their country of residence, though they are allowed to exclude their first $91,400 in foreign-earned income.
[...]
Stringent new banking regulations — aimed both at curbing tax evasion and, under the Patriot Act, preventing money from flowing to terrorist groups — have inadvertently made it harder for some expats to keep bank accounts in the United States and in some cases abroad.
#20 Cursor
Absolutely agree with your position on taxes.
When I first got to Spain the taxes seemed terrible, then when we became part of Europe and the VAT tax started in it felt like a prison rape. But after all these years, when I compare lifestyles with friends and family back home, I’m doin’ better than alright. Oh, and the social medicine here is great, no constant premium increases, no worries about them finding an excuse not to pay, and they have all the modern equiptment and techniques. I dare say that if most americans would add what they’re paying in taxes(all) and what their medical insurance is costing them, they’d actually be paying much more than europeans with socialized medicine.
Americans are not the only ones being taxed when they work abroad. Canadians are too.
At least that’s how I remember it when I last looked at the laws there.
If you think this is bad look at millions emigrants from the former USSR – their pensions earned over lifetime of work were revoked as soon as they left the country. (although they partially recovered lost money by defrauding the local welfare system)
Let me get this straight, they make more the $91,000 annually and don’t have to live here. Sounds like a pretty sweet deal taxes or no taxes.
Add this to the things I could care less about.
#3, lower than a 40% tax rate? Not too hard to find countries like that.
Plus, it’s not just that. As the article says, they have to pay the US tax rate plus the other countries’ tax rate.
Since you have to be rich to just pick up and move when you feel like it. These people sound like aholes with too much money and don’t want to give any of it to Democrats? It’s just a question, I have questions… and a black board.
It’s mostly the hassle for middle-class wages.
You pay the taxes where you live abroad, then you also file a US tax return and you would pay US tax on the same amount – except you can deduct the amount of foreign tax you paid.
So generally you don’t pay any US tax, unless you are working tax free in the middle east.
The real problem is the complexity.
Other country’s tax years run april-april so you get dividends etc in april, the US wants them jan-dec and won’t accept any excuses. Then you have different rules on what you can deduct and whether interest is income or capital gains in different countries.
Then the really fun one – the IRS wants a check on a US bank and the patriot act pretty much stops you opening a US account if you live abroad.
If you are Bill Gates your accountants just do this, but if you are just a MS admin in London it suddenly doesn’t look worthwhile to spend $1000 on accountants to fill in a form to pay $100 tax to uncle sam. That’s why the proposed $90k exemption.
Jeeze… at least the US exempts the first $91k.
Australia taxes 100% of every dollar that an Aussie earns, no matter where, or if that money ever reaches Australian soil. They do allow credit for foreign taxes paid. But no free ride at all.
Another explanation is medical insurance. When you are over 45, and have a medical history, it is financially impossible to buy medical insurance in the US. That alone takes a far larger chunk of the budget than taxes.
Why would anyone on god’s green earth pay/file US taxes if they lived and worked abroad? Sounds insane to me!
Well, everything I read here just convinces me more and more that government is wasteful, inefficient and causes more problems than it solves.
#26 Personality
Actually I picked up and moved when I was 24 (1985). Worked a crappy warehouse job doing all the overtime I could get. Saving for months to be able to come to Spain for a ‘visit’. Had enough for the trip and $1000 cash. Found work easy, was treated well, never went home. It happens a lot more than you might think.
In Canada the rule is that if you reside at home less than 183 days than you don’t need to file. There are other provisos around non-resident status, but that’s the main benchmark. You still have to file a form showing non-residency.
#28 – Australia would never get away with doing that. Most people have 2 passports and could just leave and not come back if the government tried that on. It’s not like the country is anything special.
However, you do have to actually be nonresident in order to get away with not paying taxes on your foreign income. For example, if you move to Singapore to work.
But if you work in Singapore and maintain your family in Sydney, bad luck, you have to pay.
I like keeping as much of my money as anyone; but I’m not a goddamned freeloader.
Screw all you bastards that want to live in any country and don’t want to pay your share of the expenses.
And don’t talk about government wasting money, so you shouldn’t have to pay your taxes. That’s just rationalizing your greed and blaming others for it.
