Great article about how insane US tax policy is driving some people to renounce their US citizenship.
The basic problem is that the US taxes Americans on their world-wide income. This almost sounds equitable, except that
- the US is the only nation that does this
- every other nation that has an income tax only tax their citizens on domestically-generated income
- for certain individuals, you end up with a situation where they end up in the highest tax brackets in both the US and overseas, which is double taxation, with very little leftover for the taxpayer.
Admittedly, this mostly only affects rich people, and I’m all for the rich paying their fair share of tax, but the key word there is “fair”. I’d point out that the Beatles, at the height of their popularity, were in a 95% marginal tax bracket (leading to George Harrison’s “Taxman” and the line “That’s one for you, nineteen for me”).