Given the recent IRS scandals that have been prevailing, the world’s largest collection agency went from being loathed in the eyes of Americans to being detested. So much so, in fact, that an unprecedented exodus of the nation’s wealthiest citizens has fomented as a result, seeing tax protesters unhappy with the currently overly complex tax code instead relocating to countries that have more lucrative income tax options, or in some cases, none at all.
Such a decision is not one that should be taken lightly.
After renouncing your citizenship, provided that you find a country of refuge
that will grant you permanent citizenship, you must also turn over your
passport. Forever after, you will be required to be approved for a visa when
visiting the U.S. and you will no longer enjoy the freedoms or protection of
this great nation. Yet for some that’s worth it when it equates to reducing
their annual tax liability.
The most recent of the wealthiest to depart our nation is
Facebook cofounder Eduardo Saverin, who did so much to the dissent of fellow
Americans. Some other well known persons have recently followed suit, including
celebrity Tina Turner. The primary reasons are a lower tax rate and a less
complex system. For example, Russian actor Gérard Depardieu will likely remain
in his home country because he only pays a 13% effective income tax rate; he’d
pay 75% in France; 55% in the UK; and 45% in the U.S.
There is tax costs associated with leaving the U.S. for
such reasons. Firstly, citizens must demonstrate that they have been compliant
in their taxes for at least five years. Furthermore, and most importantly, if
you earned more than $155,000 per year over the past five years, and or, have a
net worth greater than $2,000,000, you will pay an Exit Tax.
Texas Lawyer Joe Garza (B) is a prominent and respected
attorney that provides asset protection, estate planning and complex business
tax litigation services nationally. He enjoys writing about recent events that
relate to taxes as well as providing a variety of essays on topics relative to
all issues of taxation.
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