[circular_logic]

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-...

[2] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...

[bell-cot]

> ...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]

+100

[azinman2]

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.

[bell-cot]

If the unpleasantries only applied to a few very rich, who were trying to skip town that way, then you'd have a decent argument.

Unfortunately, it sounds like the vast majority of targets bear no resemblance to your stereotype. And the system has no interest in discriminating between the few filthy rich town-skippers and the vast majority who are just easy victims.

Targeting all members of large group - because a small minority of them are "bad" in some emotional-button-pushing way - has a very long and disreputable history.

[junon]

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]

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]

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".

[jleyank]

There is a real problem with the US-expst taxes when moving to a lower-taxed state... The difference is owed to the US and it's now a positive number.

[washadjeffmad]

Not to derail, but surely you're aware that tax-funded services taken for granted in those "many other places" are separate fees in the US.

[junon]

Not sure what you mean. Please explain.

[Retric]

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.

[FredPret]

Citizens are not assets of the state

[Retric]

It’s a reciprocal relationship with rights and obligations on both sides not ownership. For example the FBI doesn’t invoice victims or their families when it gets involved in kidnapping cases.

Capital gains are deferred without interest until an asset it sold, that doesn’t mean there wasn’t an obligation for those years.

[danuker]

> rights and obligations on both sides not ownership

I would say consequences of infringement are much worse for individual citizens than for the government.

If the government confiscates some of your money through "civil forfeiture", you then have to sue the government and prove the money was gained legally.

https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

On the other hand, try not filing your taxes. What happened to John McAfee might happen to you.

[Retric]

It’s not an equal relationship, but governments failing their side on wide enough scale end up failing.

[trasz]

> FBI doesn’t invoice victims

what

[Retric]

They don’t charge money to investigate crimes.

[trasz]

Just like every other civilized country. The fact that it was even mentioned suggests that for Americans it might not always be the case in some situations, which is quite frightening.

[Tostino]

For investigating a crime the victim was involved with. At least that's how I interpreted GP's comment.

[FredPret]

Reciprocal relationship = either party can end it under certain circumstances. If the taxpayer wants to move, the state has no moral right to force them to stay

[geomark]

Yeah, but receiving payments can be an issue because U.S. banks won't deal with you without a U.S. address.

[walshemj]

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]

> 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]

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]

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]

If you’re paying an electric bill the benefit associated with the debt was receiving electricity. How does that work with debt? For debt like a credit card bill it’s the money you spent when buying stuff etc. If you meant taxes then it’s government services already received, for example a strong military.

Why would a jury of peers be a benefit, unless you assume positive bias? It’s an option, you don’t need to be tried by your peers so you would only pick it if it’s better than being judged by a judge. That doesn’t mean it’s a positive bias, you might assume judges have a negative bias.

How does that work with the draft? Look at all the countries that have been invaded, compare them to countries that haven’t been. That’s the benefit of a strong military and the existence of the draft is part of that.

[Chris2048]

> it’s government services already received, for example a strong military

but you no longer benefit from the military and other services abroad?

> It’s an option, you don’t need to be tried by your peers

but you are obligated to jury duty, to the extent you have to pay to leave?

> Look at all the countries that have been invaded

all all the ones that haven't? Doesn't seem like a draft is needed.

[shell0x]

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-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 :)

[smnrchrds]

The fee for renouncing Australian citizenship is 265 AUD equivalent to 196 USD.

https://immi.homeaffairs.gov.au/citizenship/give-up-citizens...

[GordonS]

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).

[jandrese]

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

[whymauri]

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]

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]

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.

[neilc]

You do not need to be a US citizen to be eligible to collect US Social Security benefits.

https://www.aarp.org/retirement/social-security/questions-an...

[BeetleB]

Social Security is not a pension - this is a common misconception.

The SS tax is to pay current retirees. There's a formula that states how much you'll get when you retire, but the money you're putting in now is not being saved/invested for your benefit in the future.

The short version: Money you put into SS is not your money.

[jandrese]

You still put a bunch of money into it on the promise that after retirement you will have income, and that promise is broken when you renounce your citizenship. Also, Social Security is closer to real pensions than you think, they're just different from the theoretical concept of a pension that isn't actually used outside of the Post Office.

[BeetleB]

You're using vague words like "promise". "Hope" would be more accurate. Someone can correct me, but if Congress passes a law tomorrow saying they're not going to pay social security after 2025, that is probably allowed. The only "promise" is to people who are currently retired.

Furthermore, if you renounce your citizenship, it is you who are choosing not to get this benefit. It is a defined benefit for citizens, and you are choosing not to be one.

As for similarity to pensions: Far from it. When the government has an excess (i.e. total SS taxes collected is greater than payouts for a given year), they are not allowed to hold it or invest it. Pensions are/were always invested, or at least held.

[neilc]

> Furthermore, if you renounce your citizenship, it is you who are choosing not to get this benefit. It is a defined benefit for citizens

Individuals who renounce their US citizenship (or were never citizens) are still eligible to receive SS benefits; SS actually has very little to do with citizenship.

[emodendroket]

Why would they refund past taxes you'd paid?

[jandrese]

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]

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.

[ziggus]

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.

[apples_oranges]

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

[ttyprintk]

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]

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#St...

[shell0x]

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.

[cblconfederate]

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.

[javert]

"- 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.

[psychlops]

The stimulus checks allowed them to afford to renounce citizenship.

[depressedpanda]

You're assuming everyone got a stimulus check. That's not the case.