Most countries treat tourists better than citizens
August 10, 2008 9:27 AM Subscribe
As an expatriate myself, I really wonder sometimes about the possibility that I'll never permanently live in the US again; I haven't worked there since 2005 and I only spend some vacations at home. I wouldn't put myself in a category of people who don't want to live in the US; I think I just like living abroad more, and at my relatively young age, I'm grateful that my profession and my passport give me the option to go so many places.
And loaded as he is, I can't say I have any feelings of malice for the guy in the first article: to me, what lies at the center of citizenship is not a passport or a visa but one's relationships with a place and its people. If it makes him happy to feel like he's protecting his wealth, why not? Some people move abroad to open cooking academies or run ski resorts or sail between tropical islands because those things bring them joy. To deny that happiness to someone because their idea of happiness is going all Scrooge McDuck with their money and feeling like they've "protected" it seems wrong. And it's not like the wealthy here just pony up all they owe in the first place; the IRS probably would never have gotten its fair share from the guy anyway.
posted by mdonley at 10:20 AM on August 10, 2008
And loaded as he is, I can't say I have any feelings of malice for the guy in the first article: to me, what lies at the center of citizenship is not a passport or a visa but one's relationships with a place and its people. If it makes him happy to feel like he's protecting his wealth, why not? Some people move abroad to open cooking academies or run ski resorts or sail between tropical islands because those things bring them joy. To deny that happiness to someone because their idea of happiness is going all Scrooge McDuck with their money and feeling like they've "protected" it seems wrong. And it's not like the wealthy here just pony up all they owe in the first place; the IRS probably would never have gotten its fair share from the guy anyway.
posted by mdonley at 10:20 AM on August 10, 2008
William, who resides in the Netherlands Antilles, says he also has a moral problem with the IRS requiring Americans living abroad to file annual income tax returns.
Oh, is that what they're calling that now?
posted by nanojath at 10:25 AM on August 10, 2008 [2 favorites]
Oh, is that what they're calling that now?
posted by nanojath at 10:25 AM on August 10, 2008 [2 favorites]
If the super wealthy expats aren't drawing on the public services of this country any more, why should they keep paying for them?
posted by phrontist at 10:42 AM on August 10, 2008
posted by phrontist at 10:42 AM on August 10, 2008
OFGS!
posted by DenOfSizer at 10:45 AM on August 10, 2008
posted by DenOfSizer at 10:45 AM on August 10, 2008
I love reading things from rich people advising other rich poeple on how to avoid paying taxes while taking advantage of all the services paid for by not rich people. You don't often get to see such an obvious "Fuck you, I got mine" laid out like that.
posted by cmonkey at 11:01 AM on August 10, 2008 [6 favorites]
posted by cmonkey at 11:01 AM on August 10, 2008 [6 favorites]
These folks are no different than the scumbags in Africa that take natural resource income from coal, oil, gas, wood, etc.. and deposit it in Swiss bank accounts. Same with some Russians. It's corruption. I was glad to read in the article US laws have made it more difficult. It's not romantic, it's living on the run as a thief.
posted by stbalbach at 11:03 AM on August 10, 2008
posted by stbalbach at 11:03 AM on August 10, 2008
If the super wealthy expats aren't drawing on the public services of this country any more, why should they keep paying for them?
Presumably, they did draw upon them while becoming super-wealthy. It's not like the rich are excessively taxed here in the US. Taxes are not simply payment for services, either.
posted by me & my monkey at 11:40 AM on August 10, 2008 [1 favorite]
Presumably, they did draw upon them while becoming super-wealthy. It's not like the rich are excessively taxed here in the US. Taxes are not simply payment for services, either.
posted by me & my monkey at 11:40 AM on August 10, 2008 [1 favorite]
Expat here, not that wealthy, but If I understand correctly, the US is the only country in the world with a double taxation setup.
It's a bullshit setup. I pay full taxes for the country I work in, plus (over a sizeable deduction), full taxes in the US.
That's crap.
posted by Lord_Pall at 12:08 PM on August 10, 2008 [2 favorites]
It's a bullshit setup. I pay full taxes for the country I work in, plus (over a sizeable deduction), full taxes in the US.
