• thelastknowngod@lemm.ee
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    1 year ago

    The exit tax is pretty insane too.

    Basically if you earn a certain amount or have a high enough net worth, you must pay a tax on all of your assets as if you were selling everything you owned. You are charged this amount even if you are not selling anything.

    This is the only wealth tax in America as far as I understand it.

    • givesomefucks@lemmy.world
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      1 year ago

      It's there for a reason tho…

      If it wasn't, the wealthy would take their wealth and fuck off to somewhere it was worth more.

      They're fine to do that, but the US is still going to want it's cut, you're still paying federal taxes every year because you're a US Citizen.

      Rich people hate paying taxes. So they just renounced citizenship on the way out and took all their wealth with them.

      But like you said, it's based on how much wealth you own so for normal people, it's not a big deal.

      It's weird seeing people against it.

      Edit:

      Also, you have to be pretty wealthy to even have to pay it. The vast majority of Americans would pay $0 to renounce.

      https://www.irs.gov/individuals/international-taxpayers/expatriation-tax

      Next day edit:

      Edit:

      I’ve lost count of how many rich overseas workers have made 5+ replies to my comments in less than 10 minutes screaching about how they shouldn’t pay taxes

      And every single one claims to be right on the line for having to pay it… yet want it thrown out for billionaires as well…

      Apparently I can’t turn off replies to comment like on reddit, so I’m just blocking every “temporary poor billionaire” who wants to spend energy online arguing billionaires should pay taxes because it would mean they do too

      No one has time for the Scrouge McDuck defenders.

        • givesomefucks@lemmy.world
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          1 year ago

          Well, yeah, but again it's only for the wealthy

          If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings from income up to an amount that is adjusted annually for inflation ($107,600 for 2020, $108,700 for 2021, $112,000 for 2022, and $120,000 for 2023). In addition, you can exclude or deduct certain foreign housing amounts.

          https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

          Those parts are never mentioned when people complain about this stuff. Because the only ones paying it are the wealthy ones, and they always bitch about taxes.

          They pay, because at any moment they can come back as a citizen. If the wealthy do t want to pay for that option, then they can renounce citizenship and pay a one time tax to remove their wealth.

            • droans@lemmy.world
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              1 year ago

              It would put you in the top 15% of households. And that's individual income.

              • nickwitha_k (he/him)@lemmy.sdf.org
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                1 year ago

                It really depends on where one lives. In and around high COL areas, that's about the level of not needing roommates to rent an apartment and potentially being able to have rent in the 30% range. You know, like boomer-era recommendations for middle-class finances.

              • SaltySalamander@kbin.social
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                1 year ago

                You are very, very financially well off at $120k/yr

                If you live in Podunk Kentucky, sure. Try feeling "very, very financially well off" in Palo Alto or NYC on $120k.

              • ciferecaNinjo@fedia.io
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                1 year ago

                It depends on where you are. If you live in Moscow or Geneva, that cut-off is still $120k USD worth of your local currency. That threshhold neglects the COL of where you are and also neglects the forex rate.

          • BraveSirZaphod@kbin.social
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            1 year ago

            I'm aware there's no real way to say anything here without sounding like a pretentious snob, but those income limits aren't exactly spectacularly high.

            I work in tech in NYC and my income is around those limits. My boyfriend is from Switzerland and there's a non-trivial chance that we'll wind up there long-term. If I was from literally any other country in the world beyond Eritrea, I would file Swiss taxes and that would be that. Instead, I'll have a direct financial incentive to give up my native citizenship because I'm from one of two countries that makes a claim to any income earned anywhere in the world, even if I don't step foot in the country that year. This is particularly rough in Switzerland because average salaries there are quite high, and thus so are costs of living, and so surpassing those limits isn't a particularly uncommon thing. (Edit: About one in four Swiss residents make more than $120,000 annually).

            I know this won't garner any sympathy at all, but a bad policy only affecting the relatively wealthy doesn't change the fact that it's a bad policy. It could even backfire from a financial perspective, since having renounced American citizenship, I'd be less inclined to spend time in the US and contribute to taxes while visiting, and I'd never move back long-term, cutting off a chance of the government getting full income taxes from me ever again, whereas a change of circumstances might have otherwise prompted me to eventually return to the US.

