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Peso taking off

Discussion in 'Banking - Investing - Finances' started by Sedona, Jun 24, 2021.

  1. Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    This is nothing new. At least one founding father of the US supported UBI and it has been a topic of discussion ever since. I think a UBI could work, as long as most other social welfare programs were cut and "defense" spending was actually spent on defense and not policing the world and BS wars. But it doesn't really matter what I think, it probably will never happen in my life and without real world large scale implementation we will never know what the long term effects on the economy would be, we can only speculate on this extremely complex financial policy and the wider implications/benefits.
     
  2. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    Not in the UK I believe. I don't know the situation in other countries but perhaps other members can tell us.
     
  3. SkipJack

    SkipJack DI Senior Member

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    The US taxes its citizen no matter where they reside. This includes income tax and inheritance tax. (Gift tax.) There is a 108K income exclusion for people who reside outside the US but the full rate of income tax must be paid for income above this exclusion amount.

    Some countries do not charge income tax on their citizens who reside outside of the country. I think the UK is like this. On the other hand, I believe inheritance tax still applies.
     
  4. Dutchie

    Dutchie DI Senior Member Showcase Reviewer Veteran Army

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    Income tax for non-residents depends on whether or not there is a tax treaty between the country of origin and the country of residence. Such treaties, most of which follow the OESO model, determine which country gets to tax the income of the subject.
    Most countries in Europe have agreed such tax treaties with many other countries, so as to avoid cases of "double taxation".
    In many such treaties taxation of state pension remains the right of the country of origin, while taxation of private pensions will be the right of the country of residence (obviously you'd need to examine the exact treaty text in any specific individual circumstances). Other types of income (income from investments, from labour etc.) will often be taxed by the country where such income originates, but there are exceptions.
     
  5. Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    That is for income earned overseas. If you live overseas but your income comes from the US you are still on the hook for income taxes in most cases (most government employees do not get this foreign earned income exclusion but soldiers and contractors do when serving overseas). Completely irrelevant to the ultra rich though. Many of them have earned income (think CEOs that get a $1 salary but millions/billions in stock incentives) that would technically put them in the poverty tax bracket. I'm sure some of them even get a tax refund. They obviously don't want us to know this given that the outrage Congress showed when a few of the ultra rich tax returns were leaked was not about how little tax they paid but how abhorrent it was that the information was made public and vowed to prosecute whoever leaked the documents.

    This also doesn't have anything to do with an exit tax or those wishing to denounce their US citizenship to avoid taxes. The US will not let you off the hook that easily if they believe that you are denouncing it for tax purposes. Again, it doesn't really matter to the ultra rich, anyone that invests in the US stock market regardless of citizenship, is going to pay taxes...though I'm sure the rich have found ways around this by taking advantage of some type of tax loss harvesting scheme or by writing of a lot of things as a business expense (which is perfectly legal). Different game. Wish I could play it.
     
  6. SkipJack

    SkipJack DI Senior Member

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    Thanks for pointing out that I did not specify earned income vs investment income.

    It depends on the type of income. "Earned" income is excluded, investment income is not. It does not matter that your "earned" income comes from the US. What matters is where you are when you are earning it. This is why contractors get the exclusion when working overseas.

    From the IRS:
    The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is in New York City.

    https://www.irs.gov/individuals/int...ncome-exclusion-what-is-foreign-earned-income
     
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  7. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    It will in the UK if that is where your assets are located. But if you have moved your money out and let it disappear into thin air then they have the problem of chasing the molecules within the molecules.
     
  8. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    I know that and also I know that some foreign banks will not accept US citizens because of the onerous documentation they have to file.

    But what I was wondering about was the "exit tax" - how do they know if you are going on holiday for 2 weeks or moving out permanently? And is permanent ever permanent for sure? Is it only if you change citizenship? How does it work?
     
    Last edited: Aug 12, 2021
  9. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    It really is appalling that the poor pay taxes and the rich pay people to help them avoid (not evade) taxes. But who forms governments - is it usually the poor or the wealthy? The wealthy ensure the wealthy stay wealthy - they have a vested interest,

    I have a friend who worked as an accountant for a chemical company in the UK during a time when we all (supposedly) suffered a wage freeze. He didn't - his company changed his job TITLE (but exactly the same work and responsibility) and that put him on a higher salary. He also told me he was invited onto a 'remuneration committee' - this involved a group of people (not menials, of course) sitting around for a few hours drinking coffee and then deciding how much salary someone in another company deserved. For this he was paid a fee of about £1000 - his colleagues at work told him he was a mug as they charge nearer £2000! This was about 30 years ago. He also told me they gave a high salary approval for the people they were assessing BECAUSE one day those people might be on a remuneration committee assessing his and other committee members' salaries! In the UK we call it 'you scratch my back..... " (not sure if that is universal or if some countries use a different body part).

    The honest ones usually admit they wish they could be part of that charade - but there are a few who genuinely have such high values they would not accept the opportunities. We used to have a few MPs like that in the UK - as they retired we seem never to have found any new ones of the same type. It was a set of old-fashioned moral values that are now extinct.
     
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  10. Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    In the US the "poor" do not pay income taxes. In most states essential food items do not have a sales tax.
     
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