More U.S. Citizens Renouncing Citizenship To Escape U.S. Taxes, Despite Historically Low U.S. Tax Rates

 
More U.S. Citizens Renouncing Citizenship To Escape U.S. Taxes, Despite Historically Low U.S. Tax Rates

By Jonathan Vankin, Tue, November 19, 2013



More Americans than ever before are voluntarily giving up their U.S. citizenship, mainly to skip out on U.S. taxes. The Treasury Department recently published a list of 560 former citizens who have chosen to no longer be Americans, with 2013 on pace to set a record for what are called “expatriations,” breaking the previous mark set just two years ago.

While it’s impossible to know the personal motivations of each ex-citizen, the desire to avoid paying U.S. taxes is often thought to be a primary reason.

For example, in 2011 Facebook co-founder Eduardo Saverin fled to Singapore, trashing his U.S. citizenship papers on the way out. His reason: to dodge capital gains taxes he would have to pay when Facebook went public.

But before you burn your U.S. passport, there is one important fact to consider. The United States currently boasts among the lowest taxes in the world, among economically developed nations.

In fact, only Turkey, Mexico and Chile tax their citizens less than the United States, with taxes measured the traditional way, as percentage of Gross Domestic Product. The U.S. charges its taxpayers just 14.8 percent of GDP (based on 2011 numbers). Most European countries tax at rates of 40 percent of GDP or higher.

Switzerland, the country where singer Tina Turner (pictured) is now a citizen after giving up her U.S. citizenship this past April, collects about 30 percent of its GDP in taxes, low for Europe, but twice as high as in America.

Of course, there is more to pay for in European countries which inevitably grant their citizens greater social services, such as national health care, than the United States.

As of 2011, U.S. taxes were the lowest they had been in 60 years.

And yet, according to one immigration expert, the current exodus of Americans is all due to fear of high taxes.

“Current or anticipated changes in tax law and enforcement are driving this increase,” immigration attorney Freddi Weintraub told the Wall Street Journal.

Though Americans like to think of themselves as a patriotic people, renouncing U.S. citizenship is not a new phenomenon, predating even Tina Turner.

For example, Earl Tupper, founder of Tupperware, renounced his citizenship in 1958 for Costa Rica to duck U.S. taxes. He left his wife and bought his own island off the coast after selling his now-iconic company.

Film director John Huston, famous for The Maltese Falcon and other cinema classics, switched his citizenship to Irish in the early 1950s, fed up with the anti-Communist witch hunts of the McCarthy era.
The now-legendary novelist Henry James became a British subject in protest of American refusal to get involved in World War I.

And sex researcher Shere Hite, author of the 1976 bestselling book, The Hite Report on Female Sexuality, became a German citizen in 1995, blaming “the growing clamping down on independent thought in the U.S.”


http://www.opposingviews.com/i/politics/more-us-citizens-renouncing-citizenship-escape-us-taxes-despite-historically-low-us-tax



SOURCES for this article: Daily Finance, Time Magazine, United Liberty, New York Times (2), Tax Policy Center, FactCheck.org

The author forgets to mention the exit tax imposed by the IRS on anyone who wants to leave.  You can leave without it, you just can't take your money.  There are many more places with tax advantages than mentioned here, many countries, unlike the US and Europeans, don't tax income from sources outside the country.  The US has bullied a lot of former "tax havens" into turning over all records of US citizen's finances, but there are still very good places with stable currencies and governments.