Why expats are ditching their U.S. passports

Americans are leaving USA in droves, tax exiles or not.

The most famed case was Eduardo Saverin, Facebook founder, who cashed US$4B when the company became public in May 2013 and left for Singapore.

The most disturbing one was the woman who had lived abroad for decades married to a non US citizen, and because they had a joint bank account she had to claim his income on her US income taxes. And their dual citizen kid was now subject to US taxes as well.

There is just nothing like this kind of pocket picking anywhere else in the world.

We're #1! We're #1!
USA! USA!

gardener1 wrote:

The most disturbing one was the woman who had lived abroad for decades married to a non US citizen, and because they had a joint bank account she had to claim his income on her US income taxes. And their dual citizen kid was now subject to US taxes as well.

There is just nothing like this kind of pocket picking anywhere else in the world.

We're #1! We're #1!
USA! USA!

Everything is possible in ... USA. 

Hello folks and it's interesting reading on some of your tax opinions. Unfortunately, everyone I've read is not accurate and frankly disturbing that so many opinions have been posted without anyone doing some serious due diligence on taxation outside the states.
Lets' look at 3- 4 alternate situations
1st Canada, has anyone attempted to use Canadian medical processes? If not maybe you need to speak with some of them paying in almost 51% of their pay checks to cover the costs of single payment medicine and a list of other free govt. programs. Free? 51%? You still think so? By the way task these same people you may speak with this question, if you need a major procedure say maybe a knee replacement ask them what their wait times are  for this fairly routine procedure? How does 3-6 months wait time sound. I've had both replaced with private insurance groups and waiting 3-6 months with this pain I assure you is the reason so many folks get into trouble with prescription meds,
OK how about Europe? Canada looks and sounds good after using the medical process in Ireland then again in Spain.By the way anyone notice that France recently began taxing people with income over $1m annually at 75% levels.
Look at the Scandinavian tax structures where everything is available through govt programs, taxes taken run somewhere between 45 & 65%.
Asia, you may as well die because medicine is for the rich in almost all of Asia.
Look all I am saying is if you're going to throw the USA's tax structure under the bus at least know from doing your homework what others are paying and suffering through elsewhere. I like most feel the tax codes need  a major overhaul but as they say, be careful what you ask for, you may get it!
The global debt is now in excess of $100 trillion dollars tht includes America's $17 trillion so where sthe otehr $83 trillion being spent? Homework and reading can be very eye opening and when it's said and done America's is in neeed of a fix but damn by comparisons it's expensive but still the best. I bet most of these seething comments come from folks who paid in when they were in their 20,s 30,s 40,s and so on, honestly what was your pay rate in those days? $50-$150 bucks a week and what was tour contribution to medicare $20-30 bucks?.  For many less. Do you really think what you're taking out vs what you paid in is fair? Lets not forget that life expectancy is now over 78 years. I attribute this to it being to easy for all of us to go to the doctor on the govt's dime for questionable visits. Want to bring down costs and doctors padding their bills, give all of us a maximum allowance of 4 visits annually. The only exceptions would be emergency visits that must be monitored and scrutinized for it being needed. If not and it's found to be an attempt to screw the system as usual then charge back the abusers for those dubious visits. Ditto for medicines asked for or prescribed for questionable ailments. In other words those who paid in $500-1200 bucks a year into Medicare or whatever it may have been called need to pay more for today's medical costs. ALL OF US INCLUDING ME who I assure you paid in well over $4,500 dollars annually for 25 years into Medicare. ENTITLEMENTS NEED TO BE REIGNED IN, no more free lunches, we simply can not afford anymore abuses and attitudes that it is owed us.

timo31750 wrote:

...... no more free lunches, we simply can not afford anymore abuses and attitudes that it is owed us.

Hi Timo,

1). Thanks for your input.  There is nothing I did not know already.

2). There is constant news of Americans giving up their citizenship to extricate themselves from the intricacies of the 9,000-page IRS tax code.  They are expats who want to start a new life without any shadows from the past.
While they give up their passports, people from many other countries flock to North American shores for what they believe will be a better life for them and families.
The question (which will probably remain unanswered here) is whether the taxable income of those who left USA is the same with what the taxable income of new comers to USA will be.

