Americans renouncing citizenship to become British over taxes

[Guard Dog]

Excerpt:

 

 

Americans renouncing citizenship to become British thanks to tax rise
        
The number of people giving up their US citizenship to become British has
surged thanks to complex tax rules introduced by the American tax
authorities.
 

London-based American lawyers, who specialise in tax and immigration, report a
threefold increase over the last five years in the number of American
citizens who are giving up their citizenship - a process known as
“renunciation”.

Across the world 1,781 Americans renounced their citizenship in 2011 compared
with just 231 in 2008, when US tax laws changed, although it remains unknown
how many are adopting British rather than any other nationality.

Many decide to give up their American citizenship after tiring of the lengthy
US tax return process, which requires them to pay tax on their total income
regardless of where they live.

“There’s no question that the number of people renouncing their US citizenship
is increasing,” said Diane Gelon, a US tax and immigration lawyer based in
London.

“I probably get a dozen cases a year now when before 2008 when the tax laws
changed it was just three or four.”

 

Rest is here: http://www.telegraph.co.uk/expat/9904314/Americans-renouncing-citizenship-to-become-British-thanks-to-tax-rise.html

 

Wait a minute... we stopped being British over taxes. Actually I'm suprised to find the US Tax system has become more onerus than Britans. And on another note isn't this just what Great Britan needs, a bunch of foreign nationals moving in wanting to do everything their way? Kind of like Piers Morgan is doing here?

 

So many directions to go with this one. Watch out Wals, Raithe, and the rest...the Yankees are coming!

 

[Valsuelm]

The article is mostly bunk. While many Americans may be looking to leave now more than ever, I doubt any of those looking to live in England over the U.S. are doing it solely for tax purposes.

 

That said, the tax issue is a legitimate one. However, an American looking to flee to the U.K. over taxes or anything else is like a German in the 30s looking to flee to the U.S.S.R. for a better life. Situations can vary person to person though, and all is relative, so to each their own.

[Hiro Protagonist]

an American looking to flee to the U.K. over taxes or anything else is like a German in the 30s looking to flee to the U.S.S.R. for a better life.

 

You're comparing the UK to the USSR? I never realised the UK was so similar.

[Valsuelm]

 

an American looking to flee to the U.K. over taxes or anything else is like a German in the 30s looking to flee to the U.S.S.R. for a better life.

 

You're comparing the UK to the USSR? I never realised the UK was so similar.

 

No, it was an analogy. Like most any other analogy, a direct comparison is not made, but a relative one was.

[Hurlshort]

I thought this had more to do with the IRS finding a way to get all the reliable tax shelters to start disclosing how much US citizens really have.  

 

Regardless I really have no input here.  These are typically people with a lot of money, so it is hard to really understand the rationale.  Are taxes that much lower in the UK?  Is it just easier to hide your money from the UK than the US?  I have no idea.

[Hiro Protagonist]

No, it was an analogy. Like most any other analogy, a direct comparison is not made, but a relative one was.

 

So how is the UK relative to the USSR?

[Valsuelm]

I thought this had more to do with the IRS finding a way to get all the reliable tax shelters to start disclosing how much US citizens really have.  

 

Regardless I really have no input here.  These are typically people with a lot of money, so it is hard to really understand the rationale.  Are taxes that much lower in the UK?  Is it just easier to hide your money from the UK than the US?  I have no idea.

 

It does have something to do with it, but you don't need to be a millionaire to have it affect you.

 

The problem is (and this depends on the nation abroad you work in), that in many places you get double taxed. If you live and work in England for example as a U.S. citizen you'll pay local income taxes, and then the IRS will expect you to pay them as well (though last I knew it was at a reduced rate). So in the case of many people in that article they're probably not fleeing the U.S. due to tax issues (as some high profile folks in France are for example), but already living and working in the U.K. and are tired of paying local taxes AND sending taxes back to the IRS.

