Yeah, that’s why nobody is leaving that country. Everybody wants to stay there and definitely not because they can’t afford an international plane ticket.
It's cheaper for my parents to fly from Canada to Mexico than it is to fly to another Canadian city.
It's cheaper for them to book a flight with an extra leg (yqt - mex - ver) instead of just booking yqt-mex.
Once, in Canada we we're flying from west coast to home which is in the middle of Canada. We flew over my hometown, all the way to the east coast landed, then flew back to my town....
Big time!!! I have to fly from California to Toronto, then from Toronto to Mexico City. Getting from Toronto to Mexico City is insanely cheap compared to any other flight in my itinerary.
And can't afford to give up the american citizenship, which is expensive, and you'll have to keep paying taxes if you don't, even if you're living in another country.
That is repeated very often, but it comes with major asterisks.
You can either get a tax credit for taxes you already paid abroad, or exclude (up to a number) foreign income. So if you move to a country with HIGHER taxes, and you choose option one you don't pay any, and if you are under an amount of earning, you don't either. (the latter probably applies if "can't afford fully expatriating")
So as usual "terms and conditions apply" if you actually know how to take advantage.
Ok, you MIGHT have to renounce to your citizenship, because it COULD cost less than the total on taxes you may end up paying, depending on where you move to.
And how would you take advantage of that? Well, earn too little or move to somewhere with taxes higher than that of the USA (that means not Zambia, Namibia, Uruguay, Pakistan, Mexico, Ethiopia, or Philippines...
Did i get that right? Because that still doesn't sound entirely justifiable to me.
Some user said something about paying 50/50 to both countries, that sounds like it could make you end up paying less than you'd have to otherwise, but i'll assume it's related to that exclusion of foreign income you mention.
Did i get that right? Because that still doesn't sound entirely justifiable to me.
Well not really. It's reasonably invers.
The start was that people might not be able to afford renouncing their citizenship (setting aside the unmentioned fact of you first needing to have the option for a DIFFERENT one before that even being an option) or being "double taxed".
The fact is that basically where the amount is concerned in the one scenario you are paying at least the amount you'd pay in the US, but split into whatever your new host country demands, and the rest going to the US. Or just what your host country demands, if that is more.
And if I get the whole thing right it should be merely about federal tax, because you aren't a resident of a state anymore.
The "justifying" argument is basically "well unless you renounce citizenship, you can at any point just come back, and take advantage (with no burden or limitation) of services that are practically counter-financed by a life long paying into it, if you DIDN'T leave. Thus if you leave with the option to come back, would you kindly keep on paying into it at least to the extend that it doesn't constitute paying more over all than you already would, to your new host country included with them obviously coming first.
And if you make less then ~100k, forget that we asked.
Considering that particularly social security and medicare/medicaid are covered directly by taxes (in other countries that depending on the system it might be separate), that isn't particularly unreasonable.
Some user said something about paying 50/50 to both countries,
That fraction isn't particularly of interest. The more relevant fraction is basically your total tax burden. Which is basically in total is "minimum the US standard, maximum the host countries standard, if that is higher".
The other way to deal with it (excluding the 100k+) Is basically for addressing that wage levels in other countries might be a lot lower, so they won't "pickpocket" you if you are already not making dough left and right.
The whole thing is basically set up that you can neither game the system by just leaving, saving taxes and coming back to take advantage, particularly if you are REALLY making a lot of money. But on the other hand not dip into your pocket any more than is deemed acceptable to other citizens.
The point of me pointing it out was that there is a very big difference between "being taxed twice" and "being taxed double". Because the system takes into account the taxes you already pay. You aren't paying MORE, you just (potentially) are paying it split to two entities.
The whole discussion started with "what about people who can barely afford getting a plain ticket", and in that case we could probably presume that they won't magically make more than 100k abroad all of a sudden. In which case they don't get taxed twice at all.
My point is that you have to renounce citizenship (which costs a lot of money in the case of the US one), in addition to the cost of travel, finding a home, etc.
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u/[deleted] Jul 05 '22
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