For most people, that's taxes in Europe vs taxes + health insurance premiums in the US.
Even if the combined totals are equivalent or higher in Europe, government-provided healthcare provides cost predictability that doesn't exist in the US. One year I might pay a much lower amount in the US, while the next year a single medical procedure could easily double my expenses.
Monaco is the place if you're super rich.
Point you're making applies to countries like Belgium or France.
I'm all for progressive taxes, but fuck system where Comarch CEO pays fraction of my tax percentage.
I'm not doing it tho, 15% ryczałt (lump sum?) is low enough to not care, and ipbox seems like tax trap. I'm not paying money to villains like Memcen to lower my taxes.
I think even at the biggest FAANGS in the US, you total <<net>> compensation as a senior engineer will be $250k-$300k, leaving the ratio somewhere around 4-5x (and this is for a super limited set of companies and positions; I'd imagine that the average ratio would be closer to 2-3x).
And don't forget that local living expenses are minimal. You'd get to keep maybe even 90% of your salary.
[0] https://justjoin.it/remote-poland?tab=with-salary&sort=salar...
The median Romanian net salary for software developers is RON 7000 per month. That's about €1400 or $1600 per month, so $19.2K, net. 3x.
You were saying?
> I'd imagine that the average ratio would be closer to 2-3x
To which you replied:
> 10% is a gross exaggeration but "the average ratio would be closer to 2-3x" sounds equally exaggerated in the other direction.
My original example pointed to the top of the range and then I used the median, which is the statistically most relevant indicator for comparing salaries.
> 3x != 2x, and I suspect 3x is still too low; also comparing median salaries is not enough.
At this point, you're arguing in bad faith.
https://www.vox.com/recode/2020/11/9/21547055/eric-schmidt-g...
Any country can be a tax haven if you're not already living there and rich enough to negotiate special terms.
Greece and Cyprus offers citizenship-by-investment, and there are many ways wealthy people can 'invest' in the same way they do 'philanthropy'.
Remote work? Or own a foreign company and pay yourself in dividends? These are extremely common cases.
> And on top of that, Cyprus is one of the few european countries that are not yet in the Schengen area. So you'll have to stay on the tiny 9,251 Square Kilometers.
That's not how Schengen works: Schengen is about being able to freely travel in the Schengen area without having to even show your passport / national ID card. For example I regularly cross borders, by car, between Belgium, France, Spain, Monaco and Andorra (Monaco is Schengen while Andorra, wonderful place on earth btw, is not, but Andorra has got agreements for free travel with France and Spain anyway) and I've never been asked my ID once. Heck, lately I've always been doing my PCR tests, as officially required due to the sars-cov-2 restrictions, and although it's mandatory to cross borders I've never been asked to show them.
A passport from Cyprus allows you to travel, without the need for a visa, to most countries in the world if I'm not mistaken. The thing is: because Cyprus is an island you'll very often be flying to/from there and you'll have to show your passport. But you're definitely not stuck on the island.
I think Eric Schmidt can afford that
> you know that you pay taxes on the country you live & work in
Yes, I know this. I live abroad.
Yes, every country has taxes. The tax rates are not the same. Additionally, countries like Singapore have zero capital gains tax. Executives can just take a symbolic job and pay themselves a symbolic salary, but they're not getting rich off their salaries
No you won't, you'll just have to pass a border control whenever you leave or re-enter the country. That's hardly a huge hindrance, unless you're wanted.
There are 20 million millionaires in the states. This is not even 10,000 people year over year with assets, not even net worth, over $2 million. This is a tiny fraction of the population, most of whom are contrarian or pursue an alternative lifestyle, given that they are living abroad.
I would hardly call someone with $2 million as having outsized influenced, they're barely upper middle class or be able to afford a house in San Francisco. If we assume this distribution obey a power-law, there are a small percentage of individuals here there who are ultra ultra wealthy to have that influence.
There are ideological reasons to renounce citizenship, and maybe having a small amount of wealth enables to pursue this option as it involves legal fees and also affordance of living off investment income. There are likely many poor people who would like to leave to, but don't have the financial means to. The data set will be biased towards those who can afford the process.
Furthermore, renouncement of citizenship involves exit taxes, on which people have already paid taxes.