That's crap.
posted by Lord_Pall at 12:08 PM on August 10, 2008 [2 favorites]
Say what you like about tax avoidance, but at least it makes the poorest shoulder more of the costs of the services we all use.
posted by imperium at 12:26 PM on August 10, 2008 [1 favorite]
posted by imperium at 12:26 PM on August 10, 2008 [1 favorite]
It's not like the rich are excessively taxed here in the US.
Right, which is a glaring topic the article only alluded to. Notice you don't see high paid professionals high tailing it to other countries. In the UK, I believe it is more or less accepted that celebrities spend as little time within the UK as possible. The British tax rate is 40%, so when the Rolling Stones spend their time in Amsterdam, with a tax rate of just 1.5%, it makes quite a difference. They've only paid $7.2mil USD on earnings of $450mil USD.
I would think that it would be far easier and more rewarding to grow your capital in the US than horde it in tax-friendly nations. Certainly capital gains aren't so burdensome that it is hard or impossible to make money after $20-30 million. The Rollings Stones aren't expecting to make anymore money than they are right now. Their kids certainly won't make a half billion a year. The goal is to preserve it for as long as possible. Likewise, the majority of people mentioned in the Worth article were inheriting something. Now the issue isn't how to grow it or invest it, but how to live off of it as long as possible.
Of course theMalibu surfer problem isn't new and it is pretty clear that most of society actively discourages it. Small countries make out nicely because a few rich people, even if taxed lightly, can make up a significant portion of revenues. The problem, obviously, is I can't see Panama or Angorra refusing to deport someone for tax evasion if the US applies enough pressure. Sure a small business owner can make out nicely and fly under the radar, but Steven Cohen would have a hard time doing this.
posted by geoff. at 12:33 PM on August 10, 2008
Right, which is a glaring topic the article only alluded to. Notice you don't see high paid professionals high tailing it to other countries. In the UK, I believe it is more or less accepted that celebrities spend as little time within the UK as possible. The British tax rate is 40%, so when the Rolling Stones spend their time in Amsterdam, with a tax rate of just 1.5%, it makes quite a difference. They've only paid $7.2mil USD on earnings of $450mil USD.
I would think that it would be far easier and more rewarding to grow your capital in the US than horde it in tax-friendly nations. Certainly capital gains aren't so burdensome that it is hard or impossible to make money after $20-30 million. The Rollings Stones aren't expecting to make anymore money than they are right now. Their kids certainly won't make a half billion a year. The goal is to preserve it for as long as possible. Likewise, the majority of people mentioned in the Worth article were inheriting something. Now the issue isn't how to grow it or invest it, but how to live off of it as long as possible.
Of course theMalibu surfer problem isn't new and it is pretty clear that most of society actively discourages it. Small countries make out nicely because a few rich people, even if taxed lightly, can make up a significant portion of revenues. The problem, obviously, is I can't see Panama or Angorra refusing to deport someone for tax evasion if the US applies enough pressure. Sure a small business owner can make out nicely and fly under the radar, but Steven Cohen would have a hard time doing this.
posted by geoff. at 12:33 PM on August 10, 2008
Lord_Pall, don't forget Eritrea.
posted by chuckdarwin at 12:57 PM on August 10, 2008
posted by chuckdarwin at 12:57 PM on August 10, 2008
Mutant, I know this subject is of interest to you because of your own situation, and I sympathize. I don't think it's right that the U.S. taxes individuals who are living abroad, and earning money and paying taxes elsewhere.
That said, some people who drop their U.S. citizenship really bother me. From your first link:
This tactic provided the couple with the security and freedom of a Canadian passport, while their Bahamian residency precluded them from paying income and estate taxes after the five-year grace period ended. Anthony and his wife now spend up to six months each year in Canada, 122 days in the United States (any longer and they would be considered legal aliens who fall under U.S. tax law again) and the rest of their time in the Bahamas.