3). Yes, like you said, there are higher taxes and other more or less hidden costs in many other countries, but such countries are not in the news as often as Uncle Sam's shenanigans.
One notorious case was Swedish tennis great Björn Borg who retired to tax haven Monte Carlo in the 1980's to escape predatory Swedish high tax rates.

4). You mentioned free lunches came to an end.  When exactly was there a really healthy free lunch anywhere?  I need to know so I could regret having missed it. 

5). I was a USA admirer for the first 38 years of my life, but one evening in 1990 I realized the globe has 200+ countries and most of them are English-speaking ones.
There is more freedom in the Cape Verde islands than in North America although the islanders are not always in the news promoting their freedoms … 

In 2013 the US tax code was 73,954 pages.

It has nearly doubled in size in the last twenty years.

This website has an illuminating illustration of the current tax code size.

http://finance.townhall.com/columnists/ … 3-n1514277

John C. wrote:

Americans are leaving USA in droves, tax exiles or not.

The most famed case was Eduardo Saverin, Facebook founder, who cashed US$4B when the company became public in May 2013 and left for Singapore.

The most expensive city in the world in which to live

3,000 renouncing citizenship is nothing in a country of 300,000,000 people.  Swearing in of new citizens is quite more than 3,000/year.

mugtech wrote:

3,000 renouncing citizenship is nothing in a country of 300,000,000 people.  Swearing in of new citizens is quite more than 3,000/year.

I think you are on to something, MugTech

Source: US Department of Homeland Security, Office of Immigration Statistics: all immigrants entering the USA:    1,031,631 people in 2012

Between 1986 -2012 243,217 Ecuadorians immigrated to the US (no report if it was legally and illegally)

According to the Pew Research  in 2012 nine-in-ten (93%) Hispanic immigrants who are not citizens said they would like to become a U.S. citizen. This was true both for those who are legal permanent residents (96%) and for those who aren't (92%).

In 2011, the only stats that I found on Google, numbers from the administrative records of U.S. Citizenship and Immigration Services (USCIS) of the Department of Homeland Security.  The total number of persons over 18 naturalizing as US citizens was 694,193.

Mike

3,000 might be a small number, but  looking over the last few years the increase of people renouncing citizenship is pretty large compared to what it typically averaged per year. Think it was well up over a 200% increase for 2013. You have a 100% - 200% increase for the next 5-10 years then the numbers start getting pretty significant, Granted that's a Big If, and probably unlikely. Not having the numbers, my question would be who are the ones that are leaving, and who are the ones that are coming? If the ones leaving are business owners, and people fairly well off who have put into the system over the course of their lives, and the people coming in are taking out more than putting in then there is going to be problems. Again don't know who is leaving, but am inclined to think it's probably a fair percent who have generated many jobs, and income, that aren't a drain on society.

j600rr:  BINGO!

I'm sure at least many times 3,000 people a year just fall off the grid and decide they're done messing with tax returns, have no ties to the U.S. and are content to live out their days on this Earth not worrying about U.S. citizenship, IRS, etc.  Their logic is they make too little and have too little for anyone to worry about.

The 3,000 people a year that do formally renounce their citizenship, as a group, are very likely people that historically produced substantial income and paid significant taxes (and certainly a lot more than 90% of Americans and the new immigrants to the U.S.).  Social Security is a rounding error to them and although small in number, the tax loss is more material.  It still has a long way to go before it becomes a concern, in my opinion, to elected officials trying to preserve their worldwide income tax system.

Remember reading an article about 2 years ago. Basic synopsis was the U.S. was giving scholarships to overseas kids, or young adults. The individuals came, and studied here at some of the top Universities. A large percentage of those individuals wanted to stay in the U.S., and start their own businesses, but thanks to red tape were unable to get a visa permitting them to stay, and consequently went back to their home country to start a business, and bring their level of expertise. Now, we're paying for top class educations for non U.S. citizens, and when they want to stay, and try and build a business, and or work in their field, and be a net asset we deny them. Tell me the logic?

