In other words being a US citizen is no upside and all downside.
[citation needed]
The US has no wealth taxes like some European countries, and long-term capital gains tax is 15%.
Just to pick a few counterexamples:
Denmark has 42% capital gains tax on gains over ~$7600.
Netherlands has a 1.2% asset tax on assets held worldwide over something like $20k.
>I have friends who have never lived or worked in the US amd yet are asked to pay high US taxes.
Asked to pay or just to file?
US taxes are absurdly complex and expensive. The upside is that the system can be fairly easy to game / optimize.
So i travel between different countries without living much in any particular one and i pay zero tax. And if i ever want to live somewhere fulltime, i can defer income into trusts and collect it in future years when i happen to not be domiciled anywhere.
Options available to everyone except US citizens.
Or for example my friends in Russia who are US citizens have to pay a crazy US rate instead of the far more reasonable 13% in russia.
All the comments about scandi countries assume people actually declare income without using many more legal strategies available there compared with the US. The effective tax situation for wealthy US citizens is actually much worse, it is just obfuscated by the headline number.
Technically no, so does Eritrea tax non-resident citizens on their worldwide income.
And it's frankly hard to make sense of the rest of your comment.
It's difficult (or impossible?) as you say for an American citizen to basically be a perpetual tourist, not actually residing anywhere?
>to pay a crazy US rate instead of the far more reasonable 13% in russia.
>All the comments about scandi countries assume people actually declare income without using many more legal strategies available there compared with the US.
Well, yes, I am assuming that people generally don't try to live as a perpetual tourist and skirt tax burdens by not actually living anywhere.
>The effective tax situation for wealthy US citizens is actually much worse, it is just obfuscated by the headline number.
Still eager to see this proved.
as a non-US citizen i can live in the US for many years and keep accruing income/assets into a trust + take loans against said income/assets to fund expenses. then one year when i happen to be a perpetual tourist i distribute all of that from the trust to myself. zero taxes.
I'm not sure what exactly it is my income taxes pay for, but about anything I might want from a government is already paid for by direct billing or by some other type of tax. Maybe I'm paying for a seat cover of an F-35. Maybe I'm paying for a bridge repair that has been overdue for 30 years. I lack the attention span to follow the money that far.
That guy still pays sales taxes, and any taxes that may be indirectly passed on to him through business dealings. It isn't zero; it's just less than you, at the price of being a technically domicile-less nomad. The lifestyle is a bit more stressful, as you have to schedule mandatory events around several sets of local laws.
How is the Danish stock market doing these days?
I'd like to hear more about this. I'm a Canadian, and our conservative politicians are always saying that WE are the most wealthy-unfriendly tax regime in the world, and that it is stifling investment.
And I keep reading about how in Scandanavian countries, the rich have to give nearly all of their income back to the state, but they are impossibly nice people, so they don't mind. Are Sweden, Norway, Finland, and Denmark friendlier to the wealthy AND providing Universal Health Care to their citizens?
High-income tax rates are high, but not that high.
The income tax is progressive and hits the ceiling of 60% pretty fast. I don't remember exactly but I think it does if your salary is more than 60000 Swedish kronas (around 6000 euros). Universal Health Care is available to everyone who has Swedish ID (I do) and includes higher cost protection for dental services.
Without diving in I can tell Sweden is definitely not friendly to the wealthy but it's very friendly to a lot of people with everyday common jobs with lower and middle level salaries.
Thanks for the info.
I'd hazard that most of the repatriations/expatriations are from people living abroad and sick of the burdens of US tax/financial compliance
Spoken as a true first-world citizen.
Furthermore, good luck finding a place to invest in the first place. If looking for a US company, the likes of Vanguard and Charles Stanley will freeze your account if they find you reside outside the US. In the UK, I've gotten very used to seeing the text 'we are unable to open accounts for US, Cuban, Iran, Sudan, Syria, and North Korea persons'.
I make well below the standard deduction and just want to save a bit for my future. The US laws as they stand make this very difficult.
When I called to change my address for an old work Fidelity IRA years back, the panic in the advisors voice, as he informed me I'd no longer be able to contribute to the fund, was kinda funny. Considering I'd never personally contributed to the account in the first place.
Interactive brokers are the only broker I've found to actually advertise as for expats, but the 10k min is a bit much for me.
Not the cheapest though, but I think they may actually be cheaper than my work place pension! I need to sit down and work it out.
I started with a £20 deposit, and just set up a monthly transfer.
Ugh, this is maddening. I had a Kafka-esque conversation with a Charles Schwab dude whose scripted answers almost comically changed when he learned that I lived in the Netherlands. It was fine at first, even with the understanding I lived abroad. But their deceptively advertized "expat services" only apply to Americans living in HK and UK.
It wasn't as bad when I called Vanguard, aside from the non-answers they kept giving me at first (they kept saying it was against US regulations and illegal, which I know to be false; when I pressed, they admitted it was purely their own company policy). At least she wasn't literally reading from a script and took the time to check with some supervisors.
Even in countries like the UK where there is a tax treaty in place, it can be difficult because the UK offers a wide variety of tax wrappers to encourage people to save money. But those tax wrappers can count as PFICs for US taxes and you won't be getting the paperwork you need to do a QEF, so you have to Mark To Market
I farked up on an ISA because I never knew about any of this and ended up owing over $1000 in back taxes. If I had known enough to declare the PFIC correctly from the date I started it, I wouldn't have owed any where near that amount of tax on it :(