Re: USA Africa Dialogue Series - Re: Thanks.

This is not a simple issue of prohibitive or burdensome taxes. The problem is that some of these individuals utilized a system (education, law and order, infrastructure, etc.) that was financed by others (that is, those who came before them but who dutifully paid their taxes) to develop the skills that made them rich and even utilized the same economy that they are now condemning to get rich. Now that they are rich, instead of contributing to the enhancement of the system so that today's young people can also have the opportunity to grow rich, they have now escaped abroad to avoid paying their fair share of taxes. I have read many articles about Internet billionaires who made all their money in the United States and now have relocated to East Asia or South America or Europe and now complain that the tax system is too complicated and that taxes are too high--the same tax rate that paid for all the amenities that enhanced their ability to produce so much wealth. Meanwhile, who will pay to keep the system functioning properly? Whose taxes will provide health care for all the workers that helped these millionaires accumulate their wealth but are now left behind in the USA? 

On Fri, Oct 30, 2015 at 7:44 AM, Assensoh, Akwasi B. <aassenso@indiana.edu> wrote:

A record 1,426 Americans return their passports after Giving Up USA Citizenship

Main reason: overseas taxes that require expensive tax preparers

by Sophia Yan, "Times", Hong Kong

UPDATED 2:19 AM CDT Oct 30, 2015

HONG KONG (CNNMoney) —A record 1,426 Americans gave up their citizenship in the third quarter, according to new government data.

That puts the number of Americans who have renounced their citizenship at a whopping 3,221 so far this year. In 2014, a record 3,415 Americans gave up their passports, according to government data analyzed by CNNMoney.

An increasing number of Americans are bidding Uncle Sam farewell. Many are expats tired of dealing with complicated tax paperwork -- a headache that has increased lately as hefty tax regulations have kicked in. Last year, 15 times more Americans renounced their citizenship than in 2008.

Unlike most countries, the U.S. taxes citizens on all income -- no matter where it's earned, or where they live. For Americans living abroad, that means a mountain of paperwork so complex that expats are often forced to seek professional help, paying high fees to accountants and lawyers.

The headache is only getting worse. The Foreign Account Tax Compliance Act requires individuals to report certain foreign assets, and for banks to disclose all foreign accounts held by Americans. The new law comes on top of another rule that requires Americans to disclose foreign bank holdings above $10,000.

These regulations are part of a wider U.S. government move to battle tax evasion, especially after major Swiss banks admitted to helping Americans hide assets offshore.

But the campaign is making life difficult for the 7.6 million Americans living abroad. As financial institutions rush to understand FATCA, some overseas banks, both big and small, have kicked out their U.S. clients, leaving some without even basic checking and savings accounts.

If a bank mistakenly fails to report any accounts held by Americans outside the U.S., they can face steep penalties.

Of course, some Americans renouncing their citizenship are extremely rich, and ditching their citizenship may mean they're able to pay lower taxes in the future. 

But it remains illegal to renounce your U.S. status simply to shirk a tax bill, and giving up your passport now doesn't mean Uncle Sam can't track you down later for back taxes.

[END]

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JOHN MUKUM MBAKU, ESQ.
J.D. (Law), Ph.D. (Economics)
Graduate Certificate in Environmental and Natural Resources Law
Nonresident Senior Fellow, The Brookings Institution
Attorney & Counselor at Law (Licensed in Utah)
Brady Presidential Distinguished Professor of Economics &  John S. Hinckley Fellow
Department of Economics
Weber State University
1337 Edvalson Street, Dept. 3807
Ogden, UT 84408-3807, USA
(801) 626-7442 Phone
(801) 626-7423 Fax

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