I noticed that the young people who wish to come to USA have absolutely no idea what is going on in the country... for sure 3000 people is nothing.. a tiny number...  and some are wealthy and others are ordinary and fed up with the system and the fact that no matter what it seems no changes are taking place except heavy duty military equipment handed over to police departments across the country ... what a change .. haha  (sarcastic laughter)

Strange with all the talk from expats about dropping one's US citizenship because they're pissed about being required to continue to file income taxes back in the USA that it appears they haven't noticed that the hefty EXIT TAX that the IRS imposes on people doing so makes it a prohibitive process for all but the richest citizens.

Taxes must be paid on ALL one's assets, including their home, investments, businesses, savings, automobiles as if they had all been sold on the day before renouncing (at current market value). Anyone worth more than $2 million is affected by this tax. Given the price of real estate in the USA nowadays, if you have to count up every penny of your worth, it's not too difficult for the average middle-class or upper middle-class Joe to fall into that bracket.

Also, dropping one's citizenship is no guarantee that your assets still aren't going to be subject to US taxes. For example, if you've renounced your citizenship, paid the wopping Exit Tax and therefore are no longer paying US taxes and, upon death, leave assets to your children or other relatives who still live in the US there would be levies just like estate taxes they'd be required to pay.

See the following article from Bloomberg:

http://www.bloomberg.com/news/2013-02-2 … -exit.html

mugtech wrote:

3,000 renouncing citizenship is nothing in a country of 300,000,000 people.  Swearing in of new citizens is quite more than 3,000/year.

You aren't impressed with this tidal wave involving almost 0.001% of your fellow citizens?

I don't know where the figure of 3,000 US citizens renouncing per year comes from but Bloomberg shows the figures as much lower than that. According to them there were 932 who renounced in 2012, 1781 in 2011 and 742 in 2009. A pretty big difference in the doomsday figures that gardner1 thows out there. Wonder where that's coming from?

wjwoodward wrote:

I don't know where the figure of 3,000 US citizens renouncing per year comes from but Bloomberg shows the figures as much lower than that. According to them there were 932 who renounced in 2012, 1781 in 2011 and 742 in 2009. A pretty big difference in the doomsday figures that gardner1 thows out there. Wonder where that's coming from?

The number on Bloomberg or some other news line was 2,999.  I rounded up

Probably over 3,000 for 2014 as more tax cheats feel the tightening of the regs and more countries signing up
through treaties to report on foreign accounts to the IRS..

NPR says 3000 in this article, citing a tax blog as their source. Whether it's 3000 or some lesser number, it's infinitesimal relative to the total US population, or to the numbers of immigrants to the US.

Does anyone have any solid figures on the amount of jobs, and money being lost by people who either renounce citizenship, or basically just drop off the grid, close businesses, and live a quiet life either in U.S. or abroad? Conversely does anyone have any solid figures of how much job creation, and wealth is produced by new immigrants every year?

Am not placing judgement one way or the other, but you can throw all kinds of numbers out on people leaving, as opposed to people coming. Bottom line is pretty simple. Are more jobs and money leaving, than there are jobs, and money being created each year, or is it the opposite?

Ok, but that's not the way it was stated in the original posting... what was said was 3000 each year which is incorrect. That is an estimated figure for 2014, the past years figures have been from marginally over 1000 to 500 for at least a decade. Really it's a drop in the bucket (0.00001%) compared to the total US population and annual population growth due to immigration. It also misses the point that it's an extremely expensive option for all but the wealthiest Americans. For anyone else it's like cutting off your nose to spite your face, as the old saying goes. Really, would you be willing to pay an astronomically high Exit Tax not to mention the many other benefits that US citizenship offers you, just because you're POd about having to continue to file a Form 1040 even though you've left the US? Doesn't sound like sound reasoning to me!

