Want to secede? The IRS has news for you

Departing Americans will find it hard to escape the long arm of Uncle Sam.

By Jonathan Berr Nov 14, 2012 3:21PM
Image: US Capitol (Donovan Reese/Getty Images)Residents in 34 states, apparently horrified at President Obama's re-election, have reportedly signed petitions to secede from the United States. Support for such a move in Texas has reached a point where it requires an official response from the White House.

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

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Nov 28, 2012 10:59AM
he is not president of America, he is a wanna be hitler and wants to control, thats why we have 47% on welfare and food stamps, so obama has control over these people, but a storm is coming
Nov 26, 2012 1:16PM
Jonathan Berr,

First and foremost. What right does the government have to take money away from me to pay for the Federal government's incapability to soundly and effectively manage the tax payer's money and  budgets. They spend it frivolously and incur more debt, giving it away to entitlements we can't afford and to people who are not qualified to receive them. Here is a bit of historical fact Jonathan. The U.S. was born out of secession (From England) remember "taxation without representation", the only difference now is that the representatives are the ones taxing us to death for their own insatiable spending sprees. In 1807, the New England states actually presented a "Yankee Confederation"  to secede from the union because the Southern States were expanding westward and fighting Indian wars while sending the war bills up north to pay for the expansion. Then you have the civil war in 1862. Secession goes back even further to 1860 after Lincoln's election. There is NO law or Federal Constitutional prohibition from a State wanting to secede from the union and any aggression or threat from the Federal government is tyrannical in a free Republic, Jonathan. Our history is full of secession. The fact of the matter is any State seceding would be more economically prosperous because the State would go back to the basic fundamental principles that our founding fathers laid for us, sound money (Article I, section 10 of U.S. Constitution/gold & silver standard as legal tender), No 16th Amendment (Central Bank printing fiat currency, causing inflation, bubbles, depressions, booms and busts and stealing savings in our economy through artificially low interest rates and the ponzi scheme of fractional banking/No Income taxes used to pay for the Federal Reserve's interest on the money it fraudulently prints & loans to the Federal government for spending on undeclared wars, astronomical deficits and insolvent entitlement programs at the expense of  the people's personal liberty, free will and individual choices. Welfare enslavement programs and the IRS 's diabolical enforcement of direct taxation on the people. The only form of taxation authorized by the original Constitution are excise taxes and tariffs to generate revenue. Smaller government, freewill, free markets and individualism, Jonathan. Also the roads don't belong to the Federal government, Jonathan. They were paid for by taxes from the citizen's of Texas. The military installations can leave, the State can construe their own military without the aid of any outside entity. The commodity, wealth and prosperity belongs to the people of Texas not the Federal government, Jonathan. They have no legal claim to the state's sovereign identity or wealth. Now we now who you are and what you stand for. You Imbecile rat b!@#rd.

Nov 26, 2012 8:46AM
The only thing that's idiotic is MSN's left wing sucking up. 
Nov 25, 2012 2:17PM



Nov 22, 2012 1:19AM
I'm with wiswiz.  In fact, I think we should wiswiz all over the guy that wrote this article.  

I'm not necessarily saying we should secede from the union but this Obama lover clearly has written a biased article and tries to make people that think for themselves out to be idiots.  Extreme over reach by governments throughout history have always called for extreme measures in order for anything to change.  There is no option that should be shoved off of the table.  

John Berr is a sheep that's been in the boiling water for too long.  This country's bureaucrats have brainwashed us since the beginning to the point where that luke warm water is now boiling and we are as idiotic as the frog that won't jump out if we think this country needs to raise taxes.  

"Don't Tread on Me"!!!     Uncle Sam.  

You've become a blood sucking giant and our ancestors left Europe to come to the "New World" for taxation similar to this.  The only problem today is that there isn't a "New World" to leave to anymore.  

Our founding fathers are rolling in their graves to know that we have to work the first 3 months of every year for this money sucking, inefficient thing we call our federal government.  And you're an idiot if you think they deserve more.  The more you give a person the more they want.  It's no different for government.  The more you give them the more they spend.  

The incompetence in politics if frightening.  To think a politician can't balance a check book is pathetic.  We all have to in our personal finances, why can't they on a federal level?  It makes me sick.  

Nov 21, 2012 5:37PM
This whiney behavior is not as uncommon as you may think.  I recall the remarks of California State Employees in Sacramento when then Governor Pat Brown arranged to bring N. Calif. water to a thirsty S. Calif.  Talk of one part of the state seceding from the other part was rampant.  Of course the talk eventually died down as it will with this latest nonsense yak-yak. 
Nov 20, 2012 11:34PM
How amazing is it that we are having this conversation? Even though Mr. Berr goes out of his way to ridicule these protestors he seems to take their proposed secession seriously. Why else would he propose a series of quasi punishments for their leaving the union, but never addressing the root malaise that has caused this outpouring of ill will toward the government of the land of their birth.

