Bruce Bartlett, the Denethor of small government fans, says that the spike in expatriations isn’t due to rich folks fleeing the country. (via the TaxProf) That’s certainly true. Why are they leaving? His take:
The reality is that taxes are just one factor among many that determine where people choose to live. Factors including climate, proximity to those in similar businesses and the availability of amenities like the arts and cuisine play a much larger role.
He hasn’t been paying attention. Tax Update readers and followers of the excellent work of Jack Townsend and Phil Hodgen know that the problem is not high tax rates. It’s the IRS enforcement approach of shooting jaywalkers. It’s the severe financial penalties for trivial paperwork violations and the high cost of complying with the ever more severe offshore reporting requirements for citizens abroad. If you have permanently moved abroad, or if you are an “accidental” citizen — say, a Canadian born in the U.S. while your parents were attending school here — you tire of being treated like a criminal for failing to file paperwork that you had never heard of.
More from Peter Pappas.