 

The same thing happens within the states. Some states that have state income taxes will expect you to pay income taxes on your income even if you earned most or all of it in another state if you reside part time or on paper in that state. While other states will expect you to pay their income taxes if you work in their state but reside in another. And some states (these days I'd wager all of the states that collect income taxes), expect you to pay in both situations. In some cases it's lead to lawsuits between the states themselves and individuals on who gets the right to tax individuals income. ie: there have been numerous issues over the years between New York State, New York City, and the various states around it (like NJ., Conn. and PA.) over who gets to tax the income of a person living in one state but that drives over the border to work in another. At some times people were expected to pay both taxes. What the situation is currently I don't know.

 

Why I say it depends on the nation you live and work in is that some nations (most of Europe) it's harder to not let the IRS know what you're earning due to modern banking regulations, whereas in other nations it's relatively easy to not let the IRS know how much you didn't or did make, and you're free to attempt to hide your earnings.

 

The IRS really shouldn't be taxing people on wages abroad. They didn't used to. Then again, I don't think the IRS should be taxing anyone's wages ever or that it should even exist, but that's another much larger subject.

 

It shouldn't be hard for most people to imagine some resentment on behalf of anyone that's required to send taxes off to somewhere they aren't currently residing in, especially if that person is paying those taxes on top of the taxes that they're expected to pay where they are currently residing.

Edited March 3, 2013 by Valsuelm

[Morgoth]

Wait what?

 

That's like the dumbest thing you could do. Taxes in Britannia > Amerikkka.

[Gorth]

...and here I thought Americans were migrating to North Korea because their leader is so much better than the current incumbent

[Nonek]

Okay we'll have your tax dodgers but please take back Madonna. Pretty please.

[Guard Dog]

Okay we'll have your tax dodgers but please take back Madonna. Pretty please.

Ugh, all right we'll take back Madonna but you have to take back Piers Morgan and Sharon Osbourne. Ozzy can stay, he's harmless. Deal?

Edited March 3, 2013 by Guard Dog

[Meshugger]

I for one, hope that this will be the beginning of the second empire: Britannia (now with lower taxes)

[Guard Dog]

You know guys there are some topics that merit serious discussion. I really didn't figure this was one of them. Far more American ex-pats flee to Central and South America and Mexico than GB. Ever been to Cabo San Lucas? I think there is more Americans than Mexicans there.There are probably around 50,000-70,000 US citizens living in GB right now on only 1700 or so are looking to stay permanently over taxes. Not exactly an overwhelming percentage.
 

Taxes do merit serious discussion because, as you all know, there is a point where they do far more harm than good and most countries this one included passed that up a long time ago. But this story was so deliciously ironic I figured we'd get some laughs out of it.

[BruceVC]

You know guys there are some topics that merit serious discussion. I really didn't figure this was one of them. Far more American ex-pats flee to Central and South America and Mexico than GB. Ever been to Cabo San Lucas? I think there is more Americans than Mexicans there.There are probably around 50,000-70,000 US citizens living in GB right now on only 1700 or so are looking to stay permanently over taxes. Not exactly an overwhelming percentage.

 

Taxes do merit serious discussion because, as you all know, there is a point where they do far more harm than good and most countries this one included passed that up a long time ago. But this story was so deliciously ironic I figured we'd get some laughs out of it.

 

 

Taxes should be one of the last reasons someone from the USA wants to immigrate to the UK.

 

There economic recovery has been much worse and slower than most predicted. Austerity isn't working there as expected, its a similar issue throughout Europe. I love the UK but if you think moving at the moment  from the USA will give you an economic advantage you need to reconsider that option.

 

But they are unsurpassed in there knowledge of how to make a killer English Breakfast, so that could be a reason to immigrate?

[Walsingham]

Gentlemen, please!

 

In the spirit of Atlantic amity I propose we seal Piers Morgan in an oil drum and dump him in the ocean mid-way across. Madonna can be easily burned as a witch under some old legislation. Sharon Osbourne can be packed off to French Guyana, because I don't know where it is.

