Re: Free Switzerland

I would like to make a small correction concerning something that an LRC reader wrote to Lew. The reader wrote:

“Did you know that the US is one of the only countries in the world that demands the payment of domestic taxes from expatriates, even if they renounce their citizenship?”

If a U.S. citizen who has a net worth of more than $600,000 (it may be higher now) gives up his U.S. citizenship for tax purposes, the United States government can now continue to demand taxes from the person for the first 10 years of his expatriation. This doesn’t mean that the U.S. government necessarily will do this—just that it is now within its legal rights to do this. It will, however, immediately tax them on the value of their assets at the time of their expatriation. (It can now also bar anyone who has expatriated from the United States for tax purposes from ever entering the United States again. To my knowledge, this has yet to be actually enforced on anyone.)

I also understand that the only two other countries in the past 100 years who enacted this sort of expatriation tax were Nazi Germany and the Soviet Union.

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10:48 am on November 12, 2009