> The best thing to do is forbid them re-entry into the country
On what legal grounds? They can't enter on a tourist visa? To visit a dying friend or family member one last time?
> nor to hold controlling interest in any company in the US.
Then we should stop all foreign investments and investors.
Given the track-record lefty authoritarianism has, I'm always a little nauseated to see people pull out the truncheon and jack-boots to enforce "economic justice". That and suggestions like this don't even make any sense, and rarely ever do. It always looks to me like retribution is the aim here, rather than effective economic policy.
The ultra-left sentiment is, indeed, anti-liberal at its core, but it is still an irrelevant fringe.
The actual, viable threat of authoritarianism is coming from the opposite side, which is a spit away from holding absolute power, here in the States, at least. And then, it's on.
> viable threat of authoritarianism is coming from the opposite side
This is nothing more than whataboutism. There's authoritarians on both sides. They're both just as dangerous in the end-game. In Canada, it's the left mainly. In the US, there's highly vocal, and influential to public opinion, left wing authoritarians. In Canada lefty authoritarianism isn't just a fringe, it's mainstream. This is true in a lot of places too. I'm not sure why some folks insist on downplaying the risk of authoritarianism when it comes from the left as opposed to the right. Both kill just as many people, one just uses gas where the other uses starvation.
Let's be honest here, lefty authoritarianism has historically killed way more people in total.
Fortunately, righty authoritarianism was stopped; unfortunately lefty authoritarianism wasn't.
I just find it fascinating and a bit sad that authoritarianism is often seen as somehow better, if it comes from the left.
If people truly value democracy and freedom, authoritarianism should be opposed regardless of its underlying political color.
This is exactly the train of thought I had thrown at me by another commenter who was insistent on bringing up the fact that the right wing is "worse" somehow. You're right, it is very disappointing to see.
Is there an effort by these "loud" individuals to drive a focused disinformation campaign targeted at nullifying legitimate votes? One third of the United States is entirely sold on it. That is quite "influential", I would say, and presents clear and present danger.
You've addressed nothing I've said and launched a demand for sources on cherry-picked words from the point I made. I don't want to, and won't, argue with ideology and party lines.
You've made nearly identical points to me just about the right for some reason, despite the fact that I'm not even talking about them. I've used the word 'right' once in any other comment until this one. Not sure why you're trying to turn this into a right-left partisan shit-slinging match. Not every discussion of the left necessitates a discussion about the right's negative traits, and vice-versa. If you truly believe this, I suggest you get your head out of American partisan ideology.
Edit: fixed my percentile thanks to child comment!
Inflation. Being a millionaire or having a six figure salaries used to have much more weight during the 80s.
Pretty much any senior level engineer at FANG can be a millionaire if they saved, but they can barely afford a standalone home in San Francisco. What does the term 'middle class' even mean if they can't afford a home?
Only 20% of millionaires surveyed feel they're rich.
https://www.cnbc.com/2021/05/12/net-worth-to-be-considered-w...
And of course they don't "feel" rich. Lifestyle inflation is a thing. Trade the Civic for a Tesla; send the kids to private school; buy organic groceries; take international vacations every year or so; yet still find the means to save more money each year than the average household in the USA earns. Feeling is a state of mind, not a state of being.
6 percent
And if anyone is interested in the household wealth distribution (as of 1Q21):
Top 1%: $41.5 trillion | 90%-99%: $48.8 trillion | 50-90%: $36.5 trillion | bottom 50%: $2.6 trillion
$129.5 trillion total household assets.
There are around 128 million households in the US. The average American household is now worth a million dollars (the median is obviously far lower).
That top 1% of US households - 1.28 million households - holds an average of roughly $32 million in assets.
There are still hundreds of billionaires in the states, and they can still access tax havens regardless of renouncing citizenship.
Take the logarithm of the number of people who renounce citizenship and you will have the number of people with outsized influence.
Maybe you didn't know this but Americans living overseas still have to file and pay US taxes, often getting double-taxed buy two different countries - and often by a higher tax country than the US.
In fact, the US is one of only two countries in the world with this arrangement. I'm an American living overseas and it's a bit of a logical nightmare dealing with all the requirements. Even opening a simple checking account is difficult now for Americans overseas.
