Tag: tax exodus

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$690 Billion Disaster: Why High-Earner Exodus is Gutting Blue State Economies (NY, NJ, CA, IL)

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The $690 Billion Exodus: How High-Tax Blue States Are Hemorrhaging Wealth to Florida and Texas

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Ridgewood NJ, a seismic economic shift is underway, fundamentally reshaping America’s prosperity map. According to a stark new Census Bureau analysis, high-tax states—often dubbed “Blue States”—are experiencing a mass exodus of their most affluent residents, leading to a stunning financial hemorrhage.

The Historic Wealth Transfer Rocking America

The data reveals that New York and New Jersey alone hemorrhaged nearly $690 billion in resident income over the past decade. A staggering 2.1 million high-earners have fled soaring taxes and concerns over urban decay, relocating to sun-soaked, low-tax havens like Florida and Texas. This is not just migration; it’s a “regional bloodletting,” as economist Steve Moore describes it, fueling a historic wealth transfer from the Northeast to the Sun Belt.

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U.S. Hikes Fee To Renounce Citizenship By 422%

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U.S. Hikes Fee To Renounce Citizenship By 422%

Over the last two years, the U.S. has had a spike in expatriations. It isn’t exactly Ellis Island in reverse, but it’s more than a dribble. With global tax reporting and FATCA, the list of theindividuals who renounced is up. For 2013, there was a 221% increase, with record numbers of Americans renouncing. The Treasury Department is required to publish a quarterly list, but these numbers are under-stated, some say considerably.

The presence or absence of tax motivation is no longer relevant, but that could change. AfterFacebook co-founder Eduardo Saverin departed for Singapore, Senators Chuck Schumer and Bob Casey introduced a bill to double the exit tax to 30% for anyone leaving the U.S. for tax reasons. That hasn’t happened, but taxes are still a big issue for many.

To leave America, you generally must prove 5 years of U.S. tax compliance. If you have a net worth greater than $2 million or average annual net income tax for the 5 previous years of $157,000 or more for 2014 (that’s tax, not income), you pay an exit tax. It is a capital gain tax as if you sold your property when you left. At least there’s an exemption of $680,000 for 2014. Long-term residents giving up a Green Card can be required to pay the tax too.

Now, the State Department interim rule just raised the fee for renunciation of U.S. citizenship to $2,350 from $450. Critics note that it’s more than twenty times the average level in other high-income countries. The State Department says it’s about demand on their services and all the extra workload they have to process people who are on their way out.

https://www.forbes.com/sites/robertwood/2014/08/28/u-s-hikes-fee-to-renounce-citizenship-by-422/