If you don’t like the way your government is run, vote them out of office. (hmmm . . you never thought of that)
Plainly it’s all about your selfish greed, so adios and good riddance.
I knew of a guy, an ex-military recruiter, who was living down in Central America, to beat American taxes. And yet he was drawing a Federal petition. Which of course, US Taxpayers were paying for. Any ex-Americans, who expect help from the US, in any form, financial or otherwise. Ought to be citizens, in order to get same. And not be allowed to skip out on paying US taxes. Otherwise, they’re just the same as people who don’t pay for US health insurance. And they expect to get covered as soon as something goes wrong. These deadbeats are practicing their own brand of socialism, out of the country. And you can bet that when the “rebels” take over in whatever country they’re hiding in. They’ll expect the US to come rescue them. And I believe we have on a couple occasions.
Glen,
Consider the cost of living in the USA.
So you have PAID into your pension and Social security. And you are getting $600-1000 per month. WHERE in the USA can you live and NOT pay out 99% of your Pension to Food and shelter. NOT bills. NOW try to pay your bills, car insurance, MEDICAL
America sucks. And more Americans are starting to wake up to that fact.
America sucks because government has sucked the good out of it. Most countries suck for this same reason. It’s called the political class. They pass laws which on the face of them seem to be for the good of “the people.” Then those same laws end up causing more problems than they solve. So they have to pass more laws, which cause even more problems, and so on and so forth. Look at anything the government gets involved in and see for yourself.
To WMCDUFF:
Hong Kong: income tax is 0-15%, no sales or VAT taxes. Economic power house, and real property rights.
Singapore: income tax 3.5-20%. VAT tax 7.5
Switzerland: income tax 0-13.2. VAT tax 3.6/2.4/7.6%. I might add Switzerland’s government is like the USA had 100 years ago. All the power is at the local level. If you like government programs and higher taxes, move to that “state”. This creates natural competition and doesn’t create bitter citizens. You have a choice to live where you like it best and don’t have submit to 500 politicians every whim.
Monaco: income tax 0%. 19.6% VAT tax
Mexico: income tax 0-23%. 16% VAT.
New Zealange income tax 12.5-38%. 12.5 VAT.
Try a host of other countries also: Ukraine, Chile, Taiwan, Costa Rica, Russia etc..
#12: Faxon said, on April 25th, 2010 at 6:47 pm, “Then, apply for food stamps, free medical, go to college for free, go to food banks, and take advantage of all the free giveaways the government gives to the slobs and bums.”
OH dear, you’ve only been reading from 1960s newspapers if you think any of this is still true. Back in 1996 all of it changed.
Medicaid requires an on-the-grid part time job (20 hours a week minimum) or a disability determination from the Social Security Administration, which can take years: a friend of mine is paralyzed from the chest down, he’s been waiting three years so far. His social worker thinks it’ll happen in another year or so.
Emergency rooms have to stabilize your condition, but they don’t have to cure it (and if you have to use them as your health insurance, you will quickly realize the difference between “stabilize” and “cure”). The hospital will hunt you down for payment, and “charity care” is not only strained right now, they usually have to mail you the paperwork, which conveniently gives their collection department your address if they “accidentally forget to mail the paperwork.”
Food stamps is the same for a regular monthly food allowance: part time job required. If you don’t have a part-time job, the government will give you three months of food stamps and then make you wait a year before you get more. Can you eat for fifteen months on $750?
College is not free for the poor either, unless you are disabled.
Food banks will give you three days of food, then refuse to allow you any more for another 30-90 days. Thats three days of food for a 30-90 day period.
Are you able to give birth? Can you do so fairly soon? Then you have a five year *lifetime limit* to get Medicaid, food assistance, and cash assistance without the necessary part-time job. Your kid will continue to get some help until he or she turns 18, but it is not enough to take care of them properly.
The people telling you stuff about “the slobs and bums” are woefully misinformed. Any of what you said might have been true in the 1960s and 1970s, but what you said is all untrue now.
#38, to Conture614: “Hong Kong: income tax is 0-15%, no sales or VAT taxes.
Singapore: income tax 3.5-20%. VAT tax 7.5
Switzerland: income tax 0-13.2. VAT tax 3.6/2.4/7.6%.
