- Posted June 24, 2012 by
This iReport is part of an assignment:
The Rich Start Exodus from US of A
There have been those voices crying in the wilderness of fiscal conservatism. These voices have been saying if the federal government continues to stir uncertainty, if elected officials continue to call for a narrowing in the income gap and if President Barack Obama and Democrats continue to push for higher taxes on the wealthy, the rich would pack bags and leave American shores.
There is a report out today in the New York Post noting that the number of rich denouncing their citizenship and fleeing the country is increasing rapidly at record levels.
Startling new data from Uncle Sam show that defections by Americans are expected to double this year, largely to avoid any stiff tax bills resulting from the proposed 55 percent hike on the rich — as well as the likely expiration on Dec. 31 of the Bush era tax cuts.
As many as 8,000 US citizens are projected by immigration officials to renounce in 2012, or about 154 a week, versus 3,805 in 2011, or about 73 per week.
“High-net-worth individuals are making decisions that having a US passport just isn’t worth the cost anymore,” said Jim Duggan, a lawyer at Duggan Bertsch, which specializes in protecting assets of the wealthy.
“They’re able to do what they do from any place in the world, and they’re choosing to do it from places with much lower tax rates,” he said.
“Some are philosophically disgusted at the course our country is taking in all kinds of ways. They’re making a strong protest of, ‘Enough is enough,’ ” said Duggan. “But largely it’s an economic decision.”
There’s a catch to reaching tax nirvana. To renounce citizenship — and thus escape any future US taxes forever — a citizen must buy that unique freedom with a a one-time exit tax of 15 percent on the fair-market value of all assets — including real estate, securities, businesses and personal belongings — less their basis price.
“Many see it as a cheaper way to get out from under any tax liabilities on future wealth, while their assets have lower values during the weak economy,” he said.
Will the increasing number of rich leaving be an issue Republicans use in trying to defeat President Barack Obama's re-election bid?
Should the President win re-election will the rich leave in even more numbers than they are already?
What happens to the US, the middle class if the rich, who pay most of the US income intake are no longer available to tax?
What happens to the social programs, the safety nets?
Will the middle class step up or will congressional Democrats back off the push to tax the wealthy at ever higher rates?
From the Cornfield, we have seen the same scenario playing out in Greece, Spain, Italy where the wealthy are fleeing and finding new lives in other nations.
Are we headed the same way?