            • givesomefucks@lemmy.world
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              1 year ago

              Not sure if you noticed, but the American social net is fucked. Mostly because of people who make a lot and not contribute back.

              If you don't want to pay taxes, you don't have to participate in the American system.

              If you want all the benefits and none of the costs of being American…

              Someone in this thread mentioning offering violin recitials for free

              • rambaroo@lemmy.world
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                1 year ago

                The people this law targets aren't the ones committing tax avoidance. And the US social safety net isn't fucked because of a lack money, it's fucked because it doesn't even exist in the law.

                The exit tax doesn't do shit to address that. It doesn't pay for anyone's healthcare or magically make the poverty cliff go away. It's a tax on upper income workers. Meanwhile actual rich people get their money through capital gains or loans and don't pay this shit at all.

                Oh but I forgot that since I own a small house in a middle class rural neighborhood and drive a Subaru that I'm "rich" so my opinion doesn't mean shit apparently.

                • money_loo@1337lemmy.com
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                  1 year ago

                  Arguing that allowing the super wealthy to just take all their stuff and leave wouldn’t hurt the system we have now even more than it already does is one of the most asinine things I think I’ve read on the Internet. Congratulations.

              • BraveSirZaphod@kbin.social
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                1 year ago

                Please do explain then how literally every single other country in the world with a strong safety net and welfare system has managed to fund it without having to tax expats.

                If you want all the benefits and none of the costs of being American…

                Because again, in literally every single country except one African dictatorship, they interpret "the benefits" as things that you enjoy while actually being in the country, and therefore something you pay for while residing there. The ability to be a citizen of your native country is an assumed right everywhere else.

                The only benefit I'd be enjoying is the right to return to my home country if I ever needed to. You don't have to pay for that in practically any other country. And so, yes, I would have to seriously think about renouncing my citizenship since I'd be paying for essentially nothing. I think that's rather unfortunate.

                • money_loo@1337lemmy.com
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                  1 year ago

                  They tax their people more to pay for it.

                  It’s not rocket surgery.

                  The answer definitely wouldn’t be to tax the wealthy less…

                • givesomefucks@lemmy.world
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                  1 year ago

                  Cool, renounce your citizenship then.

                  I'm not going to keep repeating the same things and giving you the same IRS website and hoping you magically start understanding.

                  • SaltySalamander@kbin.social
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                    1 year ago

                    Please do explain then how literally every single other country in the world with a strong safety net and welfare system has managed to fund it without having to tax expats.

                    We're all waiting…

                  • BraveSirZaphod@kbin.social
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                    1 year ago

                    Clearly you don't have any interest in talking, and that's fine, but I do feel obligated to point out that you curiously did not answer this question:

                    Please do explain then how literally every single other country in the world with a strong safety net and welfare system has managed to fund it without having to tax expats.

          • rambaroo@lemmy.world
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            1 year ago

            $120k is "wealthy" now? 120k isn't even enough to buy a fucking house in most cities in the US. Actual wealthy people aren't affected by this law because they don't have regular income.

            • rexxit@lemmy.world
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              1 year ago

              I've seen this on Reddit before: Six figures means you're rich, because that was true in the 80s, right? Obviously people don't have a clue that 40 years of inflation has made that middle class.

              Also: income is not wealth, and the willful lack of understanding on that point blows my mind. A person who is wealthy can live an upper middle class lifestyle or better without ever having to work again. A person who has respectable income may have minimal wealth, or even mountains of debt (student loans, mortgage, etc). A person who makes 100k could be a few months unemployment away from losing their house or lease, while a person with "wealth" may not have to work at all.

              People don't become filthy rich working full time for six figures. The wealthy (~$20-50m net worth and up IMO) are people who made their money with something other than labor - through investments and things that the government doesn't really classify as normal income.

