6 ms·

Interesting facts about renouncing American citizenship: - There is renunciation fee that has to be paid and currently stands at $2,350 (the highest in the wor

Interesting facts about renouncing American citizenship: - There is renunciation fee that has to be paid and currently stands at $2,350 (the highest in the world).[1] - A final tax return will sill need to be filed. [1] - An Expatriation tax is payable if [..] Your net worth is $2 million or more on the date of your expatriation. you will be treated as having disposed of your assets the day before your expatriation and will be subject to capital gains tax. - The highest capital gains tax bracket in the USA is 20% [2] Now there will be ways this is avoided but it would seem that the IRS is trying very hard make this process unappealing [1] https://www.expatnetwork.com/how-to-renounce-us-citizenship-the-costs-and-implications/ https://www.expatnetwork.com/how-to-renounce-us-citizenship-... [2] https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...

apples_oranges 5y ago
Can a citizenship be exchanged? For example you get my Australian passport, I get your American? Neither country loses a taxpayer this way.. ;)
- cblconfederate 5y ago
  I always wanted to start a "couchsurfing for passports" , or even airbnb. If one is a citizen, they can vet for an exchange citizen, sounds democratic to me.
- shell0x 5y ago
  Not exchanged, but considering Australia and America are both immigrant countries, you may be able to get an Italian or Irish passport based on ancestry if your ancestors came from there.
- ttyprintk 5y ago
  I believe to renounce you must first have dual nationality. You could marry a foreigner for nationality, then (eventually) both renounce your home country.
  - circular_logic 5y ago
    While that is the smart way to go. The USA is one of the few country's that will allow you to become stateless.[1] But I am not sure why you would ever do that. [1] https://en.wikipedia.org/wiki/Renunciation_of_citizenship#Statelessness https://en.wikipedia.org/wiki/Renunciation_of_citizenship#St...
Retric 5y ago
That honestly seems quite reasonable. Citizenship comes with all sorts of obligations like getting drafted and serving on juries, taxes are simply the most obvious. On the up side you can apparently still qualify for Social Security benefits.
- geomark 5y ago
  Yeah, but receiving payments can be an issue because U.S. banks won't deal with you without a U.S. address.
  - walshemj 5y ago
    A friend who has a US wife is in the states now to visit family and also most importantly renew her Colorado drivers license for similar reasons.
- Chris2048 5y ago
  > Citizenship comes with all sorts of obligations like getting drafted and serving on juries If you've already done those things, does the IRS pay you?
  - Retric 5y ago
    Obligations don’t work that way, do you get paid for paying your debts? The personal benefit from the obligation to serve on juries is the option of being tried by a jury of your peers.
    - Chris2048 5y ago
      You compare obligations to debt (which do have an upfront playout) but then state there is a benefit. How does that work with debt? Why would a jury of peers be a benefit, unless you assume positive bias? How does that work with the draft?
      - Retric 5y ago
psychlops 5y ago
The stimulus checks allowed them to afford to renounce citizenship.
- depressedpanda 5y ago
  You're assuming everyone got a stimulus check. That's not the case.
shell0x 5y ago
While $2350 is expensive, compare that to Australia. My friend got sponsored by his partner for a partner visa and the fee is AUD7,850 for most applicants. https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/partner-onshore/temporary-820 https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-li... It's a huge rip-off like everything in this country. The $2350 seem to be cheaper than fees for filing annual tax returns for the next 50 years :)
- GordonS 5y ago
  On the other side of the equation (getting citizenship, rather than renouncing it), here in the UK I have a Chinese friend for whom it cost over £20k to gain citizenship after she married a local. (this was the total paid to the government over, I think, a 3 year period).
- smnrchrds 5y ago
  The fee for renouncing Australian citizenship is 265 AUD equivalent to 196 USD. https://immi.homeaffairs.gov.au/citizenship/give-up-citizenship https://immi.homeaffairs.gov.au/citizenship/give-up-citizens...
bell-cot 5y ago
> ...it would seem that the IRS is trying very hard make this process unappealing IANAL, but I believe that all the unpleasantries which you note were decided by the U.S. Congress. (Most probably with the President's sign-off.) Making the IRS out to be the Real Villain(tm) here only helps a bunch of self-serving politicians to evade responsibility.
- AdamN 5y ago
  +100
- azinman2 5y ago
  And what's wrong with this? Personally I'm very happy to see it. The idea that you make tons and tons of money by what America has worked hard to offer you and then you want to skip town because of taxes? Taxes that help pay for all the advantages that got you that wealth in the first place? Good for Congress for trying to prevent this.
  - junon 5y ago
    Ehhh not sure about that. America doesn't have high taxes compared to many other places to live. This isn't as clear cut as I think you think it is.
    - azinman2 5y ago
      Then you’re refuting the basic premise of the article, which is that the ultra wealthy want to avoid taxes. Why else would Eric Schmidt want to become a citizen of Cyprus, which then also allows him to live elsewhere in the EU? It’s certainly isn’t to end up laying more in taxes than he would in the US.
      - ucha 5y ago
        Being a citizen of Cyprus gives him visa free travel and work options in Europe. As he hasn't renounced US citizenship, he certainly isn't taking advantage of that for tax reasons. The article seems to imply otherwise, but that's basically what bad journalism is... strongly suggesting an incorrect interpretation of facts while still "telling the truth".
jandrese 5y ago
It's even more expensive than that since they don't refund you the money you paid into Social Security when you renounce.
- emodendroket 5y ago
  Why would they refund past taxes you'd paid?
  - jandrese 5y ago
    The money you put into taxes went into national defense that kept you safe, roads you drove on, schools that provided an educated workforce that made the goods and services you consumed, etc... Money put into Social Security is just lost to you unless you are renouncing your money after retirement.
    - emodendroket 5y ago
      That's a rather generous assessment of how my money was used in Iraq, for instance. That sounds glib, but if you could pick and choose which things your taxes funded or not it would kind of make the whole concept of the state untenable.
- whymauri 5y ago
  lol, as Gen Z I've more-or-less accepted that my Social Security is just setting my money on fire and dancing in a circle.
  - wait_a_minute 5y ago
    Why? It doesn’t have to be that way. Social Security has been successfully bolstered in the past and can be again. I don’t see why it can’t remain solvent for the foreseeable future…
  - kevinh 5y ago
    My boomer parents felt the same way and yet they're receiving it right now. 65+ year old people are one of the most powerful voting blocs.
deleted 5y ago
[deleted]
ziggus 5y ago
The 20% capital gains tax bracket is applicable to assets held longer than one year. Short term gains are taxed at your normal tax rate.
javert 5y ago
"- The highest capital gains tax bracket in the USA is 20% [2]" Not really, because they can arbitrarily change it and backdate the change at any time, and they are currently planning to raise it to 43% and backdate the change. In truth, the US does not have a fixed capital gains rate.