Americans who haven't lived overseas or haven't traveled much often have difficulty empathizing. But when we were living in the US, I would have found it very strange if not absurd if my non-US born wife had to file and pay taxes to her country of birth.
If there's a tax treaty between the two countries, they're not going to be double taxed. They will simply pay tax at the higher-country-rate, and owe nothing to the other.
If there's no tax treaty ... I'm not familiar with how that works. The US has tax treaties with many countries around the world, especially the OECD nations.
However, when you relinquish your citizenship you pay an exit tax which is more or less equivalent to what you'd pay if you sold all your assets and paid gains taxes, so I'm not sure how this move really helps billionaires, except that they don't have to pay taxes on future gains.
I am sure they never, ever, ever lie about their assets.
EDIT: I’m aware of the rules regarding income taxes for Americans based on their citizenship and not on where the income was earned. My questions address this and by saying ‘yes’ to them I’m indicating that these rules are dumb in my opinion.
There's no loophole here, a large majority of countries work this way, and OECD countries certainly do (although some have different treatments for short term residents). Usually the logic is: if you don't pay taxes in country A, you'll pay in country B anyways. And you'll pay an exit tax when you go from country A to B in many cases, so country A gets their cut.
Maybe people no longer want to live in US and it is wealthy that have it easier to actually go through with this?
Or maybe they actually live somewhere else and don't like paying their taxes TWICE. Almost every country in the world (except US) requires taxes based on residency, not citizenship.
For example, being Pole, if I spend more than 180 days in Sweden, I now owe taxes in Sweden but no longer owe them in Poland. That is because Poland recognizes that, while I am Polish citizen, I actually was Swedish resident during that tax year. And have an agreement with Sweden so that it is clear where I have to pay my taxes.
The US doesn't want to play nice and will only provide you with a little bit of credit for the tax you had to pay in another country. But if you earned a lot, you now have to pay it twice.
I actually know 2 or 3 people that work here in Poland that resigned their US citizenship for exactly this reason. Because IRS will hunt you down and demand your taxes even if you don't set foot in US for decades. It has been a topic in our newspapers couple of years ago when we still looked up to US as better place to live and people would need explanation for why somebody in right mind would want to resign US citizenship in favor of Polish.
I have even heard of a person that had to US citizens as parents but never set foot on US soil, that was hunted by IRS to pay taxes.
It is not like people don't have to pay taxes in other countries, though some have smaller rates. To get better picture you would have to look at where they actually went.
The US has similar arrangements with many countries, and you are not doubly-taxed. You simply pay taxes at the highest rate of the two (US and <other country>).
Likewise, if you move to the US from a higher-tax country, and the US has a tax treaty with that country, in your first year in the US (assuming you move mid-year), you will owe taxes to both countries, but will only pay the US rate overall. My first year in the US, the US government paid me US$600 because in their eyes, I had paid the UK too much in taxes for the 5 months I had worked there.
The hassle is that you still have to file with the IRS, even if your actual tax liability to the US is zero.
But do you see how punitive that is to US expats? It means that they never benefit from tax mitigation efforts in their resident country if the US has higher taxes on that. That, tax-wise, they are perpetually worse off than US residents and their local neighbors.
Think about the effect of this on small businesses (which are hardly alone in their troubles). Small businesses owned by US expats are at a perpetual disadvantage relative to local businesses because they can’t operate purely within the local tax environment. If the US introduces some poorly thought out regulation, like the GILTI tax, they are hit completely independently of the local competition through no fault of their own.
Besides, if the resident country decides to mitigate some local issue by lowering taxes, what business is that to the US? It’s criminal that it uses its own citizens to siphon off another country’s wealth.
My dispute was only with the term "doubly-taxed", which for countries with a tax treaty is simply false.
Nevertheless, you are correct that as a US citizen, you are destined to pay max (USTax (income), OtherTax (income)). I don't agree with this, but it's not called "double taxation".
In fact, countries that have high standard of living usually have equal or higher taxes than the states.
Contrary to what you may assume, especially people who have sought an alternative lifestyle abroad value value having a high standard of living, and not going to move to some shithole just because it has lower taxes.
