Our own Noble Dreamer in the news. Wall Street Journal reports:
Expatriate Americans Break Up With Uncle Sam to Escape Tax Rules
By LIAM PLEVEN and LAURA SAUNDERS
“Ms. Moon is among record numbers of Americans cutting ties. U.S. offices abroad reported that 1,001 U.S. citizens and green-card holders had renounced their allegiance in the first three months of the year, according to Andrew Mitchel, a lawyer in Centerbrook, Conn., who analyzes Treasury Department data. That figure puts 2014 on track to top last year’s total of 2,999 renunciations, he said, which was the most since the government began disclosing the data.”
This is what the CONS want us to believe. In fact, it is a standard feature in the Annex sections of the IGAs to exempt registered accounts. To see what other countries received:
Yes, Trish, and one of them even went so far as to say he was “thrilled” about it, in a transparent attempt to project some enthusiasm in us for the great job they did! How ridiculous to think that we wouldn’t see that we’ve been sold down the river.
I have been curious about the percentage of the US population that would be impacted by the exit tax limit of $2 million in net assets if they decided to expatriate.
According to a presentation by Saez and Zucman, professors at UC Berkley, $4 million in wealth is required to break into the upper 1% of US population. The top 10% have a minimum wealth of $500,000. (See slide 28):
A research paper by E.N. Wolff of New York University called “The Asset Price Meltdown and the Wealth of the Middle Class” includes the following data:
Mean wealth by 95-99%: 3,192,000 (2010 data)
Mean wealth by 90-95%: 1,263,000 (2010 data)
Although I could not locate a definite percentage stratum at which individuals in the US cross over the $2 million line, it appears that it would be at about 95% from the above data. This means that 5% of the US population, if they were to expatriate, would be subject to the exit tax based on their wealth.
Note: from my reading of E.N. Wolff data, the statistics exclude the value of defined benefit pension plans, which, if non-governmental, is included in the exit tax net asset value calculation. These can be of substantial value and could cause an expatriating individual to cross over the $2 million net asset limitation without feeling particularly wealthy, e.g., a defined benefit pension plan paying $2,500 per month ($30,000 per year) has an approximate value of $600,000.
I am now able to corroborate the above statement that about 5% of the US population would be hit with the exit tax if they were to expatriate. Using households instead of individuals, the author of the below blog noted: “To … rank in the top 5% of households (making you richer than 95 out of 100 families), you and your spouse need a combined … net worth of $1,864,100.” (Data is from 2010).
Using additional data from his blog (table 4), potential expatriates in the age group 55+ would be two to three times more likely to have a net worth above $2 million, meaning that 10-15% of Americans over 55 would be subject to the exit tax.
Since the $2 million is a fixed, non-inflation adjusted threshold, an increasing number of Americans who wish to expatriate will be unable to do so without becoming covered due to inflation.