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There's A Law That Takes Away Money If You Leave U.S. Citizenship

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posted on Jul, 13 2009 @ 01:06 AM
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A lot of people probably can't understand why someone would voluntarily give up American citizenship -- but if someone wanted to do that, they'd now incur financial penalties for it.

Congress just passed a new law that will stop your capital -- or at least a good portion of it -- at the border, should you decide not to be a U.S. citizen anymore. Is it, perhaps, in preparation for the possibility that Americans might rebel at the debt and taxes incurred by their government by leaving for lower-tax locales?

You probably didn't notice this little provision inserted into the Heroes Act of 2008, passed by Congress on June 17. The headlines in the press release about the law were about the increased benefits for veterans and families of deceased military.

But Richard Kohan of Price WaterhouseCoopers drew my attention to one section of the act, which states that anyone voluntarily giving up his or her citizenship will be taxed on all of his assets as if he or she had sold them -- paying capital gains on assets that have increased in value, even though they have not been sold.


Source

We never really have the freedom to own anything, only the limited privilege granted by government to temporarily hold things. They can rescind that privilege at any time at their discretion without recourse. Whether it be our money, our home or our toys.

I wonder about the corporations that leave the U.S. and outsource jobs to other countries. Do they get taxed heavily as well?




posted on Jul, 13 2009 @ 01:18 AM
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This is utterly amazing that things like thins would pass here in the US of A. Now if you are fed up with your government and feel you can make a better go somewhere else, they are going to try to get your share of government's national debt that they have rang up with a fake stimulas that has stimulated nothing. Freedom to love the flag, freedom to love your country, freedom to move about the country (for now), but the freedom to move to a country that is going to help you get a head in business or to reconnect with your roots, not so fast. You need to pay the piper first and if you can't afford it, too bad, looks like you're stuck here.



posted on Jul, 13 2009 @ 01:23 AM
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The law was not "just passed". It became effective in June of 2008.

It's actually called the Heroes Earnings Assistance and Relief Tax Act of 2008. The purpose of the provision is to prevent people from giving up their U.S. citizenship in order to avoid paying U.S. taxes. There is an exemption of $600,000 in capital gains and not all gains are taxable.

www.docstoc.com...

[edit on 7/13/2009 by Phage]



posted on Jul, 13 2009 @ 01:36 AM
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reply to post by Phage
 


Yes, the article stated just passed. But, the article was not recently written. I haven't seen this posted and thought I'd share with the community.



posted on Jul, 13 2009 @ 02:00 AM
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What's interesting is that it doesn't cover only US citizens: it also applies to permanent residents who decide to leave after a minimum of 8 years.

As an expat, I find that a little disturbing. I know quite a few Japanese working in the USA, who plan to return to Japan to retire, on in some cases return to Japan when the kids get to school age. Under this law, they won't be able to - they'll either have to (a) take a massive tax hit (b) renounce their Japanese citizenship and adopt US citizenship (can't have both) or (c) live out their days as a permanent resident - a marginalized status at best - in a country that they might not want to be in.

That's pretty nasty - and it will certainly affect the amount of foreign talent coming to the USA to work and do research.



posted on Jul, 13 2009 @ 09:22 AM
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Wouldn't it be just as easy to plan for the departure? Slowly sell off your stuff or send it to relatives overseas? Then when you are ready to leave, donate everything you have left to charity or whatever?

I agree the law if rediculous. Just another example of bundling bad laws in a package with the title of a good law. The president doesn't dare veto it because it is bad PR. And no line item veto (which apparently some people think gives the president too much power ??)



posted on Jul, 13 2009 @ 09:37 AM
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Yes I remember this from a year ago. It runs somewhat counter to the whole "if you don't like it then get out" cliche.



posted on Jul, 13 2009 @ 10:36 AM
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How would anyone know if you left the US? Slowly transfer all your stuff to another account and then renounce citizenship when in another country.



posted on Jul, 13 2009 @ 10:45 AM
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reply to post by rogerstigers
 

If you sell your assets before you leave you will still owe capital gains tax on it.



posted on Jul, 13 2009 @ 10:47 AM
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reply to post by Fett Pinkus
 

Transfer your "stuff" to another account? Your real estate? Your portfolio? This law concerns capital gains.



posted on Jul, 13 2009 @ 10:54 AM
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Not that I was trying to circumvent the new law or anything, but I have been in the process of permanently resettling outside the U.S. for several years now.

I have slowly transferred all of my assets out of the U.S., and put my businesses into the name of my foreign citizen spouse.

I do not intend to give up my U.S. citizenship, and will pay taxes on any income "I" earn. I like to vote in the U.S. still and collect my military retirement.

I am unsure of the details, but seem to remember another law about abandoning yor U.S. citizenship. I think you are required to pay taxes to the U.S. for 10 years afterwards.



posted on Jul, 13 2009 @ 11:10 AM
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reply to post by Phage
 


I understand that. I guess my point was that they can't take what you don't have and they can't know what you don't tell them. Still there are holes in my logic.. *shrug* Needs more work.


Best way to get around the law is to "dissapear" anyway.



posted on Jul, 13 2009 @ 11:10 AM
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reply to post by jhill76
 


if you're in a different country, good luck to the IRS or whoever to come find you to pay the bogus bill.




posted on Jul, 13 2009 @ 11:16 AM
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reply to post by warrenb
 


I think the law involves assets in the U.S. They will tax as the money leaves the U.S. I also think cars, houses, boats and the like we have in the U.S. will be taxed as if they were sold.



posted on Jul, 13 2009 @ 12:01 PM
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reply to post by warrenb
 


That's what I am thinking. If you just up and leave, how can they come after you. Or, before you can even denounce citizenship they get send you a bill?

So, how does that work, do you have to get approval from the US to denounce or does the new country grant this request once you are abroad?



posted on Jul, 13 2009 @ 01:07 PM
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Originally posted by vox2442

...That's pretty nasty - and it will certainly affect the amount of foreign talent coming to the USA to work and do research.


The rate of foreign talent coming in probably won't be affected much, because the majority do not know about this law, or will not until it is too late.

I know most 'poor' immigrants will not want to come to the countries of their choice (Western nations) once they realize just how hard/impossible it is to pursue the 'American Dream' because they've been lied to about our streets being paved with gold and there being free lunches and their certifications and diplomas being usable in our countries.

As one Pakistani Doctor/ USA cab driver once said when he returned to his native Pakistan:

'I would rather be a king in Hell rather than a slave in Heaven'



[edit on 13-7-2009 by star in a jar]

[edit on 13-7-2009 by star in a jar]



posted on Jul, 13 2009 @ 07:11 PM
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reply to post by star in a jar
 


Yea you're right. Most Americans don't know about this law, so I don't see them advertising it abroad when people ask about going to the U.S.




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