[Zoraptor]

Austerity isn't working there as expected, its a similar issue throughout Europe.

Austerity is working pretty much exactly as expected- if you take large amounts of money out of the economy it will contract and that is what happened/ is happening. It isn't even reducing debt, it's just reducing the rate at which it accumulates. Only way to fix it is to build a time machine, go back to high growth years and politely suggest that (1) banks aren't omnipotent and cannot suspend reality by wishing real hard/ giving big donations and (2) running deficits in good years as well as bad is moronic, poor stewardship, and cannot be sustained.

[Wrath of Dagon]

@Wals

Now you're talking sense.

 

Btw Americans don't have to pay double taxes because any foreign taxes paid are credited against US taxes. Of course if you have to pay AMT the rules involved would make satan cry (I think the first line asks if you're a whaling captain), so there's some kind of issue there.

Edited March 3, 2013 by Wrath of Dagon

[rjshae]

That's not cricket!

[JFSOCC]

taxes in the UK are higher, so I wonder what they're trying to accomplish. this article must be fake.

[Valsuelm]

taxes in the UK are higher, so I wonder what they're trying to accomplish. this article must be fake.

 

It's not fake. it's a legitimately horribly written article, like so many others. The headline is very misleading and isn't backed up by what's in the article itself or reality in any way.

[Gorgon]

You should become Russians. 13%. Beat that with a stick.

[Wrath of Dagon]

Not so long as stuff like that is going on : http://en.wikipedia.org/wiki/Sergei_Magnitsky

[Calax]

You should become Russians. 13%. Beat that with a stick.

If I get the tax refund for makin babies every year for every kid made >.>

[BruceVC]

 

Austerity isn't working there as expected, its a similar issue throughout Europe.

Austerity is working pretty much exactly as expected- if you take large amounts of money out of the economy it will contract and that is what happened/ is happening. It isn't even reducing debt, it's just reducing the rate at which it accumulates. Only way to fix it is to build a time machine, go back to high growth years and politely suggest that (1) banks aren't omnipotent and cannot suspend reality by wishing real hard/ giving big donations and (2) running deficits in good years as well as bad is moronic, poor stewardship, and cannot be sustained.

 

 

To be fair the intention of austerity is not suppose to be failure. Reduce  government and wasteful spending and then get people and companies  to reinvest in the economy to allow growth. But what is happening is governments are implementing there own austerity measures so you naturally have jobs losses in the public sector but the private sector is reluctant to reinvest or hire new people so economies are stagnant. I don't believe this is a fault of austerity.

 

Of course we need to look at each country on its own to analyze the success or failure of the austerity measures.

[PK htiw klaw eriF]

To be fair the intention of austerity is not suppose to be failure. Reduce  government and wasteful spending and then get people and companies  to reinvest in the economy to allow growth. But what is happening is governments are implementing there own austerity measures so you naturally have jobs losses in the public sector but the private sector is reluctant to reinvest or hire new people so economies are stagnant. I don't believe this is a fault of austerity.

I think you're confusing what people who hype austerity measures say and what austerity measures actually do.

 

People who hype austerity proclaim that companies are too nervous about uncertainty, so they are not spending money and that by cutting programs, more people/businesses will suddenly invest/spend money. They typically use immeasurable variables in their arguments(like "confidence" and "uncertainty") and engage in a bit of fear-mongering to advance policies that do not work very well.

 

What austerity does is reduce the amount of money the government is spending, which reduces the total amount of spending going on in the economy. Austerity is typically a good idea in years where the economy is doing well, where the scaling back of government spending will not have as large of an effect as it would in a situation where people/business were not spending very much(like right now). The problem with austerity measures in times like these is that there is no guarantee that people/business will start investing to make up for reduced government spending, and can result in higher unemployment and less total spending(and often does, if you look at the results of European austerity measures).

 

So austerity is doing exactly what it is supposed to do, which is to slow the growth of an economy. It is not helping an economy grow, because that is the opposite of what it is designed to do.