The 3,000 number is correct.

http://www.forbes.com/sites/robertwood/ … a-express/

The exit tax is based on appreciated value only (e.g., capital gains net of losses) with a floor (exemption) of $668,000. It is not punitive, but also not insignificant for the very wealthy with lots of unrealized gains, but well worth it for rich folks having years of future investment and business income and expected to face estate taxes.  Believe me, they carry more money in their pockets than Social Security would pay and would still lose most of their SS benefits to taxes anyway.  You're way underestimating the tax burden.

Hi all,

We have removed some posts going off topic for info.
We would like to stress again that opinions are welcome but not personal attacks.

Thanks
Armand
Expat.com Team

Good, back on track at least for awhile.

Unless you're living in your own little world it's pretty obvious the U.S. currently has many problems.

Since there is a fair amount of older Americans on this site, or older than me (38) I wanted to ask about a certain time period of the U.S. Basically the Carter administration, and then 1980-82. Now remember, I wasn't born until 1975, so was pretty young during this time frame, and not really conscious of what was happening.

If these numbers are off feel free to correct, but here is a recent quote I found.

"Suffice it to say, the Carter years were very bad for our nation. 16 percent inflation, 22 percent interest rates, and 70 percent marginal tax rates."

Also lets throw in there the gas siphoning, and Iran crisis. I asked my father awhile back how he compared that time frame to current time frame, and he was under the thought that things were much worse at that time as compared to now.

Also throw 1980-82  time frame because of the S&L crisis which had a pretty negative impact on the economy if I recall correctly.

What are some of the thoughts of people who were older, and remember this time frame, and other time frames as well? Only bring it up because when looking through different U.S. time frames I see a picture of booms, and busts. Large intrusive government control with high taxes, and conversely times with less intrusive governments, lower  taxes, and more personal freedoms. My thought is, even though there are currently many problems facing the U.S. that during the course of U.S. evolution there have been a multitude of time frames in which times were much harder, and more difficult than than are today.

mugtech wrote:

...as more tax cheats...more countries signing up through treaties to report on foreign accounts to the IRS

So I'm nothing more than a "tax cheat" because I feel it unfair to pay taxes on income earned outside the US when I am not a resident of the US... one of the ONLY TWO countries (the other being Eritrea) in the world to have such tax law? http://en.wikipedia.org/wiki/International_taxation. Screw you.

"more countries signing up"... just how many countries would that be? 50? 100? 150? How about 24 (Bermuda, Canada. Cayman Islands, Chile. Costa Rica, Denmark, Finland, France, Germany, Guernsey, Hungary, Ireland, Isle of Man, Italy, Japan, Jersey, Malta, Mauritius, Mexico, Netherlands, Norway, Spain, Switzerland, United Kingdom). Wow, the world is just caving to the US. http://en.wikipedia.org/wiki/Foreign_Ac … liance_Act

I thought the point of the post was that it is happening and that the trend is growing. Just for the record the 3,000 number was for 2013. Here is a chart showing the renouncements since 1998 (http://thesovereigninvestor.com/wp-cont … hart-2.jpg). It's not the number, but the rate of growth of the number that is interesting.

The rate of growth is meaningless, not going to double every year for 20 years.
Not following tax laws = tax cheat, no matter how unfair you think the law is.
At the current rate of countries signing up, the whole world will be in the deal in a few years.  Its not how many or who they are, but the fact that it will snowball.  So Russia won't sign, who cares?
Renouncing citizenship is happening and it is growing, but the numbers are a drop in the bucket.

mugtech wrote:

The rate of growth is meaningless, not going to double every year for 20 years.
Not following tax laws = tax cheat, no matter how unfair you think the law is.
At the current rate of countries signing up, the whole world will be in the deal in a few years.  Its not how many or who they are, but the fact that it will snowball.  So Russia won't sign, who cares?
Renouncing citizenship is happening and it is growing, but the numbers are a drop in the bucket.

Do you even read some of the drivel you post? Not one post in this thread has contained any comment, or advocated, to not follow the law. You implied that those renouncing were doing so because they are "tax cheats". Pretty broad brush with which you use to paint.