I'm honestly still trying to figure this out but that's what I understand so far. Another interesting consequence is that calculating long term investment cost basis's sounds like a f'ing nightmare. Maybe that's why the step up rule exists?
This is so wrong at so many levels. Im not from the USA, yet I own Disney stock and visit the USA every year for tourism. Should i be blocked as well?
They're effectively the only country that believes they're entitled to non-citizen and non-resident income, but we're the "selfish lot" for relieving ourselves of a double tax burden to a country we don't reside in? No thanks you can have it back.
That seems unnecessarily vengeful considering that foreigners (that weren't originally US citizens) weren't subject to the same restrictions.
As it turns out, it's no longer the 80s, and there are increasingly multiple other countries were the super-rich can move their activities, wealth and lifestyle to without missing a beat.
Hanging around financial circles, I've seen a large exodus of people through the pandemic star the process of moving pieces towards places like Dubai and Singapore.
abandoning your country for lower taxes so you can "live your lifestyle without missing a beat" is disgusting to most humans. The wealthy have abandoned any sense of duty to their fellow citizens and are somehow shocked people are angry about the situation
But it's never enough. taxes already work on a scale such that the rich pay more (% wise), and they still owe more?
Almost every aspect of participating in the economy is taxed, e.g paying business-related taxes - those that participate more therefore pay more of these taxes too.
It seems "what is owed" is never clearly stated so you can always be hit up for more.
Being forced to give a large portion of my family's hard earned wealth to a tired, ineffective institution which aims to invest it in initiatives I think will ruin the economy? Why in god's name would I do that if I have the choice not to?
The wealthy are only wealthy because the non-wealthy people who vastly outnumber the wealthy, allow them to keep their capital. I think massive wealth inequality is making a significant number of people rethink this generous position.
But it has yet to be taxed as income. Even if it doesn't devalue, you can't use it until you dispose of it, incurring additional tax.
> The wealthy are only wealthy because the non-wealthy people who vastly outnumber the wealthy, allow them to keep their capital.
The wealthy can afford better weaponry than you. Are you alive only because they allow you to live?
> rethink this generous position
Do you think you are entitled to something just because you could (forcibly) take it?
I think you're underestimating the legal maneuvers these people can afford to find that have got then to where they are.
The billionaires can just dock their yachts in international waters.
The premise here is dead wrong. The top 1% pay ~40% of taxes; the top 5% pay ~60%. So not only do these people create the wonderful consumer goods that enrich your life; they also provide the roads, police, fire fighters, etc. Show some gratitude!
Do we forbid foreigners from holding US stocks, assets, etc?
Who do you think is financing the profligate lifestyle we live, compared to our true earnings?
Globalized labor and environmental exploitation, of which the wealthy are gaining the most.
> Between the lines: While the numbers are down this year, that's probably because many U.S. embassies and consulates remain closed for COVID-19, and taking this grave step requires taking an oath in front of a State Department officer.
So it seems these are American passport holders who already live in foreign countries, so contributing to American infrastructure, etc, but not benefiting of those things. Obviously having embassies you can go to for help anywhere around the world is useful, but if these are dual-passport holders they probably have the second embassy, for example any EU embassy would help any EU citizen [1].
But well, 2020 saw the worst of Trump saying "Everything is under control!" while ICUs (and morgues) overfilled, so maybe that's a reason for the renouncements. Or maybe was there some new law which was going to come to effect in 2021?
Anyway, I find "forbidding re-entry" is extreme and tinpot-dictatorship-esque.
[1] https://ec.europa.eu/info/policies/justice-and-fundamental-r...
If I ever move back to Australia, I'll have to file US taxes and other reports such as FBAR for the rest of my life. If you get it wrong, they can and have seized up to 50% of your wealth. Not because it's owed, but just as a penalty.
And many Australian financial institutions won't let me open an account because of the reporting requirements.
This isn't just about the rich avoiding taxes. It's about the US overreaching and creating headaches for lots of people.
“Renouncing citizenship” means they’ll give up none of the influence, lose the taxes, live how and wherever they want.
The best thing to do is forbid them re-entry into the country nor to hold controlling interest in any company in the US.
Faced with actual consequences and true separation from the actual thing they care about (their source of wealth, not the country) they will reconsider. I’m not sure if this is a net plus, as they are a selfish lot.