Escaping the clutches of Uncle Sam
In our office, we deal a lot with people who are looking to enter the US to work, and most of whom are happy for the opportunity. There are, however, an increasing number of foreign residents who are US citizens, and who not only have no intention of living in the US, but who are actively seeking to lose their US citizenship. The reason? Taxes. The US taxes its citizens on worldwide income, unlike most other countries, resulting in significant double taxation for many US expats.
As the Economist reports, this trickle may soon turn to a flood as a new law comes into effect. The US has long had provisions in the tax code to ensure that expats who renounce their citizenship for tax reasons pay up before doing so. New provisions, however, require that renouncing citizens with a net worth of more than $2 million in assets or high income pay tax on all of their assets at the time of renunciation, which may well cause those who expect to join that rarified company to jump ship a little earlier.
Tags: citizenship, renounce, Tax, US
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