How does defecting to another country work?

[Mike_Mac]

@constanze

First nitpick: It’s Weimar(after the town where the constitution was written), not Wiemar.

Second nitpick: comparing current-day USA with Weimar Germany about to fail is disingenious for many reasons, and besides, makes you look like a blathering idiot from the right fringe about to hide in the woods. So in your own interest, I’d recommend looking at the facts first.

Lastly, I wondered where you got the spurios idea from that when you leave the US and renounce your citizenship, you have to hand over all your possessions. On what law would this idea be based? Cecil notes in his column that . Did you misunderstand this?

Certainly, given that
if the US govt. decided to take steps to curb billionaires leaving the country with their money does make sense and is legitimate, considering that people used the country’s resources to earn that money in the first place and are thus (ethically, morally, legally) required to pay some back into the community in form of taxes.

That does not at all equal the idea of “handing over all your assets”. Maybe you need to check your sources.

I don’t recall saying that “you have to hand over all your possessions” It’s an exit tax that changes the capital gain rules…forcing you to mark to market means they treat everything as if it were sold, a deemed sale, thus forcing you to “recognize” gain on assets you have not sold. Like I said, they hold you up on the way out. Maybe you need to check your sources…beyond Cecil.

But you got me on the spellcheck!

[Northern_Piper]

@Mike_Mac

I don’t recall saying that “you have to hand over all your possessions” It’s an exit tax that changes the capital gain rules…

Well, I read this comment as saying that emigrants from the US had to hand over all their possessions:

@Mike_Mac

and that empty-your-pockets as you exit tax law was just passed a few years ago…if they can do that, what’s next?

You’ve since explained that you are referring to a law affecting the taxation of capital gains, which is not nearly the same as the phrase “empty your pockets” would seem to imply.

[ruadh]

@Hello_Again

If there was a reasonable concern they would be executed, they would be granted asylum absent some absolute bar to remaining on US soil. “if there is reasonable concern they might be executed there” – That’s almost the definition of the basis for granting asylum.

That’s not quite true. The basis for granting asylum is that you have a well-founded fear of persecution (which may or may not extend to a fear of execution; it can be as relatively minor as not being allowed to practice your religion) on the basis of your race, nationality, religion, political opinion or membership of a particular social group. If your fear of being executed doesn’t fall into one of these categories, then it doesn’t matter how well-founded it is, you’re not entitled to asylum.

That doesn’t mean you’ll be returned, however - there might be other legal grounds on which you could be allowed to stay, depending on what country you’ve sought asylum in. For example, in many countries there’s something called subsidiary (or complementary) protection, which is sort of “asylum lite”; countries that are members of the European Convention on Human Rights also have to consider whether your return would violate Article 3 (prohibition on torture/inhuman and degrading treatment); the UN Convention on Torture also prohibits return where torture is a real likelihood. I’m not familiar with all the grounds that apply in the US. But if you’re allowed to stay under one of these, or another similar ground, it isn’t asylum per se that you’ll be granted.

[Mike_Mac]

@Northern_Piper

Well, I read this comment as saying that emigrants from the US had to hand over all their possessions:

You’ve since explained that you are referring to a law affecting the taxation of capital gains, which is not nearly the same as the phrase “empty your pockets” would seem to imply.

Empty your pockets is what the police do when they detain you…

OK, let me explain…we have a “tax code”, embodied in USC Title 26, which specifies how and in what manner all persons shall be taxed, while purporting to treat everyone equally under the law, as required by the US Constitution, but only until you want to leave, whereupon the rules are suddenly changed. The “exit tax” (my terminology) was enacted in the last few years, and strikes me as patently unfair, in the sense that it treats people differently…not equally.

[constanze]

@Mike_Mac

Empty your pockets is what the police do when they detain you…

Then why do you use a wrong terminology, making it easy for people to misunderstand you?

OK, let me explain…we have a “tax code”, embodied in USC Title 26, which specifies how and in what manner all persons shall be taxed, while purporting to treat everyone equally under the law, as required by the US Constitution, but only until you want to leave, whereupon the rules are suddenly changed. The “exit tax” (my terminology) was enacted in the last few years, and strikes me as patently unfair, in the sense that it treats people differently…not equally.

Rather easy to see from my perspective: The yearly income tax can afford to only tax the actual income during that year because other gains will be taxed next year or 10 years into the future.

When you’re leaving the country, though, the state has no chance to get taxes from gains further down the road from you, as you realize them, so naturally it assesses the current value of your assets and taxes you on them.

Also, you are not forced to sell your possessions because you want to leave; you only have to declare the current value and then pay tax. If you have enough cash to pay all tax, you don’t have to sell any possessions.

Which is a bit different than the impression your wording in the first posts gave.

[Koxinga]

@aceplace57

Read this wrong the first time. I thought you said…
“How does defecating in another country work?”

I was going to reassure you that it works just like it did at your own home.

Never encountered an Asian squat toilet, have you?

[aruvqan]

@Mike_Mac

I don’t recall saying that “you have to hand over all your possessions” It’s an exit tax that changes the capital gain rules…forcing you to mark to market means they treat everything as if it were sold, a deemed sale, thus forcing you to “recognize” gain on assets you have not sold. Like I said, they hold you up on the way out. Maybe you need to check your sources…beyond Cecil.

But you got me on the spellcheck!

So what would happen if you had your financial goodies in something like Deutsche Bank, and just went on a vacation to Germany and withdrew everything then rescinded citizenship? You aren’t actually bringing cash through customs…

[constanze]

@aruvqan

So what would happen if you had your financial goodies in something like Deutsche Bank, and just went on a vacation to Germany and withdrew everything then rescinded citizenship? You aren’t actually bringing cash through customs…

In the process of rescinding citizenship through the US embassy, you have to declare your assets, whether they are cash in Euro, short-term stocks, long-time bonds, or Indonesian sea shells, with the current value and pay the appropriate tax on them.

Cash itself is not taxable, only the earnings on it. If you stuck your cash under the mattress for the last 20 years, the govt. might (don’t know the exact law obviously) instead calculate the rate for a normal interest bank account because that’s where normal people put it.
On the other hand, if in the future 20 years you manage to realize 6% interest instead of the 2% interest the govt. calculated, you’re a winner.

Although, because you usually live in a different country after renouncing your citizenship, you now have to pay the taxes on the new interest to the new country. The German tax code starts with the assumption that all money that German citizens earn, no matter where, is taxable income; and all money that people staying/ living in Germany earn, no matter their nationality, is taxable income.