This describes a guy who owns a $30 million business and wants to leave his money to his children and grandchildren. He nauseates me--he wants all the benefits of living in stable countries without paying to support their government and infrastructure. (I wonder where he'll go for health care when faced with a serious enough ailment?) Based on a previous comment, I know you have reservations about large inheritances. Is there a line you would draw to separate good and bad instances of people renouncing citizenship?
posted by A dead Quaker at 1:48 PM on August 10, 2008
That said, some people who drop their U.S. citizenship really bother me. From your first link:
This tactic provided the couple with the security and freedom of a Canadian passport, while their Bahamian residency precluded them from paying income and estate taxes after the five-year grace period ended. Anthony and his wife now spend up to six months each year in Canada, 122 days in the United States (any longer and they would be considered legal aliens who fall under U.S. tax law again) and the rest of their time in the Bahamas.
This describes a guy who owns a $30 million business and wants to leave his money to his children and grandchildren. He nauseates me--he wants all the benefits of living in stable countries without paying to support their government and infrastructure. (I wonder where he'll go for health care when faced with a serious enough ailment?) Based on a previous comment, I know you have reservations about large inheritances. Is there a line you would draw to separate good and bad instances of people renouncing citizenship?
posted by A dead Quaker at 1:48 PM on August 10, 2008
We hate them for their freedoms.
posted by isopraxis at 1:55 PM on August 10, 2008 [2 favorites]
posted by isopraxis at 1:55 PM on August 10, 2008 [2 favorites]
I wonder where he'll go for health care when faced with a serious enough ailment?)
Anywhere he wants; he can afford it. What's sickening, as you say, is that people like this want to send mail, drive on roads, and be protected by police without paying a cent for the privilege.
posted by dirtynumbangelboy at 4:07 PM on August 10, 2008 [3 favorites]
Anywhere he wants; he can afford it. What's sickening, as you say, is that people like this want to send mail, drive on roads, and be protected by police without paying a cent for the privilege.
posted by dirtynumbangelboy at 4:07 PM on August 10, 2008 [3 favorites]
A dead Quaker, I have looked into this, and I was under the impression that once you renounce your citizenship, you can't enter the US. Am I wrong about this?
I was led to believe that it's really difficult to get away with.
posted by chuckdarwin at 2:25 AM on August 11, 2008
I was led to believe that it's really difficult to get away with.
posted by chuckdarwin at 2:25 AM on August 11, 2008
Well folks I have to admit that when I crafted the FPP I was more interested in the "Five Flags" theory, or how some people are structuring their personal affairs to minimise government meddling.
Originating and maintaining citizenship in one (perhaps more) country while living in a second, generating money in a third, parking assets in a forth and selecting a fifth nation for the bulk of your leisure time - the Five Flags - is intellectually appealing to me on some level, as these practices help to minimise the control any single government can exert over an individual.
I certainly didn't intend it to end up in a debate regarding taxes, but if we're inclined to discuss from my pov I wouldn't give up US citizenship, at least not just for money - maybe if the next administration goes really, really mental, 30's style fascism on either a single group of people or perhaps the rest of the planet I might consider renouncing, but that would certainly be a drastic step and I think that such an event (The US moving further, sharply right) is a sigma six probability. Very, very unlikely.
No for me the conundrum that the present US tax system presents is that it is one of just three countries on the planet (as others upthread pointed out, The Philippines and Eritrea are the other two) that tax on the basis of citizenship, not residency.
So I guess the question that troubles me - does the United States have this right and the rest of the planet is wrong?
In any case, taxes were sorta peripheral to the main point - increasing personal freedom - that I was considering but I guess I didn't include enough details to drive discussion in the direction I'd wanted.
Lord_Pall -- "It's a bullshit setup. I pay full taxes for the country I work in, plus (over a sizeable deduction), full taxes in the US. That's crap."
Absolutely. And when I first left the America the amount earned that wasn't taxable in the US was $95,500 (still fully taxable in the country I was working in); they've been steadily reducing it's value year after year. I'd have to ask my accountant, but I believe for 2008 its now only $80,500. What justification for reducing it they offer up I don't know, but I do know they're doing it simply because we're easy targets.
