Wealthy Could Pay To Forfeit Citizenship
The Clinton administration is cracking down on the dozen or so rich people a year who renounce their U.S. citizenship to avoid taxes. There’ll be a slight exit fee amounting to $2.2 billion over six years.
About 850 people abandoned their U.S. citizenship last year and - judging from published reports - the Treasury Department believes a few dozen of these are rich people seeking to avoid capital gains and other taxes.
Among the billionaires who’ve already left are investor Kenneth Dart, president of Dart Container Corp., for Belize, and John Dorrance III, heir to the Campbell Soup fortune, for Ireland.
However, effective Monday, if Congress accepts the administration proposal, renunciation of U.S. citizenship will be considered a taxable event.
The tax would apply only if an expatriate has more than $600,000 in gains and it wouldn’t apply to real estate or pensions. The department said the tax would rarely apply to people with gross assets of less than $5 million.