apples_oranges 5y ago

Can a citizenship be exchanged? For example you get my Australian passport, I get your American? Neither country loses a taxpayer this way.. ;)

cblconfederate 5y ago
I always wanted to start a "couchsurfing for passports" , or even airbnb. If one is a citizen, they can vet for an exchange citizen, sounds democratic to me.
shell0x 5y ago
Not exchanged, but considering Australia and America are both immigrant countries, you may be able to get an Italian or Irish passport based on ancestry if your ancestors came from there.
ttyprintk 5y ago
I believe to renounce you must first have dual nationality. You could marry a foreigner for nationality, then (eventually) both renounce your home country.
- circular_logic 5y ago
  While that is the smart way to go. The USA is one of the few country's that will allow you to become stateless.[1] But I am not sure why you would ever do that. [1] https://en.wikipedia.org/wiki/Renunciation_of_citizenship#Statelessness https://en.wikipedia.org/wiki/Renunciation_of_citizenship#St...

Retric 5y ago

That honestly seems quite reasonable. Citizenship comes with all sorts of obligations like getting drafted and serving on juries, taxes are simply the most obvious. On the up side you can apparently still qualify for Social Security benefits.

geomark 5y ago
Yeah, but receiving payments can be an issue because U.S. banks won't deal with you without a U.S. address.
- walshemj 5y ago
  A friend who has a US wife is in the states now to visit family and also most importantly renew her Colorado drivers license for similar reasons.
Chris2048 5y ago
> Citizenship comes with all sorts of obligations like getting drafted and serving on juries If you've already done those things, does the IRS pay you?
- Retric 5y ago
  Obligations don’t work that way, do you get paid for paying your debts? The personal benefit from the obligation to serve on juries is the option of being tried by a jury of your peers.
  - Chris2048 5y ago
    You compare obligations to debt (which do have an upfront playout) but then state there is a benefit. How does that work with debt? Why would a jury of peers be a benefit, unless you assume positive bias? How does that work with the draft?
    - Retric 5y ago

psychlops 5y ago

The stimulus checks allowed them to afford to renounce citizenship.