Does anyone who watched the election doubt that there is a large geographic portion of this country that is tired of the imposition of the will of a small minority of the states that had virtually all of the real voice in our last election? Almost none of the disregarded states had even a visit from their prospective new president. Let us not even speak about the disgrace that is our record of completely discarding the majority of the absentee ballots of our service members, while we allow email voting to those displaced by Sandy.

While secession strikes me as a mistaken effort doomed to failure, we should take note of the protest as a serious call for discussion about the many wrongs that exist in our system. The real selfishness that is being exposed here is that of a self-serving ruling political class fueled by bought votes. A Republic cannot long prosper when achievement is scorned, honesty is ridiculed, and dissent is labeled as cowardly or worse. We have long stood for, "the little guy," -the underdog, and that has made us great. The new reality would have the country ruled where the only protected class are those who fit the prejudices of an ill-informed majority. How can we be a free society when our very political life is ruled by just a few well paid population centers and  marketing and political strategies suited only to them?
Nov 20, 2012 4:37PM

Here's my surprised face!!! Texas the giant shyt hole that brought us George Bush, Mr. Roper(Ron Paul and that idiot Gov. Perry. Is it possible to use Texas as a Nuclear test range? Should I be saying this in spanish? Let me guess.... Georgia, Alabama, Mississippi and Louisiana raised their hands as well. A bunch of useless redneck states: dumb, poor and republican. All of the people in these states could easily pick up and leave, it's much easier when your house has wheels, you married your twin sister who has a long haul license and you think Florida is a national park.

Nov 20, 2012 1:33PM
Let's see. The 2010 US census puts the population of Texas at 25,145,561. So you have 65,000 imbeciles that are nuttier than Grandma's fruitcake. Sounds about right for Texas. It'd be funnier than a monkey banging a football if it wasn't so pathetically sad. lol
Nov 20, 2012 11:38AM
You all realize this secession talk is not serious. It is just sour grapes from a lost election. 
Nov 20, 2012 7:46AM
Nov 19, 2012 12:34PM

                                                         Between a rock and a hard spot

The United States federal government will spend 3.8 trillion in 2012; it will take in 2.5 trillion, which leave a debt of 1.3 trillion. To balance this budget Americans will have to raise taxes by 50% or cut spending by 35%, or a combination of the two. Plus we must start making payments on our 17 trillion dollar federal debt. If we raise tax sufficiently to reduce the 2012 debt, the American people will revolt. Congress will not cut spending by 35% because they will have to cut the programs of the vested interest groups that keep them in power. If we don’t start paying on the federal debt lenders will question whether we are going to pay our debts, and interest rate will increase as the risk of not getting paid rises. If interest rate on treasuries goes to 5%, it will add another 650 billion to our federal budget. On top of this the federal government has about 147 trillion in unfunded liabilities. With the reelection of Obama it is obvious the American people have no understanding of our economic condition. With Obama wanting a tax increase of 1.6 trillion over 10 years and congresses wellness to negotiate on this should tell us that our leadership doesn’t have a clue either. We are going bankrupt and there is nothing we can do about it!!!

Bankruptcy does some good things; it gets rid of the debt, it redistributes the wealth, it reevaluates the assets, gets rid of bad management and obsolete ideas and America can start over again.

Nov 19, 2012 10:03AM

I'm looking into it, just haven't decided on a country or climate yet.  The FOOL ON THE HILL has already disfigured the face of this country and is now in the process of finishing it off financially.  Unfortunately for the rest of the world his antics will affect them as well.  and now, he isn't even instated for a second term, and is already globe trotting again.  at an average cost of 1.5 millon per trip the expense of his travels alone could have funded a meduim sized bank and that doesn't include his wife or his daughters galavantings.  I say we need to sucede, give them Washington DC and we'll take the rest - see how well they do with that.  They need cash to function and If we-the-people close the purse strings and just refuse to pay anymore it's not like they can put us all in jail or evict us from the country.  In addition PERSONAL INCOME TAX is unconstitutional, but you already knew that right? Why should we carry the burden of the financial well being of this country.  At a point in our history the rest of the world paid to do business here in the form of import taxes and tarriffs.  Then Free Trade Act was established and poof all the revenue went away as did the jobs and the industry that could make a greater profit by exploiting the poor countries of the world.  Now we are reaping the benefits of that poor judgement.  In addition illegals are allowed to milk the system without contributing a single cent to it.  So - do away with personal income tax and ban it forever but in it's place institute a federal sales tax of with a permanent cap of 2%.  That way anyone who spends a dollar in this country will contribute to the system.  Write your congressmen and start badgering them to get something started.  If we can stick together enough to sucede from the country we should be able to stick together to enact the changes we want.  It's all about the bottom line, and the golden rule - The guy with the gold rules and we the people have the gold.  We're just stupid enough to give it a greedy government thinking they will act in our best interest instead of their own.  Can you spell GRIFTER boys and girls?

