On January 25th, Lenore Hawkins joined the Freedom Fighters to talk about Americans giving up their citizenship due to the onerous tax code.
- The current tax code is outrageous. In 1913 the Federal Tax code was 400 pages. It is now over 72,000 pages!
- Americans spend over 7.6 billion hours a year preparing their taxes which equates to about 3.8 million skilled workers, making the tax compliance industry SIX TIMES the size of the U.S. auto industry.
- 82% of Americans need help preparing their taxes
- 60% hire a professional tax preparer.
- According to the IRS, “If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.” Thus you are subject to double taxation; tax for the country of residence and a second level of tax from the United States.
- If you decided to give up your U.S. citizenship, you are taxed on all your assets using a mark-to-market regime, which generally means that all property is deemed sold for its “fair market value” on the day before the expatriation date. You will be forced to then pay taxes on those assets as if you had sold them.
Rather than using a punitive tax code that attempts to bar people from leaving, how about building a legal code, regulations and tax code that attract wealth and high income earners from all over the world? Their assets and innovation will help the economy grow, providing much needed jobs.