Thursday, December 18, 2014

If You Do Not Have Your Assets Outside of the US Yet, What Are You Waiting For?

Jeff Berwick

The trajectory is clear. Painfully clear.

The US government is so beyond bankrupt it isn't even worth belaboring the point. We've spent the last five years here doing so.

What is more important, if you are an American who still has most of your assets inside the US, is that the walls are closing down around you at an unprecedented rate. Nearly daily the proof continues to mount.

After the US financial system collapsed in 2008 it is now only being held up like Bernie of Weekend at Bernie's with money printing and holding interest rates at nearly 0%. In fact, today, December 16th, is the sixth anniversary of the Zero Interest Rate Policy (ZIRP) of the Federal Reserve.

Many people began to see the writing on the wall after 2008. One of them was Edward Saverin, a co-founder of Facebook, who renounced his US citizenship in 2012 and moved to Singapore. In response, the US Senate tried to pass the "Ex-Patriot" act which even considered not allowing those who dare leave the US ever to return. Since then a record amount of Americans have renounced their citizenship to the point where the US government just recently raised the "fee" to renounce by 400%, to $2,350 ... and it will likely go higher and more laws will be put in place making it more difficult for people to legally disassociate from the bankrupt US government. That, of course, is in addition to the "exit tax".

Put into effect in June 2008, US citizens who renounce their citizenship are subject under certain circumstances to an expatriation tax, which is meant to extract from the expatriate taxes that would have been paid had they remained a citizen: all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date, which usually results in a capital gain, which is taxable income. In other words, if you have substantial assets and wish to escape the US tax system you will still end up paying a large amount of tax just to leave (there are ways around that however - read below).

And that's if you can even get out at all. We are starting to hear word from numerous sources that Americans who have applied to get their US passport or to renew it, in order to expatriate outside of the US, are experiencing very long delays and in at least one case a person was told to "just ask for a refund because we aren't going to issue it".