He Gave Up His U.S. Citizenship

[james&olya 1,121]

I thought we just had one Congress, we have 110 of them? Damn!

Yeah, for some reason they keep dying even when they don't ever get voted out. I doubt there are many left from that first congress!

[mawilson 2,133]

Yeah, for some reason they keep dying even when they don't ever get voted out. I doubt there are many left from that first congress!

Bastards!

[Mr. Big Dog 10,747]

It's an appropriate opportunity to add some context here (s) and reiterate my original comment.

1. The bill was over whelming passed/supported without any Nays, maybe because no one wanted a scarlet letter for not supporting tax relief and financial help to veterans and those serving in the armed services. With a name like "Heroes Earnings Assistance and Relief Tax Act of 2008" (HEART ACT) but as usual with bills, there was bit of dog poop mixed with the good intent, a provision providing for the very first real 'Exit' tax was included. Good ole Charlie Rangel killed two birds with one stone, he finally really screwed the expats he hates so much and proposed to pay for the HEART ACT with said funds. You come off as if the first real 'exit tax' was a stand alone bill, it was not -- what politician would vote against tax and financial relief for members of the military?

Upon reading the bill, it's obvious why conservatives supported (HEART ACT) the bill as much as why Democrats and progressives did so -- no mystery here.

2. Just to clarify, the HEART ACT did not expand any exit tax, there was no actual exit tax prior to 2008, just taxation after expatriation. The act did completely change what had been 10 years of continued taxation on those that renounced their citizenship to a Mark-to-market tax, an exit tax on the "deemed sale" of all assets and treated as if all assets were sold on the day before the expatriation date.

3. My original statement, "Is there a tax the progressives have not thought of... Exit Tax?" The HEART ACT was Charlie Rangel's baby -- no conservative by any stretch of the imagination and no moderate Democrat either.

You have yet to state exactly what is "off the chart" about "Is there a tax the progressives have not thought of... Exit Tax?" Considering a progressive thought of/introduced the bill which became Pub. Law 110-245.

Okay, so you're conceding that conservatives have supported the expansion of the exit tax (which has, in fact, been around since 1966 - see: IRS Code Section 877). Said section 877 was amended and expanded on three different occasions. First in 1996 (GOP majority Congress), again in 2006 (GOP majority Congress) and last in 2008 (with the full support of the entire GOP delegation in Congress). Now, you argue that the GOP delegation supported the expansion of the exit tax into a mark-to-market scheme in 2008 only because they had no balls to stand by principle. That's a weak argument in light of the previous expansions of the exit tax that would never have had a chance to make it to a vote unless the majority party (the GOP) allowed it to be brought up for a vote.

[Leatherneck 693]

Okay, so you're conceding that conservatives have supported the expansion of the exit tax (which has, in fact, been around since 1966 - see: IRS Code Section 877). Said section 877 was amended and expanded on three different occasions. First in 1996 (GOP majority Congress), again in 2006 (GOP majority Congress) and last in 2008 (with the full support of the entire GOP delegation in Congress). Now, you argue that the GOP delegation supported the expansion of the exit tax into a mark-to-market scheme in 2008 only because they had no balls to stand by principle. That's a weak argument in light of the previous expansions of the exit tax that would never have had a chance to make it to a vote unless the majority party (the GOP) allowed it to be brought up for a vote.

I'm sure we can have this debate based on facts, no twisting and deflecting, the issue was/and, "Is there a tax the progressives have not thought of... Exit Tax?" I made no argument as to how the GOP voted on tax laws involving the few folks that expatriate yearly, other than stating the GOP supported the Jobs Act of 2004 and the HEART ACT of 2008. Therefore, how the GOP did or did not vote on taxes was never my position.

What principle are you talking about? The HEART ACT gave tax and financial relief to members of the military and their families, to be paid for by accessing an exit tax on the "deemed sale" of all assets and treated as if all assets were sold on the day before the expatriation date. There was no new tax, the 10 year tax regime went away -- replaced by a real exit tax & gift tax.

1. The 1966 law -- applied a 10-year post renunciation tax on U.S.-source income of individuals whose main motive for expatriation was tax avoidance.

2. The 1996 law -- created the assumption that tax avoidance was the principal motivation for expatriation for any individual whose net worth was at least $500,000 or whose average income tax in the 5 years prior to expatriation was over $100,000, including the 10 year post-renunciation tax.

3. The American Jobs Creation Act of 2004 -- stipulated that all individuals who met the economic thresholds by definition expatriated solely to avoid taxes, and no argument to the contrary was acceptable. Expatriated individuals shall be subject to an alternative tax for a ten-year period following expatriation.

The 10 year expatriation tax regime existed on questionable constitutional grounds -- taxation without the privileges of citizenship. Therefore, this flaw was corrected with the mark-to-market regime. Now, how can you insist a 10 year tax regime in the three previous laws to the 2008 law was an exit tax? Reading each laws ( '66, '96 and '04) 10 year tax regime clearly demonstrates the "deemed sale" language of 2008 was unique and had not existed prior to 2008 -- no 'exit tax' prior to 2008, only 'post taxation.'

[Mr. Big Dog 10,747]

Now, how can you insist a 10 year tax regime in the three previous laws to the 2008 law was an exit tax?

Because the 1996, 2006 and 2008 legislation were mere changes to the IRS code which was first established in 1966. There wasn't a new tax invented in 2008. The already existing tax was amended.