Nov 16, 2012 9:49PM
Why not take 15% of General Electric that makes millions and pays no taxes?
Nov 16, 2012 3:31PM
Staying around to fight for another day is like staying on the Titanic to see if you can keep it afloat.  The fat lady has sung and it's time to jump ship.  All rational debate is over.   Those who want to suck on the government tit (corporations, welfare queens, disabled frauds, farmers paid to not farm and the infamous military industrial complex)  not to mention the demographics of blacks, latinos, jews, asians, gays and women who vote lock step with the liberal tax, spend and borrow majority have simply won the battle while we have all lost the war.  A republic only lasts as long as it takes for the people to figure out how to vote the national treasury into their own back pockets, and they have figured that one out in spades now with a complicit leader in the White House. 
Nov 16, 2012 12:35PM

You all are a bunch of ****es. This is a democracy and it is based on people with differing beliefs coming together for the common good. Talk of secession is absolutely the most stupid thing I have heard of. You bigots that used to tell blacks to go back to Africa should be told to get the hell out of our country, all 50 states. Take your ball, losers, and move to Australia or New Zealand, oh you can't do that because they won't allow you to become citizens of their countries.


You right wing dingbats must be living under the Fox News network that has fed you so much bs over the years that your minds are gone, your brain cells have been altered. Most of you don't even have an idea of what Socialism is. If you think the country has financial problems, then it is your fault for sending people to Congress who caused the problem and electing presidents who raided Social Security and borrowed money to fight a war in Iraq. 

As for my opinion, just get the hell out of our hemisphere. Your talk is crazy and stupid and those who supported Obama know just how nutty you people are. Instead of belly aching, get in touch with your congress people, both Democrat and Republican and tell them to get their butts in gear and learn to negotiate and with each other. In all due respect, many of you must have been educated under a rock in Texas and have no idea of what you are even talking about. Hey, you don't want to be an
American citizen, then get the hell out; move to Europe or Asia or to another planet.


Nov 16, 2012 12:19PM

First of all I served in the US Navy for 12 years on balistic missle submarines during the cold war.  I find your point of view to be out of touch with what the real issue that these people are trying to make.  The "real" middle class is getting squeezed from both sides.  We are the people that go to work every day and are asked to do more with less to bring larger profits to the bottom line of our employers. When  we receive our paycheck we see 30 to 40 % of it taken by taxes to the federal and state governments.  What we have left we pay our mortgage, with a property tax escrow account, by food with sales taxes attached, pay for gas to get back and forth to work which is taxed, and try to save a few dollars so someday we may be able to retire. When we start taking out of that savings it gets taxed again. And what do all of these tax dollars do? Go to the special intrests that have the money to buy our "representitives and senetors, or to life long welfare/disability recepiants.  I also have an autistic son who is 24 and working 40 hours a week, not sitting home drawing a disibility check.  He has been taught the value of a days work for a days pay.  Do these many voices that are fed up want out of the union?  Probably not, they just want to be heard.

Nov 16, 2012 11:25AM
The US is a divided nation..its a fact, its becoming more of an economic reality, the haves vs. the have nots...and there is no clear solution to this problem, during the Civil War the fight was over slavery, in the 21st Century, the fight is over economic gains, not enough people are earning a living wage, corporations are looking for profits and investors while workers are struggling.  Corporate America needs to focus on paying individuals a decent living wage.  In the end we all benefit, a rising tide lifts all boats, people will in turn put the money back into goods and services, this reality is not being embraced by companies that continue to take jobs overseas and marginalize US workers.  The rest of the world benefits as these companies bring much needed jobs and economic gains to their countries while our own country's standard of living decreases.  It is not sustainable, in order to stimulate and create a balance the government has to step in to prevent panic and chaos, but in the end the government can't handle it due to costs and inefficiencies, thus we get into more debt and it is a downward spiral.  GOD HELP US ALL!!
Nov 15, 2012 11:36PM
These posters are REALLY, REALLY NUTS!!!!!  Too bad insurance companies are screwing mental health providers. You like the current health system? YOU ARE NUTS11111111
Nov 15, 2012 11:25PM

 Imminent domain, and because of that know one will ever secede. And if you don't think it can be envoked gather up your people and make a stand. Congress will shut you down faster than the thought that made you so crazy.

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