Exit Tax for U.S. Expatriates to Become Law

Somehow we missed this one.

From the

Manifesto of the Communist Party 1848

II -- PROLETARIANS AND COMMUNISTS

Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.

These measures will, of course, be different in different countries.

Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all emigrants and rebels.

5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.

6. Centralization of the means of communication and transport in the hands of the state.

7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc.

Not anymore!!!

28 May 2008

New rules will impose tax on expatriates and withholding requirements on trustees

Giving up a U.S. passport will soon carry a steep price tag. A new law passed by the U.S. Congress and sent to the President will subject certain individuals who expatriate or give up their green cards to immediate tax on the inherent gain on all of their worldwide assets and a tax on future gifts or bequests made to a U.S. citizen or resident.

Tax practitioners had been made to feel like the boy who cried wolf in recent months as the U.S. Congress repeatedly threatened to enact legislation aimed at U.S. citizens who expatriate. Congress finally made good on those threats by unanimously passing the Heroes Earning Assistance and Relief Tax (HEART) Act (the ‘Act'), which provides tax relief for active duty military personnel and reservists.

The new tax regime applies to certain individuals who relinquish their US citizenship[1] and certain long-term U.S. residents (i.e., green card holders) who terminate their U.S. residence (hereafter referred to as ‘expatriates').[2] The so-called ‘mark-to-market' tax will apply to the net unrealized gain on the expatriate's worldwide assets as if such property were sold (the ‘deemed sale') for its fair market value on the day before the expatriation date. Any net gain on this deemed sale in excess of US$600,000 will be taxable. MORE HERE