
United States Expatriation at an All-Time High - kghamilton89
https://axibase.github.io/atsd-use-cases/Expatriation_Q2/
======
nvarsj
As an expat, the main reason I'd give up my citizenship is dealing with the
extremely onerous IRS and FINCEN filing requirements. Last year I probably
spent 20-40 hours on this crap, just to prove I owe nothing. My tax return has
been to tax court even though it was 100% perfect, simply because IRS doesn't
have the expertise to evaluate their own murky laws around foreign employment.
Everything is okay as long as you are a permanent employee without a self-
controlled pension. Step out of the bounds and you're in for a world of pain.
It seems so unnecessary and stupid to me. You also get double taxed on some
things, like house purchase/sales in the UK. Expats really get the shaft from
the US gov.

Note it's not cheap to expatriate either. It's 2000 a family member plus
possible exit tax. IRS can also pursue you for taxes afterwards if they think
you did it to explicitly avoid taxes. There is no 100% escape.

~~~
pentae
The old Hotel California rule. US Citizens are the only people in the world
(besides a very small african nation) that still have to file and pay income
taxes back home when they are no longer living in the United States. So much
for being free.

~~~
whatnotests
I hear North Korea has a similar policy.

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m_fayer
I know many American expats here in Berlin in the high-tech and academic
worlds. Many say that the current political climate in the US greased the
skids for their expatriation. No one says that the impetus was only the
political situation, or that they will never return, but rather that it's a
major factor in reducing the resistance to expatriation. For many, even those
who aren't particularly partisan, the US political situation has become a
source of constant low-level anxiety at best, and that generates a kind of
exhaustion that makes it easy to throw up your hands and think "to hell with
all this."

~~~
gozur88
I don't see how that's rational after what happened in Hamburg last month.

~~~
tormeh
There were 15 school shootings in the US last year, according to Wikipedia.
Shure, Germany has revolutionary communists, anarchists and néonazis, but the
US is a wild place too.

I'm sure this image has been distorted by Hollywood et al., but I have the
impression that the US is a particularly violent place, at least when compared
to Western countries of similar development.

~~~
snoue798rcs
The US is not a particularly violent place for the majority of people in it.
There are certainly parts of it that are, but chances are someone reading
hacker news would never end up in those parts.

I've lived in Atlanta, Chicago, Boston, Miami, Los Angeles, even Flint,
Michigan and have even been to some of the less nice parts of those areas.
I've never been mugged or beat up or even threatened really. I've had my car
broken into once or twice in 50 years, but I was not in or near it at the
time. The image Hollywood projects is extremely distorted. I've even known
lots of people who owned or really loved guns, and none of them has ever done
anything violent with them as far as I know.

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zapperdapper
Interesting, but it's been a growing trend. US is one of the few countries
that taxes its citizens who move abroad. This leads many to give up their US
passport/citizenship. You may also know that US citizens who open bank
accounts here in UK have to declare, specifically that they are US citizens.
It's basically a checkbox you clear (or not). That is then flagged back to
some 'entity' in the US presumably...

One thing I did notice that was interesting. If you click the 'raw data' from
the Federal Register and scroll down the list of those who have given up
citizenship there is one 'Steven Ballmer' listed..I had to chuckle at that
one...

~~~
cr1895
>US is one of the few countries that taxes its citizens who move abroad.

More precisely it is taxation by citizenship, not residence.

For example, the Netherlands will happily tax everyone on their _assets_
worldwide, but you're not going to be paying Dutch income taxes if you're not
living and working in the Netherlands.

~~~
UnoriginalGuy
> More precisely it is taxation by citizenship, not residence.

Both. Non-citizens (inc. illegal immigrants) are required to pay US taxes just
for residing in the United States. The US will actually give non-citizens a
unique tax ID (TIN) for this express purpose.

So the US will tax both based on residential status AND citizenship status.

