Tuesday, March 24, 2009

The State Claims Ownership... Of You

A 2004 law, the ironically-named American Jobs Creation Act, in essence declares that even if you renounce your citizenship and leave the country, the U.S. Government still owns you for 10 more years. Briggs Armstrong explains:
The American Jobs Creation act of 2004, passed by the Republican-controlled government, amended section 877 of the Internal Revenue Code. Under the new law, any individual who has a net worth of $2 million or an average income-tax liability of $127,000 who renounces his or her citizenship and leaves the country is automatically assumed to have done so for tax avoidance reasons and is subject to some rather unbelievable tax laws.

Any individual who is declared to have expatriated for tax reasons is forced to pay US income taxes on all US based income for 10 years following expatriation, regardless of the country in which the individual resides. Additionally, in the 10 years following expatriation, if a qualifying individual spends 30 days in the United States during any year, he or she is taxed as a US citizen on all income derived from any place in the world. To make matters worse, if an individual happens to die in a year in which he or she spent at least 30 days in the United States, the entire estate is subject to US income tax law.
This sort of law is one of the hallmarks of a dictatorship. Jews in Nazi Germany, for example, were permitted to leave the country (until about 1938), but could not take their money with them.

One more step down the road.

2 comments:

RickH86 said...

The U.S. and Switzerland are two of the few countries who tax all of your worldwide income (and property for the Swiss), regardless of where you legally reside.

Jeff Perren said...

It's bad enough to tax ex-pats. But this goes beyond that to tax even individuals who have renounced their citizenship and moved away.

If that isn't a claim that the Feds own you, I don't know what is.