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Getbig Main Boards => Politics and Political Issues Board => Topic started by: loco on February 15, 2013, 04:06:11 AM
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Wed, Feb 13, 2013
As Americans face higher taxes and stricter enforcement, a growing number of them are, indeed, deciding to turn in their US passports. As of 2013, 77% of Americans will pay higher federal tax rates because the cuts in Social Security payroll taxes expired when Congress passed its tax package on New Year’s Day.
But the wealthiest households face the highest tax increases. From 2009 to 2011, the number of expatriates, or those who renounced their U.S. citizenship, doubled to 1,781.
Nigel Green, CEO of deVere Group, which provides financial services for expatriates, said that since the start of this year, 48% more of his clients in January than in a typical month inquired about moving funds abroad and the possible tax implications of changing citizenship.
The income tax rate rose this year to 39.6% from 35% for individuals earning more than $400,000 a year and married couples earning more than $450,000.
The Tax Policy Center estimated that those who earn more than $1 million would pay an average of $170,341 more in taxes.
Green said there’s a tipping point for most people with regard to tax issues affecting their choice of location and citizenship. “If there’s only 10% tax [on income], no one would be leaving. But if there’s 90%, then most people would leave,” he said.
Federal taxes aren’t the only issue, though. Increases in state income tax rates factor into these decisions as well. Recently, California enacted Proposition 30, which raised state income tax rates to 10.3% from 9.3% for individuals making at least $250,000 and 13.3% from 10.3% for those earning at least $1 million. Golfer Phil Mickelson publicly voiced his concern over the tax increases and threatened to leave California because of the higher rates.
(http://l1.yimg.com/bt/api/res/1.2/SWYAPkC5ERFOTb3X1V4B9g--/YXBwaWQ9eW5ld3M7cT04NTt3PTYzMA--/http://l.yimg.com/os/284/2013/02/11/expats-jpg_172214.jpg)
The chart above shows the growing trend of expatriates in the U.S. The Federal Register first started recording the number in 1997. (The high number of expatriations that year is thought to be a result of Hong Kong reverting back to Chinese sovereignty, according to tax attorney Andrew Mitchel. Chinese citizens are not allowed to have dual citizenship, so many Hong Kong residents renounced their U.S. citizenship prior to Hong Kong joining China in 1997, so they would become fully Chinese citizens.)
When it comes to changing nationalities though, Asia seems to be the popular country of choice, Green said. He sees many clients leaving the U.S., the U.K. and other European nations and moving to Asia. “In Hong Kong a person can be paying as little as 15% for income tax, and in New York it can be 40%,” he said. Many Middle Eastern countries don’t tax income at all.
“If you don’t mind where you live and the tax becomes excessive, then leaving might be a good choice,” Green said. “Countries have less of a hold on people. Governments have to raise more taxes, but they can’t go too far.”
http://finance.yahoo.com/news/should-you-renounce-your-citizenship-144048875.html
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Hope and change