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At 06:06 22/05/2000 -1000, you wrote:
>You're right, it's not fair -- but such are the ways of a confiscatory tax
>system that is out of control.
>
>Her best option would be to give up her U.S. citizenship -- why pay for
>something that you don't need or want or plan to use. She would still be
>able to spend 180 days in the U.S. each year if she wanted to.
It's a possibility for the future (need a second citizenship not just
permanent residency). She doesn't actually pay that much tax right now
because our accountant is very good. But it's the principle of the matter
that aggravates so many US expats living abroad i.e. why should they have
to pay a goddamned dime?! Plus, the sheer hassle of having to file a
return in the US every year requires many hours/days of time and
energy. It's a total invasion in our lives! Other nationals living abroad
don't have to do this with THEIR home countries.
In the good old days, an American could just move abroad, revoke his/her
citizenship at a US embassy, and be shot of any further hassle. But about
3-4 years ago, after the numbers of supposedly 'wealthy' Americans doing
this began to show dramatic annual increases, Congress passed a law that
effectively amounts to a "departure tax". You could be fully paid up with
your taxes in the US, have done nothing illegal ...yet if your net worth is
above a certain amount and you are moving to a lower tax jurisdiction, they
will come after you with all guns blazing and demand a rather large % of
your net worth before letting you go! They also gave themselves the right
to pursue a claim on your finances for up to TEN years after you've given
up citizenship ...if they believe your motive for leaving is to be
financially better off!
How's that for fun and a tax regime gone totally nuts? The ridiculous
thing of course is that this law hasn't slowed the numbers of Americans
leaving town (their accountants usually stay one step ahead of the IRS and
find loopholes). If anything, the departure tax has convinced those
undecided folks that they really need to do before it gets any worse! Next
thing you know, currency controls will be placed at the border. You won't
be allowed to take your money abroad. Paranoia? ...maybe. Then again, a
serious recession leading a President Buchanan to "seal" the borders
...maybe not!
Simon.
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