              Edit: It's like the saying goes: nobody makes a billion dollars. They take a billion dollars. If you tax the wealthy on income, you collect very little tax, because it's not classified as income. Meanwhile you're going to tax an engineer or physician who probably have hefty student loans and work their asses off full time, at the highest marginal rates because we don't or can't tax wealth.

              Edit2: we've got minimum wage internet trolls who think an employee software engineer is basically a cigar chomping capitalist because they make over the median wage. The middle class has shrunk and maybe you're not in it. Get a clue, dumbasses.

              • SaltySalamander@kbin.social
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                1 year ago

                Six figures means you’re rich, because that was true in the 80s, right?

                No, this was not any more true in the 80s than it is now.

                • rexxit@lemmy.world
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                  1 year ago

                  I certainly agree based on my previous statement that income is not wealth, but I was trying to make two points and mixed the messages.

                  One is that amounts of money that were once considered an unbelievable amount for income or wealth - say $100k and $1m - have now been eroded by inflation to fairly modest money. In the 70s or 80s, having a million meant never working again. Earning 100k a year when a house cost $50k was huge money, and might lead to wealth quickly, if one bought several houses with it.

                  Another point I'd like to sneak in is that there's almost no modern equivalent to that kind of employed income. On paper, inflation puts it at 400k - so maybe today's equivalent of a surgeon - but the 50k house now costs $500k-1m. Notional inflation being 4x, while the critically important things have gone up 10-20x means that something harder to quantify is broken, and upward mobility isn't working the way we expect. The same opportunities don't exist. We are less likely to turn income into wealth over time than at points in the past, and so the tendency of people to erroneously think high income = wealth may have a reasonable basis in history that has never been less true today.

                  Edit: and it's not just houses, it's the stock market. The advent of the internet and e-commerce resulting in tech stock growth 1995-today is a phenomenon not likely to be replicated in any other area. We may be running out of growth to be had. The ability to get 10-20x your money over 30-40 years of investments is probably gone, and with it the prospect of comfortable retirement for even relatively high earners.

            • Grumpy@sh.itjust.works
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              1 year ago

              120K lands you at 86th percentile [1]. So… relatively, you are sorta well off.

              Sure, you can't buy a house with that income in a big city. But that merely shows how fucked up the real estate bubble is. Just think, the top 86th percentile earning person is no where near enough to even buy a home. Houses are about 1m in my neighborhood. So you need to earn about 250k/yr to realistically afford a home. That lands you at 97th percentile. So just top 3% of the people can actually afford a home on a single person's salary. That's how fucked we are.

              The median income for a non-family household (i.e. single) is 45k, and family household is 95k (possibly dual income) according to 2023 census [2]. So, you're doing relatively quite well in comparison.

              Who is "wealthy" is a subjective term. So a median person might see someone making 120k as wealthy. But the person earning 120k might see themselves as poor since they can't even own a home. Historically, the single income middle class could afford homes.

          • namingthingsiseasy@programming.dev
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            1 year ago

            They pay, because at any moment they can come back as a citizen.

            But that's true of pretty much every other country in the world as well. So it still doesn't explain why the US is the only one that charges tax on foreign-earned income.

            • givesomefucks@lemmy.world
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              1 year ago

              So it still doesn’t explain why the US is the only one that charges tax on foreign-earned income.

              On the wealthy…

              You keep omitting that point, and it's starting to get old.

              But the reason is idealistic.

              America was supposed to be the land of immigrants where anyone can immigrate, work hard, and earn wealth.

              That system doesn't work if once you amass your wealth, you fuck off somewhere else and take it all with you. The reasoning is you were able to amass that wealth through America's social ladder.

              If the wealthy (the only ones that pay foreign income tax or exit taxes) don't want to pay that, they know that being honest will never result in change.

              If how I'm saying it doesn't make sense, use the IRS website I've provided numerous times.

              • rambaroo@lemmy.world
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                1 year ago

                You keep calling these people "wealthy" but the income levels you shared don't even come close to matching that. Also lol at the idea of America being an idealistic place so that's why people should pay this tax. My fucking ass. America is and always has been rigged for rich people, which should immediately tell you why this law still exists.