depressedpanda 5y ago
You're assuming everyone got a stimulus check. That's not the case.

shell0x 5y ago

While $2350 is expensive, compare that to Australia. My friend got sponsored by his partner for a partner visa and the fee is AUD7,850 for most applicants. https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/partner-onshore/temporary-820 https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-li... It's a huge rip-off like everything in this country. The $2350 seem to be cheaper than fees for filing annual tax returns for the next 50 years :)

GordonS 5y ago
On the other side of the equation (getting citizenship, rather than renouncing it), here in the UK I have a Chinese friend for whom it cost over £20k to gain citizenship after she married a local. (this was the total paid to the government over, I think, a 3 year period).
smnrchrds 5y ago
The fee for renouncing Australian citizenship is 265 AUD equivalent to 196 USD. https://immi.homeaffairs.gov.au/citizenship/give-up-citizenship https://immi.homeaffairs.gov.au/citizenship/give-up-citizens...

bell-cot 5y ago

> ...it would seem that the IRS is trying very hard make this process unappealing IANAL, but I believe that all the unpleasantries which you note were decided by the U.S. Congress. (Most probably with the President's sign-off.) Making the IRS out to be the Real Villain(tm) here only helps a bunch of self-serving politicians to evade responsibility.

AdamN 5y ago
+100
azinman2 5y ago
And what's wrong with this? Personally I'm very happy to see it. The idea that you make tons and tons of money by what America has worked hard to offer you and then you want to skip town because of taxes? Taxes that help pay for all the advantages that got you that wealth in the first place? Good for Congress for trying to prevent this.
- junon 5y ago
  Ehhh not sure about that. America doesn't have high taxes compared to many other places to live. This isn't as clear cut as I think you think it is.
  - azinman2 5y ago
    Then you’re refuting the basic premise of the article, which is that the ultra wealthy want to avoid taxes. Why else would Eric Schmidt want to become a citizen of Cyprus, which then also allows him to live elsewhere in the EU? It’s certainly isn’t to end up laying more in taxes than he would in the US.
    - ucha 5y ago
      Being a citizen of Cyprus gives him visa free travel and work options in Europe. As he hasn't renounced US citizenship, he certainly isn't taking advantage of that for tax reasons. The article seems to imply otherwise, but that's basically what bad journalism is... strongly suggesting an incorrect interpretation of facts while still "telling the truth".

jandrese 5y ago

It's even more expensive than that since they don't refund you the money you paid into Social Security when you renounce.

emodendroket 5y ago
Why would they refund past taxes you'd paid?
- jandrese 5y ago
  The money you put into taxes went into national defense that kept you safe, roads you drove on, schools that provided an educated workforce that made the goods and services you consumed, etc... Money put into Social Security is just lost to you unless you are renouncing your money after retirement.
  - emodendroket 5y ago
    That's a rather generous assessment of how my money was used in Iraq, for instance. That sounds glib, but if you could pick and choose which things your taxes funded or not it would kind of make the whole concept of the state untenable.
whymauri 5y ago
lol, as Gen Z I've more-or-less accepted that my Social Security is just setting my money on fire and dancing in a circle.
- wait_a_minute 5y ago
  Why? It doesn’t have to be that way. Social Security has been successfully bolstered in the past and can be again. I don’t see why it can’t remain solvent for the foreseeable future…
- kevinh 5y ago
  My boomer parents felt the same way and yet they're receiving it right now. 65+ year old people are one of the most powerful voting blocs.

deleted 5y ago

[deleted]

ziggus 5y ago

The 20% capital gains tax bracket is applicable to assets held longer than one year. Short term gains are taxed at your normal tax rate.

javert 5y ago

"- The highest capital gains tax bracket in the USA is 20% [2]" Not really, because they can arbitrarily change it and backdate the change at any time, and they are currently planning to raise it to 43% and backdate the change. In truth, the US does not have a fixed capital gains rate.