The reason nobody who knows what they’re talking about has mentioned it is because it isn’t relevant.
Does it make sense to you that you would in practice pay the higher of the 2 country’s taxes, assuming you wished to retain a New Zealand passport? Because that’s what the US system boils down to. You get a full credit for the other country’s taxes, deductible against US taxes, admittedly subject to hair-pulling amounts of complication.
ETA: Ooops, no longer the case: http://www.nytimes.com/2007/12/28/world/americas/28iht-ATAXES.html?pagewanted=all Now the foreign earned income exclusion is capped at something like $87,000… or something… I can’t work it out during the edit window..
…it makes sense that you pay taxes in the country that you live in. That’s how the rest of the world does it. What sense is there in making your citizens pay tax twice?
The US system is extremely complicated and provides all sorts of headaches for banks and other institutions around the world. It can even be difficult for US citizens to open bank accounts overseas.
Its a silly law and a silly requirement and the only defense of it in this thread appears to be patriotism.
That reminded me of something that occurred to me earlier. Keeping your US citizenship does give one two important benifits. You get into legal trouble somewhere in the world or you get kidnapped the good ole USA will probably be there to help (at least if your rich and famous). No longer a citizen? Not so much.
Yeah, the chances of that happening are pretty damn low, but if had more money than God, I sure would feel better having a little less and knowing that if some shit hits the fan the US would have my back.
If you get locked up abroad, the USA does not care. At all. You’ll do your time there like everyone else in that country. The embassy might send a letter or something on your behalf, but even that is unlikely.
I’m not an estate tax lawyer (the tax law has many subspecialties) but I don’t think you have any idea what you are talking about. I think you are grasping at strained readings of the law to avoid admitting that you are wrong.
Read revenue ruling 54-76 and the two ruling cited at the end of section 8 and the cites contained therein.
If you still think that you are correct and that Saverin is going to have his shares valued at $0.01 then lets make a friendly wager. A bottle of good scotch or something.
But it CAN be valued at an arbtrary value of 1 cent? I think the trouble here is that the 1 cent isn’t the value of the share, it’s the price that the shareholders have agreed to set pre-IPO, to encourage a smooth transaction.
So, the shareholders artificially reduce the “value” of a share to 1 cent, deal with their tax issues by paying a thousandth of the real value during this period, then open the markets again. I’m sure the IRS will have no problem with this.
Well then he was being childish.
Seriously, I stated this a long time ago in various other threads. You can’t tax the rich beyond what they think is reasonable. They simply take their money and move. That applies to companies as well. If the politicians who promote such taxes try to duck them (I’m looking at you and your yacht Senator Kerry) then this is what is to be expected.
Beyond that, citizenship is not needed to enjoy the fruits and labors of the United States. That goes for illegal immigrants and the wealthy alike.
Ya know. You are right. I have NEVER EVER EVER seen ANY news article in the past few decades where some high ranking official of the US gubment has had something to say about some US citizen somewhere abroad getting the shaft in one way or another or them doing even the smallest thing about it.
So, has anyone touched upon Singapore’s dismal human rights record and the fact that it’s a thoroughly corrupt police state yet ? 'Cause that seems somewhat notable to me.
Moving to wherever you’ll pay fewer taxes is happy funtimes and all, but it’s easy to forget that these fewer taxes are going somewhere else, too. In this case: more white slavery, police beatings, gay bashing and press censorship. Yay Facebook !
It all depends on what the options are. In a world where fulyl developed industrialized nations trip over each other to lower taxes for the wealthy you have a race to the bottom that the rich can take advantage of. If the industrialized nations can reach treaties about how to treat migratory birds then they can reach treaties about how to treat migratory wealth.
With that said, in this case we are talking about axing wealth that was generated in the USA. If Saverin continues to earn wealth after he expatriates then the US does not purport to tax that wealth. But the stuff he has when he leaves is taxable.
Actually I think it has more to do with us having a different attitude towards wealth. Most of us think of wealth as something that is used to buy the things that we want/need and serves little purpose beyond that. Thus if we have enough money to satisfy our wants/needs there is little benefit to giving up something we cherish for more money.
To other people such as Saverin (and possibly you?) money must either serves a different purpose (such as to keep score in ranking yourself relative to other rich people) or their desires must be so out of this world that 3 billion dollars isn’t enough to satisfy them.
That actually made me laugh out loud. It doesn’t matter how it’s done (whether through taxation or socialization). If you take more from the creators of wealth then they deem appropriate then they will take their money making skills somewhere else. The greater the attempt to do this the greater the exit of wealth. Historically you could see it in the large communes of the 19th century, modern communist nations such as Cuba or state/local municipalities that continually raise taxes.
It is true with all economic classes and not just the wealthy. I know a number of people who are moving because their property taxes keep going up. They get nothing additional for the loss of money and are fed up with it. Municipalities are learning this lesson the hard way because of the housing bubble. High taxes and upside down mortgages lead to people walking away.
Again, if politicians can’t be bothered with the high taxes created by fellow politicians why would anyone expect different behavior from those they represent?
If all the industrialized nations have decided not to compete for rich people with lower taxes, then where would they go? Somalia?
How do you go from international coordination of tax rates to communes?
Countries competing on tax rates may be a race to the bottom but localities within a country doing it is cannibalism.
That’s not to say that there isn’t such a thing as overly high taxes but when you see one state trying to lure business from another state with special tax breaks, thats not creating new wealth, thats just moving it from your jurisdiction to my jurisdiction.
I don’t see what that has to do with taxing carried interest at the capital gains rate (feel free to respond with another tax related non-sequitor).
And all those countries you laud for their low tax rates? How are they doing today? Ireland? Spain? Portugal?
Taxation during Eisenhower’s administration was higher than in China at the same period if I recall correctly. Certainly higher than other industrial nations. GDP grew.
nm
If only we had Republicans like Eisenhower, Teddy Roosevelt, Abraham Lincoln, or Reagan these days but they’d never make it through the primary process.
Ireland is a sterling example of a tax race to the bottom. Ireland had a huge boom when they drastically lowered their tax rate. But it wasn’t really creating new businesses and new economic activity. It was poaching businesses from London.
Its also an example of why taxes don’t matter as much right now. People are more worried about having profits at all rather than how much those profits will be taxed at.
The State Department chartered jets to evacuate U.S. citizens from Egypt during the antigovernment protests there a few years ago. We regularly protest and try to get U.S. citizens released from Iran and Peru, for instance, when it appears they’re being unlawfully held. We may argue about whether or not Uncle Sam is doing enough in these situations, but read the front of your passport - foreign powers are made aware that U.S. citizens abroad have their government watching out for them.
The Facebook guy’s been in the U.S. since he was eleven and has made (or will make) big bucks due to the upbringing he had, the education he received and the work he did, all of it here. If he wants to give up his U.S. citizenship now just to keep a bit more of an obscene amount of money, well, sure, he can, but I call it a dick move. “Taxes are the price we pay for civilization,” Oliver Wendell Holmes Jr. wrote. I would hope that an immigrant raised in the U.S., who has enjoyed the blessings of liberty, prosperity and security here, would value his U.S. citizenship more than that.
And so what if the U.S. is the only country that taxes earnings of its citizens abroad? The U.S. is unique in a lot of ways - many good, some bad. The Constitution gives Congress the power to tax, and that’s a power Congress has chosen to exert. If compliance is cumbersome, it can be improved. If it’s a bad law, it can be repealed.
I wouldn’t give up my citizenship for any sum. It’s a priceless birthright to me.