                How about we actually tax real wealthy people, like millionaires loaning money to themselves, instead of forcing the middle class to pick up the slack yet again?

              • ciferecaNinjo@fedia.io
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                1 year ago

                If how I’m saying it doesn’t make sense, use the IRS website I’ve provided numerous times.

                You cannot expect people to use the irs.gov website. That’s not open to the public. It’s exclusive. Try going there over tor - you will get a 403. Indeed it’s shitty that access to legal information is restricted. It should be open to all.

            • 👁️👄👁️@lemm.ee
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              1 year ago

              Because you're American and should pay taxes no matter if you're in Antarctica or not. If you're in a different country and not participating in America's system, then why are you claiming to still be an American citizen? The answer is to renounce at that point. The right winger "taxes against rich are bad" are starting to come out in this thread lol.

              • BraveSirZaphod@kbin.social
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                1 year ago

                Because you’re American and should pay taxes no matter if you’re in Antarctica or not.

                Why is America the only country that has this perspective (Eritrea excepted)? Is literally every single other country besides an African dictatorship simply delusional, and only America and Eritrea found the divine wisdom that all global income should be taxed?

                • money_loo@1337lemmy.com
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                  1 year ago

                  The United States is one of the few countries that has a system of taxing its citizens and residents on their worldwide income, including income earned abroad. This practice is known as "citizenship-based taxation." There are a few reasons why the U.S. follows this approach:

                  1. Historical Reasons: The United States has had a system of citizenship-based taxation in place for a long time. It dates back to the Civil War era when it was implemented to fund the war effort.

                  2. Desire to Prevent Tax Evasion: Citizenship-based taxation is intended to prevent U.S. citizens and residents from avoiding taxes by moving their assets or income abroad. Without it, individuals might seek tax havens to reduce their tax liability.

                  1. Complex Tax Code: The U.S. tax code is complex, and changing to a different system, such as residence-based taxation (taxing only income earned within the country), would require a significant overhaul of tax laws.

                  2. Revenue Generation: Taxing foreign income allows the U.S. government to generate revenue from its citizens and residents, regardless of where they earn their income.

                  It's worth noting that while the U.S. taxes its citizens and residents on foreign income, there are mechanisms in place, such as the Foreign Earned Income Exclusion and foreign tax credits, to mitigate double taxation and reduce the tax burden on income earned in other countries. However, compliance with U.S. tax laws related to foreign income can be complex and may require professional assistance for those living abroad.

                • 👁️👄👁️@lemm.ee
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                  1 year ago

                  That's not a reason on why we shouldn't have a wealth tax… You're just blindly insulting America without reason, which this site is already a xenophobic circlejerk.

                  • BraveSirZaphod@kbin.social
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                    1 year ago

                    Why are you talking about wealth taxes when they have nothing to do with the question I asked?

                    Again, why is America the only major country that has this policy? Either answer this, or don't respond.

              • AnneBoleynTudor@startrek.website
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                1 year ago

                If you think it's that easy to renounce American citizenship, you have no idea what you're talking about.

                I fully support taxing the rich. I am very explicitly NOT rich. And I cannot come close to being able to afford to renounce my American citizenship.

          • ciferecaNinjo@fedia.io
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            1 year ago

            You seem unaware of the population of accidental Americans. When a Dutch couple gives birth on US soil before returning to Europe, that child automatically a birthright citizen of the US. They can grow up having never set foot in the US (apart from birth), and for the rest of their life they have a legal obligation to file US tax and declare to the US all their Dutch income & bank accounts even if they are below that $120,000 line. They also get targeted for discrimination along with all other Americans by banks who don’t accept Americans (even if they are also Dutch). They have to pay a US accountant upwards of $300/year for the rest of their life just to file that zero.

            It’s also worth noting that an income of $120k goes much further in the US than it does in Europe (where they might be living).

            So obviously a lot of accidental Americans have become motivated to renounce. But if they already own a home, you can see the problem. I would not say owning a home makes someone “rich”. They still need to work to eat and to maintain the home.