American ex-pats seem to get it from all sides. Here in England Darwin wants to tax all our assets globally, and back in the US they keep reducing our foreign earned income exclusion while increasing taxes on benefits in kind. England also seems to be tightening up on it's own citizens living and working abroad, increasing the amount of time they can claim taxes on folks after they have emigrated to another country, perhaps a lower tax regime.
Its almost as though governments are doing everything they can to discourage people from living abroad.
A dead Quaker -- "This describes a guy who owns a $30 million business and wants to leave his money to his children and grandchildren. He nauseates me--he wants all the benefits of living in stable countries without paying to support their government and infrastructure. (I wonder where he'll go for health care when faced with a serious enough ailment?) Based on a previous comment, I know you have reservations about large inheritances. Is there a line you would draw to separate good and bad instances of people renouncing citizenship?"
Personally I'd consider any renouncement driven by monetary considerations to have been undertaken for perhaps the most indefensible of motives. If someone had sound, well thought out political or moral justifications for the act, that would be entirely different. I may not agree with the reasons (I know someone who is renouncing over Iraq, for example, and that's an interesting tale) and I can accept their motives. But money? More than a little tawdry.
chuckdarwin -- "I was led to believe that it's really difficult to get away with."
I don't have any direct experience with this, but from talking to other ex-pats I've heard (FWIW) of people who have renounced and then been denied entrance while traveling on another passport. That being said, I've also been told much of the decision depends upon the officer you deal with upon entrance to the US.
posted by Mutant at 3:23 AM on August 11, 2008
Originating and maintaining citizenship in one (perhaps more) country while living in a second, generating money in a third, parking assets in a forth and selecting a fifth nation for the bulk of your leisure time - the Five Flags - is intellectually appealing to me on some level, as these practices help to minimise the control any single government can exert over an individual.
I certainly didn't intend it to end up in a debate regarding taxes, but if we're inclined to discuss from my pov I wouldn't give up US citizenship, at least not just for money - maybe if the next administration goes really, really mental, 30's style fascism on either a single group of people or perhaps the rest of the planet I might consider renouncing, but that would certainly be a drastic step and I think that such an event (The US moving further, sharply right) is a sigma six probability. Very, very unlikely.
No for me the conundrum that the present US tax system presents is that it is one of just three countries on the planet (as others upthread pointed out, The Philippines and Eritrea are the other two) that tax on the basis of citizenship, not residency.
So I guess the question that troubles me - does the United States have this right and the rest of the planet is wrong?
In any case, taxes were sorta peripheral to the main point - increasing personal freedom - that I was considering but I guess I didn't include enough details to drive discussion in the direction I'd wanted.
Lord_Pall -- "It's a bullshit setup. I pay full taxes for the country I work in, plus (over a sizeable deduction), full taxes in the US. That's crap."
Absolutely. And when I first left the America the amount earned that wasn't taxable in the US was $95,500 (still fully taxable in the country I was working in); they've been steadily reducing it's value year after year. I'd have to ask my accountant, but I believe for 2008 its now only $80,500. What justification for reducing it they offer up I don't know, but I do know they're doing it simply because we're easy targets.
American ex-pats seem to get it from all sides. Here in England Darwin wants to tax all our assets globally, and back in the US they keep reducing our foreign earned income exclusion while increasing taxes on benefits in kind. England also seems to be tightening up on it's own citizens living and working abroad, increasing the amount of time they can claim taxes on folks after they have emigrated to another country, perhaps a lower tax regime.
Its almost as though governments are doing everything they can to discourage people from living abroad.
A dead Quaker -- "This describes a guy who owns a $30 million business and wants to leave his money to his children and grandchildren. He nauseates me--he wants all the benefits of living in stable countries without paying to support their government and infrastructure. (I wonder where he'll go for health care when faced with a serious enough ailment?) Based on a previous comment, I know you have reservations about large inheritances. Is there a line you would draw to separate good and bad instances of people renouncing citizenship?"
