More Americans are deciding that they'd rather give up their citizenship than pay more taxes.
The Wall Street Journal reports that 2013 has already set a new record for "expatriations," defined as citizens renouncing their citizenship or permanent residents giving back their green cards. The Journal quotes tax lawyer Andrew Mitchel, who found that there have been 2,369 expatriations as of the end of the third quarter; that's an increase of 33 percent over all of 2011, the previous record-holder.
%VIRTUAL-article-sponsoredlinks%Expatriations are typically motivated by a desire to escape taxes, and the move is usually undertaken by Americans already living abroad. There was an uptick in expatriation at the beginning of President Obama's first term, which has been attributed both to anticipation of more burdensome taxation policies and to increased tax enforcement against expatriates. Indeed, the Journal notes that those who renounced last year may have done so to avoid a higher capital gains tax, and also points to the Foreign Account Tax Compliance Act, which makes it tougher for Americans to hide assets in offshore accounts.
So would you renounce your citizenship just to get out of paying taxes? We put that question to our readers on Facebook, and it proved to be a divisive issue.
"To take advantage of the US's public services, structure and opportunities and then shirk on taxes to me is not right," said one reader, Matt Gardner. But another, Jim Marrion, put family over country: "to protect everything that I have worked for to prepare for me and my family's future -- YES," he wrote.
What do you think? Let us know in the comments.
Best Retirement Tax Havens
More Americans Than Ever Are Renouncing Their Citizenship
Accepted wisdom: Tax-averse retirees should move to Florida or Nevada, which have no state income or estate taxes. But what if you don't worship the sun or relish a long-distance move? In recent years other states, too, have been lavishing tax goodies on retirees, including affluent ones. With a little research you might discover your own retirement tax haven is close to home.
*Exempts all Social Security income *Taxpayers 59.5 and up get an exemption from state income tax for up to $81,840 per couple in pension income, including IRA account withdrawals *Taxpayers 65 and up can use $18,255 of the $81,840 exemption to shelter income from non-retirement investment accounts *Each taxpayer 65 or older gets an additional $2,100 personal exemption *No state estate tax
*Exempts all Social Security income *Couples, 62 and older, can exclude up to $60,000 a year of interest, dividends, capital gains, rents, pensions, IRA withdrawals and annuities from taxable income. In 2008, the exclusion rises to $70,000 per couple *Each taxpayer 65 or older gets an additional standard deduction of $1,300 *No state estate tax
*Exempts all Social Security income *Exempts all private and public pension payouts, including IRA account withdrawals, from state income tax, regardless of taxpayer's age *Each individual taxpayer can deduct $12,000 per child a year in contributions to any state's 529 college savings plan.
*Exempts all Social Security income *Exempts all private and public pension payouts, including IRA account withdrawals, from state income tax, regardless of taxpayer's age *Each taxpayer 65 or older gets an additional $1,500 personal exemption *No state estate tax
*Exempts all Social Security income *Exempts all private and public pension payouts, including IRA account withdrawals, from state income tax, regardless of taxpayer's age *Each taxpayer 65 or older gets an additional $1,000 personal exemption
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