Richard Murphy\’s latest idea:
I argue for a citizenship based tax – which only the US has.
So if you decide that you don\’t like the way the country is going and decide to leave (not, perhas enjoying the tyrrany of the majority) you still have to pay tax to fund the way that you don\’t like the country going. Truly, you are a slave to the State.
It gets even more interesting though. The US system also taxes you if you decide that you\’d like to give up citizenship.
Section 205 creates a new “exit tax” on all persons who give up, renounce, and/or relinquish their US citizenship or greencard. For greencard holders, expatriation can and does happen involuntarily. It also applies to US citizenship (though no one can force you to give up US citizenship). You are deemed to have sold all your worldly goods on the date of expatriation. The first $600,000 is exempt, and the rest is taxed and due within 90 days of expatriation. There is no step-up in basis for arrival to the US, so for greencard holders this tax is also on gain incurred prior to moving to the US. US retirement plans are deemed distributed and taxed immediately. Taxpayers’ interests in foreign trusts are taxable, even if there is no legal access to the funds.
No, I think we\’ll not have that tax system, shall we?