So much for that escape plan...

Monday, July 07, 2008

You can leave...but you gotta pay.

Just last week I read an article about all of the 'brain-drain' going on in France. The United States is the only industrialized country in the world that makes its citizens pay taxes on income earnings outside the country. France does not tax income earned by French citizens when it is earned abroad. The tax burden inside France has gotten so high that very large numbers of professionals are moving out of the country. So many have moved to London that it is now the seventh largest French city in the world!

So, what does this have to do with the United States? Just this morning I read where Congress has passed H.R. 6081, known as the Heroes Earnings Assistance and Relief Tax Act of 2008. Almost the entire bill is related to increased benefits for veterans and families of deceased military personnel. Almost the entire bill.

At one time or another, either with tongue-in-cheek or in exasperation (particularly around April 15th when our taxes are due), we have all probably joked about just packing our things and moving to Canada or some island in the Bahamas to get away from the taxes and corruption in Washington. Well, apparently our politicians are getting a little nervous that some of us just might do it.

Buried in that bill for veterans and their families is Section 301 – Revision of Tax Rules on Expatriation. I am greatly oversimplifying how it would work, but, in essence, if you decided you've had enough and leave, you have to pay a tax on everything you own as though you sold it on the day you left. How about that for a little incentive to stay here? Oh, you could just ignore it and not pay it, but then you will be arrested for federal tax evasion if you ever try to come back to visit. Am I the only one that finds it incredibly ironic that, while most everyone in the country is concerned about illegal immigration and Congress can't seem to find a way to agree on how to keep them out, they can find a way to come together and pass a law to keep us in? Why are they more concerned about us leaving than illegal immigrants coming in?