Personally I'd consider any renouncement driven by monetary considerations to have been undertaken for perhaps the most indefensible of motives. If someone had sound, well thought out political or moral justifications for the act, that would be entirely different. I may not agree with the reasons (I know someone who is renouncing over Iraq, for example, and that's an interesting tale) and I can accept their motives. But money? More than a little tawdry.
chuckdarwin -- "I was led to believe that it's really difficult to get away with."
I don't have any direct experience with this, but from talking to other ex-pats I've heard (FWIW) of people who have renounced and then been denied entrance while traveling on another passport. That being said, I've also been told much of the decision depends upon the officer you deal with upon entrance to the US.
posted by Mutant at 3:23 AM on August 11, 2008
Here in England Darwin wants to tax all our assets globally
Darwin or Darling? :-)
posted by chuckdarwin at 3:48 AM on August 11, 2008
Darwin or Darling? :-)
posted by chuckdarwin at 3:48 AM on August 11, 2008
I pay full taxes for the country I work in, plus (over a sizeable deduction), full taxes in the US.
Full taxes in the US?
When did the US government last pay its way? No Americans pay 'full taxes'.
posted by pompomtom at 3:49 AM on August 11, 2008
Full taxes in the US?
When did the US government last pay its way? No Americans pay 'full taxes'.
posted by pompomtom at 3:49 AM on August 11, 2008
I suppose the U.S. taxes foreign income because the tax is meant to redistribute wealth. It don't see wealth redistribution as bad, but I don't see it as important either.
A much wiser goal is eliminating monopolies. A very good route would be a logarithmically progressive corporate income tax with tax courts able to charge more for monopolistic practices. So a company pays 0% on the first m million, 1% percent on the next n million, 2% on the next 5n million, etc. You materials & services would be deductible if they went to another tax paying entity, but not asset purchases or wages. Imports would be taxed accordingly too (yes, that is trickier). Congress could adjust the tax rates or corporations, as well as m and n. The IRS can raise revenue by finding monopolistic behavior (10 years of nasty trick x means 10 years paying 1% more gross). But neither may not tax individuals on less than m million (after m million people are essentially viewed as cooperations). In the end, we'd have a much leaner & meaner economy where growing your business is a good idea, but merging with another business isn't wise.
Well, mergers are normally not wise today since the stock holders almost always lose money (only the executives gain). But such a taxation scheme would convince stock holders to vote against mergers.
posted by jeffburdges at 11:25 AM on August 11, 2008
A much wiser goal is eliminating monopolies. A very good route would be a logarithmically progressive corporate income tax with tax courts able to charge more for monopolistic practices. So a company pays 0% on the first m million, 1% percent on the next n million, 2% on the next 5n million, etc. You materials & services would be deductible if they went to another tax paying entity, but not asset purchases or wages. Imports would be taxed accordingly too (yes, that is trickier). Congress could adjust the tax rates or corporations, as well as m and n. The IRS can raise revenue by finding monopolistic behavior (10 years of nasty trick x means 10 years paying 1% more gross). But neither may not tax individuals on less than m million (after m million people are essentially viewed as cooperations). In the end, we'd have a much leaner & meaner economy where growing your business is a good idea, but merging with another business isn't wise.
Well, mergers are normally not wise today since the stock holders almost always lose money (only the executives gain). But such a taxation scheme would convince stock holders to vote against mergers.
posted by jeffburdges at 11:25 AM on August 11, 2008
If you don't like the way the U.S. taxes your income, feel free to grab a Liberian passport. I understand you can live in Monrovia real cheap and they have minimal income taxes.
posted by Megafly at 12:59 PM on August 11, 2008
posted by Megafly at 12:59 PM on August 11, 2008
Scum.
posted by Pope Guilty at 3:58 PM on August 16, 2008
posted by Pope Guilty at 3:58 PM on August 16, 2008
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I mean sure, declare yourself a citizen of Andorra, and in 20 years when the People's Democratic Front of Andorra considers you an outside instigator, strips you of your citizenship and seizes all your assets, have fun living in airport terminals the rest of your life.
posted by geoff. at 10:18 AM on August 10, 2008 [1 favorite]