~~~
tormeh
To paraphrase: "Illegal immigrants to the US are required to pay US taxes"

That's... Slightly insane?

~~~
marcoperaza
You are also required to pay taxes on profits from illegal activity. Breaking
one law doesn't exempt you from following another.

~~~
tormeh
Well, if an illegal immigrant files taxes, then they're registered in the
system and will be thrown out, right? If you're illegally in a country you
presumably have to stay hidden in order to not be thrown out, and if you pay
taxes you're not hidden anymore.

~~~
jwhitlark
No. The There are laws against the IRS reporting illegal income to other
agencies. If you pay your taxes, the IRS has no problem with you, and any
violation you have with another agency is not their problem.

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macrael
The absolute numbers are still pretty small, though. In 2000 273 people
renounced their passports. This year, 6800 people have so far. A big increase,
but still a drop in the bucket compared to the 700k that were naturalized.

~~~
Iv
That only captures the flow toward countries that refuse double nationality. 9
out of 10 of the most common names for those are Asian (Chinese mainly, at
least one Vietnamese and at least two Korean)

Most people will keep their passports even when residing long term abroad.

~~~
torrent-of-ions
Many don't keep their US passport even if they can to avoid paying tax.

~~~
doktrin
US worldwide taxation is incredibly obnoxious, but the benefits of keeping a
US passport still outweigh the drawbacks for many. That's not guaranteed to
last forever, though.

~~~
eloisant
If I'm correct you only have to do a federal tax return (not state) and you
have a tax credit equal to what you paid in your residence country.

So yes, I understand filling a tax return is a chore, but you'll only pay
taxes if the amount you paid in your residence country is lower that what you
would have paid in federal taxes alone.

Considering how low US income tax is, in most countries you won't have to pay
anything.

~~~
pc86
> _how low US income tax is_

Compared to what? The maximum federal rate is nearly 40%. Yes, there are many
many countries with maximum rates in the 50-60% range. But 40%, even marginal,
is not low.

~~~
etherael
It's _extremely high_.

[https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates](https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates)

Sort by max individual rate, it's 8th from the top in a list 221 countries
long.

~~~
pc86
Only if you include state rates, which is.. disingenuous at best. It's at
least as wrong as saying the US has very low tax rates. If you're talking
about expatriation, the IRS, etc, you're only talking about Federal rates.
Short of _outlawing_ income tax the Federal government has very little power
over dictating state tax rates.

At the Federal level personal taxation is not terrible but it's not low,
either. The US has the second higher corporate income tax in the world
according to that same chart, and the highest depending on your state of
incorporation/operation (if you include state/local).

~~~
etherael
I disagree. The context of the original quote was;

> Considering how low US income tax is

Now I do understand what you mean when you make the distinction that for
expatriate taxation based on citizenship, only the federal taxes are
considered, but that is not what the original language actually said in the
context of the statement regarding how low US income tax is, and weasel
language to push a political agenda is annoying at the best of times.

To be scrupulously fair and expose my biases though, frankly even federal
taxes alone are high as far as I'm concerned. Any amount is high when you're
forced by threats of violence to pay it. The appropriate amount gathered by
that method ought to be zero percent.

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sergefaguet
Makes perfect sense. The US is the most wealthy-unfriendly tax regime in the
world. I have friends who have never lived or worked in the US amd yet are
asked to pay high US taxes. They hate it and will leave. The people who get
naturalized are all people with no meaningful assets. Plus many global banks
will not open us citizens accounts.

In other words being a US citizen is no upside and all downside.

~~~
braythwayt
> The US is the most wealthy-unfriendly tax regime in the world.

I'd like to hear more about this. I'm a Canadian, and our conservative
politicians are always saying that WE are the most wealthy-unfriendly tax
regime in the world, and that it is stifling investment.

