More Americans abroad giving up citizenship for lower taxes
- Thread starter Marc
- Start date
That is a great point. Citizenship should be about where you want to hang your hat, and not about tax considerations. Not sure if I raise my eyebrow more at the individuals dropping their citizenship, or a tax system that gives tax incentive to do so.
D
D.Scott
Trouble is, everything isn't always as black and white as it first appears. Take, for example, the following scenario which is an absolutely true situation.
A very prominent multi-millionaire corporate attorney resides on 36th street in New York City in one of the few single family homes in Murray Hill. Actually, he resides there "almost full-time", with a short annual stay at his "legal" residence on the Isle of Man. That is where his business is "officially" located as well. Apparently he has to make the tiresome trek back to Europe every year to maintain his Isle of Man citizenship.
Before the tax laws were changed, income earned in a foreign country were subject to the tax of that country and not taxed in the U.S. This worked out very well if your company was located on the Isle of Man. Actually, it worked nicely for pretty much all the channel islands as most of them have no taxes. They are supported under various treaties with the E.U. or with their "protectorate" countries.
The New York attorney's income came from the Isle of Man company and because he was "officially" a resident of the Isle of Man, his "foreign earnings" were not subject to tax in the U.S. I'm sure there had to be a few adjustments to make everything work smoothly but being an attorney probably would help.
It is my understanding that the new laws still allow $80K of taxable income before any U.S. tax is imposed. With a good accountant and a good corporate attorney, I wonder how many millions you would have to earn to to end up with a taxable income of $80K.
As another thought, I wonder how many Americans living and working in another country actually have a taxable income above $80K.
Dave
A very prominent multi-millionaire corporate attorney resides on 36th street in New York City in one of the few single family homes in Murray Hill. Actually, he resides there "almost full-time", with a short annual stay at his "legal" residence on the Isle of Man. That is where his business is "officially" located as well. Apparently he has to make the tiresome trek back to Europe every year to maintain his Isle of Man citizenship.
Before the tax laws were changed, income earned in a foreign country were subject to the tax of that country and not taxed in the U.S. This worked out very well if your company was located on the Isle of Man. Actually, it worked nicely for pretty much all the channel islands as most of them have no taxes. They are supported under various treaties with the E.U. or with their "protectorate" countries.
The New York attorney's income came from the Isle of Man company and because he was "officially" a resident of the Isle of Man, his "foreign earnings" were not subject to tax in the U.S. I'm sure there had to be a few adjustments to make everything work smoothly but being an attorney probably would help.
It is my understanding that the new laws still allow $80K of taxable income before any U.S. tax is imposed. With a good accountant and a good corporate attorney, I wonder how many millions you would have to earn to to end up with a taxable income of $80K.
As another thought, I wonder how many Americans living and working in another country actually have a taxable income above $80K.
Dave
D
Dimitri
I cannot comprehend tossing aside my citizenship for any reason
I agree, my Canadian citizenship is the one that will stay with me my whole life I was born here, I was raised here, and no matter where I go or live I'm still a Canadian.
Dimitri
A
amanbhai
it is a sensitive issue so i shall not comment on that.:truce:
F
fireonce
Yeah, I think so.
L
Limburger
I cannot comprehend tossing aside my citizenship for any reason
As a naturalized citizen of the US, I could never, ever see me do this.
I know Democrats and Republicans don't see eye to eye, but American (US) Citizenship is the best one to have. I talk out of experience on this one.
There's a reason why people risk their lives to get over here. I haven't seen to many Ameican building rafts to escape to Cuba, or any other country for that matter.
M
Martijn
Everything great that you're happy to be American, but aren't you trying to make a point similar to "pizza is the best food in the world and I talk out of experience on this one"? If you want to get scientific on this topic and get into "which country is the best", you might want to check some international studies being done on overall happiness in countries all over the world. IIRC it's Sweden or some other extremely happy Scandinavian country
.
L
Limburger
When I say I talk out of experience, I really mean that since I have been a citizen of another country I can see the difference between the US and other countries in the world.
I don't think there is one single country that is the best country in the world.
If you want choice and freedom to do with your life what you want, go to the US.
If you want the government to take care of you, go to Sweden or some other West European country.
If you want to make almost just as much money on welfare as people that work for a living, go to the Netherlands.
See, there are good and bad things about every country in the world. I do know however that I pay a lot less taxes here in the US than I did in the Netherlands ..... A LOT LESS !!!!!
By the way, that's not the reason why I moved to the US, my wife was the reason. She didn't want to live in the Netherlands. She says it's WAY to crowded over there.
I don't think there is one single country that is the best country in the world.
If you want choice and freedom to do with your life what you want, go to the US.
If you want the government to take care of you, go to Sweden or some other West European country.
If you want to make almost just as much money on welfare as people that work for a living, go to the Netherlands.
See, there are good and bad things about every country in the world. I do know however that I pay a lot less taxes here in the US than I did in the Netherlands ..... A LOT LESS !!!!!
By the way, that's not the reason why I moved to the US, my wife was the reason. She didn't want to live in the Netherlands. She says it's WAY to crowded over there.
M
Martijn
just join the people on welfare! But seriously, glad we agree that there are a lot of different ways to look at countries. To get back on topic a bit more, paying taxes should always be compared to the benefit you get from those taxes. The woman in the article didn't have any benefit from her US taxes, so fair deal to skip US citizenship IMHO.