            • givesomefucks@lemmy.world
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              1 year ago

              This is the absolute least important problem with American taxes, there's a thousand other things we're trying to fix.

              Stop pretending like the bottom of "the top 10% wealthiest Americans" need help. We've got fucking children starving and not even getting a free school lunch. Excuse us for not having sympathy for everyone making between 120k and 120 million a year.

              I'm just blocking all of you at this point, so do t expect another reply

      • Etterra@lemmy.world
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        1 year ago

        It's like the Inheritance tax. It's basically meaningless to the poor, but it sounds bad so the GOP uses it to scare their base. However the targets of the tax are primarily the handful of rich capitalist bastards who have a harder time bribing lobbying their way out of it.

        • rambaroo@lemmy.world
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          1 year ago

          The exit tax starts at $120k. That's "I can rent but not buy an apartment in San Francisco" class, not the "rich capitalist bastard lobbying Congress" class. And of course it's also an income tax so it does jack shit to tax actual wealthy people.

          Actual rich people already worked around the tax issue by putting their assets in stocks and loans. They aren't paying this tax at all in the first place. They don't need to lobby anyone.

          It's fucking ridiculous how some of you try to frame this income level. Doctors and lawyers are not the wealthy capitalists phoning up Congress and getting what they want from them. It's actually fucking crazy that you're acting like they do. People raising a family at that income level will never retire just like any other worker, but now they're rich capitalist bastards?

          • rexxit@lemmy.world
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            1 year ago

            Totally agree. Income isn't wealth and people are clinging onto 1970s implications of "millionaire" when in 2023 having a million net worth doesn't even allow you to retire and might just mean you own a house and have little other savings. Similarly "six figures" income meant a lot 30-40 years ago, but inflation eroded that to middle class in the 21st century.

      • thelastknowngod@lemm.ee
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        1 year ago

        My issue isn't so much with the tax itself as it is selectively enforced. If those assets remained in the US and the person never renounced, they would never be taxed. Or at least not taxed at the same rate.

        So it's important enough to make sure rich people don't run away but, as long as you don't try to run, you don't owe us anything… So the rich in America can continue getting richer…

        Also, the income threshold is pretty average for any senior level software engineer. You don't need to be astoundingly rich to be on the hook.

        • givesomefucks@lemmy.world
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          1 year ago

          What?

          You think Americans do t pay property tax?

          They're still paying it even if they don't set foot in America

          I'm sorry, everytime you reply you say a new wrong thing I have to type alot to explain. I thought there was a few things you didn't know, but I'm not going to take the time to explain how American taxes work from ground up.

          Also, the income threshold is pretty average for any senior level software engineer. You don’t need to be astoundingly rich to be on the hook.

          Over $100,000/year is wealthy in America. The median income is 3/4 of that…

          • ciferecaNinjo@fedia.io
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            1 year ago

            You think Americans do t pay property tax?

            That tax is irrelevant. That just muddies the waters to bring up property tax because every real estate property is subject to local property tax. It’s a wash. When you buy a house, you implicitly agree to property tax wherever that house is located.

          • thelastknowngod@lemm.ee
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            1 year ago

            You think Americans do t pay property tax?

            This is not the same thing as an exit tax.

            For example, two people each own identical houses. One lives in the US and one lives outside. Both decide to keep it until they die. They both owe property taxes. If the person living outside of the US renounces their citizenship, they owe an exit tax even though they did not sell the property. The value of the house didn't change. It's location, owner, property tax obligation… Nothing changed.

            There is nothing wrong with this. It should just be applied equally. If there is going to be a wealth tax, I want it applied to wealthy Americans even if they don't renounce their citizenship.

            • givesomefucks@lemmy.world
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              1 year ago

              If those assets remained in the US and the person never renounced, they would never be taxed.

              You flat out said it…

              Fuck it, I'm just blocking, I don't want roped into another one of these

    • lolcatnip@reddthat.com
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      1 year ago

      I think it makes a lot of sense for people with millions of dollars (or more) of assets, but not for normal people.