Monaco: income tax 0%. 19.6% VAT tax
Mexico: income tax 0-23%. 16% VAT.
New Zealange income tax 12.5-38%. 12.5 VAT.”
==========
Hong Kong, China is the fifth most expensive city in the world to live in. All those property rights come with a huge price tag. Hong Kong also has no local government at all, being controlled entirely from a central government at the top (which is appointed by Commies!). Also, the People’s Liberation Army (the Commies!) runs several businesses in Hong Kong (Commie businesses!) and owns a lot of land there too (Commie landowners!), so any money you spend in Hong Kong could be going to help prop up the Mainland China Government (the Commies!)
The fourth most expensive city in the world to live in is Zurich, Switzerland. Switzerland’s agricultural protectionism has led to much higher food prices there than in the rest of the world. The downside of direct democracy is that while you don’t have to deal with the whims of 500 politicians, you do have to deal with the whims of 100,000 citizens, who may decide to change everything just because of a commercial they saw on TV yesterday. The advantage of republics is that they slow down government, and Switzerland’s direct democracy speeds it up dangerously.
Singapore is the tenth most expensive city in the world to live in, and if you’re looking for a draconian government to live under, you can’t do much better than Singapore. Freedom of Speech? Largely nonexistent. Freedom of the press? Many journalists self-censor to avoid harsh government penalties. Privacy rights? Virtually nonexistent. Censorship? A part of daily Singapore life. The crime rate is extremely low but thats what you get when the government is right, all the time.
What you save in taxes you spend just to live there.
As for the rest of the main countries mentioned:
Mexico is an odd choice to live in, because the low tax rate means the government doesn’t have any control over the crime rate. You get what you pay for, and in the case of Mexico you have to pay for your own private security, which may exceed the amount you save in taxes. But since you’re already insisting on cutting off your own nose to spite your face, this may not be a problem for you.
Monaco is a fun little economic anomaly. Sure, the *obvious* taxes are 0% income, 19.6% VAT. Of course, anyone who works for a living in Monaco pays 13% of their income in “social insurance”, and the employer pays a whopping 28%-40% of each employee’s gross salary as this “social insurance” payment. This means that about 50% of each employee’s income is paid as payroll taxes (like the U.S. Social Security and Medicare) to the government, and you have to pay this tax on any employees you hire in Monaco, with no income caps. If you’re the one working there, your “income tax” is effectively *50%*.
To put this in perspective, the payroll taxes here in the U.S.A. are about 18%. If an employee makes $30,000 a year, the payroll taxes are going to be about $5,400. For that same $30,000 a year job in Monaco, the payroll taxes are going to be about $15,000.
There’s also a $102,000 cap on U.S. income which can be payroll taxed. There is no such income cap in Monaco. If an employee in the U.S.A. makes $150,000 a year, his payroll taxes only count on $102,000 of that amount, meaning he pays $18,360 in payroll taxes. In Monaco, he pays $75,000 in payroll taxes, because all $150,000 gross income is payroll taxable. Make $1 million a year in Monaco? $500,000 a year in payroll taxes. That same $1 million salary in the U.S. only loses you $18,360 in U.S. payroll taxes. Stock options in Monaco are treated as wages income when cashed in, so don’t go think you can hide your income from Monaco payroll taxes in stock options.
Finally, New Zealand, which I see from your information has similar tax rates to the U.S. It is a nice place to live, a low crime rate, and good for business. It is ostensibly a monarchy, which should fit in nicely with the aspirations to aristocracy held by the wealthy seeking to renounce their U.S. citizenship. Now, New Zealand is fiercely protective of its animals and natural lands (something you don’t have to put up with as much in the U.S.A.), so Libertarians and wealthy people may not be able to live there long without going insane from not being allowed to hunt rare animals or commercially develop pristine wilderness.
Rand Paul followers will also be horrified to learn that the New Zealand Constitution has “freedom from discrimination” listed in their Bill of Rights. Fortunately, the New Zealand Constitution is easily modified with a simple majority in the New Zealand Parliament, so if enough of you leave the U.S.A. and move to New Zealand (please?), that anomaly in their Constitution can be removed easily.