France Tried Soaking the Rich. It Didn’t Go Well(bloomberg.com)
bloomberg.com
France Tried Soaking the Rich. It Didn’t Go Well
https://www.bloomberg.com/opinion/articles/2019-11-14/france-s-wealth-tax-should-be-a-warning-for-warren-and-sanders
25 comments
I don't have much to say about this issue either way, but it's not as ironclad as you make it seem.
It's less trivial but people can and do renounce their US citizenship. It can be expensive, but probably not 2%-6% of you net worth in perpetuity expensive. Now, you will have to find a new flag of convenience, but you can do that from probably somewhere b/t 500K and 1.5 million in a desirable locale.
It's less trivial but people can and do renounce their US citizenship. It can be expensive, but probably not 2%-6% of you net worth in perpetuity expensive. Now, you will have to find a new flag of convenience, but you can do that from probably somewhere b/t 500K and 1.5 million in a desirable locale.
renouncing citizenship comes with an exit tax of 23.8% of your assets. https://1040abroad.com/faq/renouncing-u-s-citizenship/
The last time I checked, which was admittedly a long time ago, if you have a net worth of over $100k when you renounce your US citizenship, it is assumed you are doing so for tax evasion purposes and you will be continued to be taxed for the next ten years.
Well, some citizens can, but the rich can't. The Foreign Earned Income Exclusion exempts the first $105,900* of income.
*https://www.irs.gov/pub/irs-pdf/f2555.pdf
*https://www.irs.gov/pub/irs-pdf/f2555.pdf
IIRC, the fine for not filing a FATCA report is $100k. I’d guess anyone above a certain threshold risks having to pay the fine rather than declaring their accounts.
As a Belgian, it's very surprising to read that Germans would consider moving here to avoid taxes. We're pretty much taxed to death. Though most of our taxes are income taxes (up to 50% + ~13% national insurance contributions) and VAT (21%). There isn't much in terms of wealth taxes.
Unless you renounce your US citizenship.
In which case you need a Visa to travel to the US, and you lose the network of powerful embassies all over the world and so on. That's not the greatest deal.
When, if ever, does a normal person need access to a network of powerful embassies all over the world?
When travelling, if you get into any kind of troubles: from casual ones like «my wallet was stolen I don't have any papers now», to «corrupt cops are trying to racket me» or «I had a car accident and the locals want me to pay for everything because I'm rich».
All the examples above are things that happened to people of my family / close friend in the past few years, and the (French) embassy/consulate helped a lot each times.
All the examples above are things that happened to people of my family / close friend in the past few years, and the (French) embassy/consulate helped a lot each times.
Isn't there a several year lead time before your tax reporting requirements are no longer the case?
I believe your are still liable for the year you renounce. I am not an expert of any type in this area, to be clear.
I'm ambivalent about wealth taxes but this article buries its lead; US residents can't move out of the country and still be within a reasonable commute of their job and family, and US citizens are taxed even as expats abroad. France and the US don't really seem comparable.
A news site owned by a billionaire says that taxing the rich don't work. It's really surprising.
A news site owned by a billionaire who just entered the race for the US Presidency in 2020 because he doesn't think that the pro-billionaire candidates are doing well enough in polls says that taxing the rich doesn't work. Incredibly surprising.
So bring back capital controls. 10,000 wealthy can leave the country - just without all their wealth. Plenty of Western countries had limits until the seventies and eighties.
Already the case. People with assets beyond $2M will be taxed a capital gain tax (23.8%) from all of their assets as if they were sold at fair market value.
How this would work in reality? It is easier to change and obscure the money trail of liquid assets than issuing warrants.
In the 90s it was not too hard to get a diplomat passport of a developing country, even if you have never set foot on it.
Worst case scenario is when you going to operate from a jacht under a Monaco flag at St Tropez harbour. Life is cruel.
In the 90s it was not too hard to get a diplomat passport of a developing country, even if you have never set foot on it.
Worst case scenario is when you going to operate from a jacht under a Monaco flag at St Tropez harbour. Life is cruel.
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Billionaire-owned magazine says that wealth taxes won't work here because they didn't work in France.
I'm waiting for them to explain how that's consistent with their position on universal health care, which seems to work everywhere but here.
I'm waiting for them to explain how that's consistent with their position on universal health care, which seems to work everywhere but here.
The 75% supertax was in would-be president Hollande programme, but has _never_ been applied!
The difference between the US and France is that you can't leave the US and stop paying taxes. You still have to pay taxes. So even if all the billionaires leave, we'll still have their taxes. The only way they can legally stop paying them is to renounce their citizenship which is illegal to do for tax purposes and at that point that should be charged hundreds tens or hundreds of millions to be allowed out.
The failure of this bullshit Bloomberg article to say anything about this makes it clearly propaganda garbage clearly written in bad faith by billionaires who don't want to be taxed. This shit "reporting" doesn't belong here or anywhere.
The failure of this bullshit Bloomberg article to say anything about this makes it clearly propaganda garbage clearly written in bad faith by billionaires who don't want to be taxed. This shit "reporting" doesn't belong here or anywhere.
Unlike many countries, US citizens can't escape US income tax by moving out of the country, income tax must be paid regardless of the geographic source of income.