And I keep reading about how in Scandanavian countries, the rich have to give
nearly all of their income back to the state, but they are impossibly nice
people, so they don't mind. Are Sweden, Norway, Finland, and Denmark
friendlier to the wealthy AND providing Universal Health Care to their
citizens?

~~~
Nekorosu
Hi. I'm a Russian citizen living in Sweden. I have a work visa.

The income tax is progressive and hits the ceiling of 60% pretty fast. I don't
remember exactly but I think it does if your salary is more than 60000 Swedish
kronas (around 6000 euros). Universal Health Care is available to everyone who
has Swedish ID (I do) and includes higher cost protection for dental services.

Without diving in I can tell Sweden is definitely not friendly to the wealthy
but it's very friendly to a lot of people with everyday common jobs with lower
and middle level salaries.

~~~
ptr
Au contraire. The high taxes in Sweden are on income (and consumption).
Capital gains tax is maximum 30%, the property "tax" is low, and there's no
"asset tax."

~~~
Nekorosu
I see. I've interpreted "the wealthy" meaning too narrow and haven't taken in
account everything you've mentioned.

Thanks for the info.

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uoaei
How does one differentiate "expatriate" and "emigrant"? Why is the term
"expatriate" only reserved for those who originate from Western countries?

~~~
24gttghh
expatriate: a person who lives outside their native country.

emigrant: a person who leaves their own country in order to settle permanently
in another.

~~~
kalleboo
So the article is talking about both? Because if you're giving up your
citizenship you're certainly not planning on going back.

~~~
24gttghh
The article mentions 'expat' 24 times, and does not mention 'emigrant' once.
The GP's question is a bit of a tangent from the article at hand.

Also, one does not necessarily give up their citizenship to become an expat
somewhere else.

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zip1234
It says the NUMBER of people doing so is at an all time high. How many per
capita? The absolute number is kind of silly to use as the population grows
over time...

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mmosta
Well written and well presented.

This exactly the kind of solid out-reach that gets me to click through and
take a look at the axibase product.

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squozzer
>Abraham Lincoln’s second term was viewed as the tightening of federal
authority to excessive levels that ultimately led to the American Civil War

By Lincoln's second term, the American Civil War was already underway.

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dade_
Based on the names, could it just be that the baby boomers are retiring and
going home? They are a very large demographic and I imagine their options for
reasonable priced healthcare insurance are shrinking.

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MarchHare
I find myself in the odd position of hoping for republican tax reform to
happen, if only for the repeal of FATCA (S. 869)

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throw2bit
Its funny to see if a first world country citizen moves to another country he
is called an Expat and the third world citizens are called immigrants.

A common misconception. If you have given up your US citizenship, you are an
immigrant. Not an expat.

~~~
return0
People have a reason to make that distinction. You are not bound to see
humanitarian aid for expats anytime soon.

Also, i dont think it's a term reserved for westerners. What do you call a
rich saudi who currently lives in miami, an immigrant?

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ForRealsies
So they replace constant low-level anxiety of politics with low-level anxiety
of getting hit by a truck?

~~~
mikeash
The traffic fatality rate per capita in Germany about 40% of what it is in the
US.

I assume you were referring to terrorist attacks, but a stupid, inattentive,
or drunk driver will kill you just as dead.

~~~
Xylakant
Case in point: the number of cyclists killed in Berlin traffic 2016 was higher
than the number of people killed by terrorist attacks. Providing safe traffic
infrastructure may have a better ROI than all the anti-terror measures. It's
just that we have accepted traffic deaths as inevitable and they happen one by
one and terror attacks are one big event that people think is somehow
magically preventable. (In truth, the 2016 attack would have been preventable
had autorities arrested the attack instead of stopping the existing
surveillance, but most traffic death would be preventable as well)

~~~
maxerickson
Traffic deaths are not entirely accepted. There is a constant trajectory of
better infrastructure and more safety systems in vehicles.

Of course we are still accepting traffic deaths at some level, but there is a
lot of effort and resources devoted to reducing them over time. It's just
expensive and disruptive.