[CarlosAndSveta 808]

The 10 year expatriation tax regime existed on questionable constitutional grounds -- taxation without the privileges of citizenship. Therefore, this flaw was corrected with the mark-to-market regime. Now, how can you insist a 10 year tax regime in the three previous laws to the 2008 law was an exit tax? Reading each laws ( '66, '96 and '04) 10 year tax regime clearly demonstrates the "deemed sale" language of 2008 was unique and had not existed prior to 2008 -- no 'exit tax' prior to 2008, only 'post taxation.'

You don't need to be a citizen to owe federal income tax. If the income is earned in the U.S. then it will more than likely be taxed.

[Mr. Big Dog 10,747]

You don't need to be a citizen to owe federal income tax. If the income is earned in the U.S. then it will more than likely be taxed.

Very true. I paid taxes long before I became a citizen. As did my wife.

[Leatherneck 693]

Because the 1996, 2006 and 2008 legislation were mere changes to the IRS code which was first established in 1966. There wasn't a new tax invented in 2008. The already existing tax was amended.

Yes! Finally we're getting somewhere -- that is precisely what I laid out in that last reply. Again, The 1966 law applied a 10-year tax on U.S.-source income of individuals whose main motive for expatriation was tax avoidance, just as the 1996 and 2004 laws. So the 1966, 1996, and 2004 laws all had the same 10 year post renunciation tax regime... in other words, the expat paid the tax over a ten year period.

The 2008 law was not a "mere" change to the code... it was a fundamental change to the code and remarkably different from the1966, 1996 and 2004 laws. It was the very first time the "deemed sale" language had been used -- this language never appeared in the 3 previous laws, which made the expat liable for the tax, now! Although nothing was actually sold, it's all taxed for IRS purposes exactly as if assets actually had been sold and the expat has to pay tax on the theoretical profit. The expat can defer the tax payment -- but collateral must be posted and interested paid.

You're no dumb guy -- I know very well you can see the difference and you realize 2008 was the first 'exit tax.'

[Mr. Big Dog 10,747]

[/u][/i]

Yes! Finally we're getting somewhere -- that is precisely what I laid out in that last reply. Again, The 1966 law applied a 10-year tax on U.S.-source income of individuals whose main motive for expatriation was tax avoidance, just as the 1996 and 2004 laws. So the 1966, 1996, and 2004 laws all had the same 10 year post renunciation tax regime... in other words, the expat paid the tax over a ten year period.

The 2008 law was not a "mere" change to the code... it was a fundamental change to the code and remarkably different from the1966, 1996 and 2004 laws.

It's still the same section in the IRS tax code. Sure, the 2008 amendments mean a fundamental change but they're still amendments to the very same code known as the exit tax. I do see what you're getting at but the fact remains that every last member of Congress - including all the conservative members of Congress - supported this fundamental change. At the end of the day, they needed to find a way to pay for tax breaks for veterans and felt that those ditching their US citizenship for a few bucks may as well pony up. I don't see why that should be controversial in way. You're taxing people that prospered from being Americans and then decide to take a dump on the country. In turn, you reward those that put it all on the line for this great nation. If that's progressive, then I am even more proud to be one.

[Boiler 45,516]

They can tax all they like.

But how do they collect, when you have gone?

And how do they know how much it would raise to pay anything, must be a total guess.

[Mr. Big Dog 10,747]

And how do they know how much it would raise to pay anything, must be a total guess.

Sure. Most legislation is based on guesses.

[Leatherneck 693]

They can tax all they like.

But how do they collect, when you have gone?

And how do they know how much it would raise to pay anything, must be a total guess.

There's a procedure to renunciation, you know, forms and oath taking and all.

[Leatherneck 693]

It's still the same section in the IRS tax code. Sure, the 2008 amendments mean a fundamental change but they're still amendments to the very same code known as the exit tax. I do see what you're getting at but the fact remains that every last member of Congress - including all the conservative members of Congress - supported this fundamental change. At the end of the day, they needed to find a way to pay for tax breaks for veterans and felt that those ditching their US citizenship for a few bucks may as well pony up. I don't see why that should be controversial in way. You're taxing people that prospered from being Americans and then decide to take a dump on the country. In turn, you reward those that put it all on the line for this great nation. If that's progressive, then I am even more proud to be one.

Yeah the section of the code did not change -- only the way the tax is assessed and collected. Yeah the 2008 law was passed unopposed, what's interesting is to lay those to laws ('08 &'04) side by side and compare, the 2004 law was yeas-280 (mostly Repubs) & nays-141(mostly Dems), the Dems did not like the bill being loaded with tax breaks for business. You can look at the glass as half full also -- wealthy expats paid taxes as citizens and likely created wealth and jobs for others, so it's not as if they stole the money and decided to run. No body gets wealthy in a vacuum -- wealth and prosperity are created for others/employees and lots of taxes for govt along the way. My take is we should all be rewarded by being allowed to keep a bigger share of our labor -- there is no one big pie that needs to be divided, there are lots of wealth pies being created.

Look at the number of new millionaires as a result of facebook, hell, even the kid that painted the murals on the walls was smart enough to take his compensation in stock rather than cash years ago. There's a reason why the internet has become a source of wealth for millions of folks -- govt and bureaucrats have left the it alone and not meddled with crazy azz regulations.

[Leatherneck 693]

You don't need to be a citizen to owe federal income tax. If the income is earned in the U.S. then it will more than likely be taxed.

True, but with regards to folks that renounce U.S. citizenship, the law created a separate class of citizen who had no benefits of citizenship – the right to live and work in the U.S., right to vote, the right to protection of the U.S., etc – but who still had the tax obligation of citizenship. The laws as written were Constitutionally questionable, whereas non-resident, non-citizens are not taxed on income not earned here.

[Boiler 45,516]

There's a procedure to renunciation, you know, forms and oath taking and all.

And?