CC4: Taxes

Margaret Collins, a writer for Yahoo! News, states in her article, "Cost of Dropping Citizenship Keeps U.S. Earners From Exit," that the IRS has taxes and fees in place that essentially trap extremely wealthy people in America.

In the article, Margaret Collins says, "Exit taxes and other costs make it prohibitive for most high-income taxpayers and small-business owners to leave the U.S., though they may want to go because of higher taxes at the federal level and in states such as California." The exit taxes are designed to prevent prevent people who have a lot of money from leaving the U.S.. I am not one of those wealthy people, but this seems a little unfair to me.

Margaret Collins states in the article, "A high-income couple worth $100 million whose assets have $50 million in gains may have a $10 million tax liability if they decided to leave this year." This theoretical couple has enough money to live luxuriously anywhere in the world, even after that significant amount of money is taken. It still seems wrong to take so much money that they (theoretically) earned and essentially make them pay to a huge some of money just to leave the U.S.

Also stated by Margaret Collins in the article, "If the owner of a limited liability company establishes a foreign corporation conducting business in the U.S., it may have to pay several layers of U.S. income tax. Those include a top 35 percent corporate tax, a 30 percent so-called branch profits tax and as much as 43.4 percent tax on non-qualified dividends distributed to a shareholder, Entin said." This means that if a business is moved out of the U.S. but still conducts within the U.S., then the business will be subjected to much higher taxes than if it had simply remained within the U.S.. This discourages businesses from taking their money elsewhere.

Benjamin Franklin, one of the U.S.'s founding fathers, once said, "In this world nothing can be said to be certain, except death and taxes." This is certainly true in this case. The article even mentions that if someone who moved out of the U.S. but still has children here dies, then there are levies similar to the estate tax that the money has to go through before the children can receive the fraction of the money that will be left.

While millions of illegal immigrants receive amnesty and the benefits paid for by taxpayers, the people who pay for the majority of those benefits are stuck in the country.