Want to secede? The IRS has news for you
Departing Americans will find it hard to escape the long arm of Uncle Sam.
But are supporters of such an idiotic move thinking about the potential tax consequences?
Escaping the long taxing arm of Uncle Sam is difficult and can be expensive. Americans who live abroad still must pay U.S. taxes if they have yearly earnings above $100,000, a policy which has long been a sore point for expatriates.
Americans abroad are required to file taxes with the IRS even if they don't owe the U.S. any money. Some foreign residents may even still owe state taxes. To make matters worse, U.S. citizens who renounce their citizenship are subject to a one-time exit tax of 15% on the fair market value of all their assets less their basis costs. Giving up a U.S. passport doesn't get someone out of paying any back taxes.
Seceding from the union also presents all sorts of practical problems for states. Texas, which many Texans are quick to point out was for a brief time a foreign country, is a case in point. Do the 65,000 or so residents of the Lone Star State who have signed the petition believe that the U.S. would just hand over tens of billions in assets such as interstate highways, military bases and border crossings without anything in return? It's doubtful.
An independent Texas would still need plenty of help from the U.S. The Texas Rangers and the state's National Guard would probably not be able to battle Mexican drug cartels on their own. Thank goodness, most Texans and residents of other states oppose this daft idea, which didn't work out so well when it was last tried 150 years ago.
Though the idea of secession from the U.S. seems tinfoil-hat crazy, wealthier Americans are increasingly renouncing their citizenship for tax reasons. According to Fox News.com, as many as 8,000 U.S. citizens are expected to give up their U.S. passports this year, more than double the 3,805 in 2011. The move can save these former Americans big bucks.
"Some are philosophically disgusted at the course our country is taking, in all kinds of ways," tax attorney James Duggan told the site. "They're making a strong protest of 'enough is enough.' But largely, it's an economic decision."
Perhaps those who want to secede also are disgusted by the direction the country is going. If that's true, they should fight for their beliefs. Those that want to quit the U.S. are like children who take their ball home when they are losing on the playground. It's the ultimate exercise in selfishness.
Follow Jonathan Berr on Twitter @jdberr
More from MSN Money
- Why McDonald's will top $100 again
- Will 'Car of the Year' award power Tesla?
- 800 million Facebook shares hit the market
These people are the equivalent of a bunch babies crying because they did not get their way. They thought it was a fluke that Obama won the election the first time and now that he was elected a second time they are crying even more. And they are like Romney trying to blame it on the people that they actually ignored.
These secede people, mainly in red states, are dumb and nasty. Not very patriotic either, if they won't even get behind, and try supporting, their elected president and at least give him a chance to fix what the last group left him and our country with. Instead, seemingly, they'd rather see things go to hell than support him. Why? Because he's black? Because they've bought the "socialist" meme? What a bunch of LOSERS. If they did secede, it wouldn't take long before the fools would find out which side was better off.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Breaking up big banks is an untested solution to the too big to fail problem that attempts to isolate and dismantle large, troubled institutions while protecting the rest of the economy.
VIDEO ON MSN MONEY
[BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.
Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.
Upon returning into positive territory, the key indices were ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'