Then you go on to state that the "rate" at which countries are signing up is indicative of something, but the rate of change in renouncements doesn't mean anything. Either rate of change is meaningful, or it isn't. You can't have it both ways.

Oh, and what is the rate of change in the countries signing up? The rate for 2014 is consistent with that of 2013, not increasing (I mean "snowballing"). In addition, at the current rate (approximately 1.4 countries per month), in a "few years", as you state means there must only be 68 countries in the "whole world". Hmm, the US Department of State recognizes 194 countries... 68 vs., 194. You must be using an old globe :-)

The rate of change is the only number that has meaning for either of the above items, but to try to then use rate of change for one argument and discount its meaningfulness in another is just... well sir I can only say that you must have spent time as a statistician to make statements as such :-D

So when are you renouncing your citizenship?

Ditching one's US citizenship for tax purposes may be advantageous for the super-wealthy, but for the average Joe is seems about as smart as shooting yourself in the foot.

When you consider all the other advantages that US citizenship brings with it, one of which is that passport that is in 2nd place in the Henley & Partners Visa Restriction Index which ranks passports regarding the hassle-free access they allow to other nations.

Ironic indeed that there would be so much buzz about this subject in Ecuador. Really, what sense does it make to give up a passport that offers you access to 172 other nations without any headaches, especially if you have to trade it for an Ecuador passport which only gives you the same benefit in 74 other countries and is ranked in 54th place? I guess none of you guys that are in favor of renouncing plan to travel, or you've already got one of the three 1st place ranked passports??? I can tell you that I wouldn't trade in my 4th place Canadian passport unless it were for a passport in first, second or third place - just makes no sense whatsoever.

Oh and regarding taxes; well Canada taxes based on residency and not citizenship like the US, but that doesn't exempt Canadian sourced income from tax. Quite to the contrary, if you're a "Deemed Non-Resident" there is a 25% (non-refundable) withholding tax on every penny you earn. You don't get off the hook so easily as in the USA where you renounce your citizenship. Canada also requires all taxpayers to declare worldwide income and has done so for many years. If you live in a country that has a Tax Treaty with Canada then that's fine, if not it's a whole different story.

I can see the issue of double taxation being a significant problem in some countries, but I think that at least from what I see on the Ecuador Forum it's more a case of sour grapes or whining about not being able to escape income taxes altogether. Ditch your US citizenship and US passports if you want, that's your choice and your right. Just remember as I tried to point out in my first reply on this thread - IT COMES WITH A PRICE. Don't cry when you find out later just what that price tag is.

Are you guys all really earning THAT MUCH there in Ecuador? GDP must be fantastic there, eh?

Henley & Partners Visa Restriction Index:  https://www.henleyglobal.com/files/down … 13_Web.pdf

mugtech wrote:

So when are you renouncing your citizenship?

I never said I was renouncing. Noone in this thread has said they're renouncing. You are the one in this thread that seems intent on making all the noise and accusations regarding tax cheats and that being the reason for renouncment. A one equals the other sort of thing. Weird, I never looked upon Grace Kelly as a tax cheat

In fact I just finished our taxes and submitted them last week. I simply made a comment that the taxation of foreign earned income of non-resident citizens is unfair and only practiced by two countries in the world.

I made two observations about rate of growth and for those three things you decide to lable me a tax cheat.

As wjwoodward points in his post it would be a bit silly. But again this thread wasn't about citizenship, it was about the number of people that are renouncing it.

We expats don't live in a vacuum, so why do so many seem to think of tax issues in a vacuum?

Giving up one's citizenship also means giving up many other things associated with it that for the most part get taken for granted.

Expats, wherever they may be, are subject to local laws. This is something that is of paramount importance in Latin American countries for a multitude of reasons. While many are so-called democracies they aren't true democracies as we would define the term, not by a long shot. Latin American countries and their leftist leaning governments have never really had political stability. Almost without exception they have all had their turn at bat with dictatorships and military regimes and Ecuador is no exception. Ecuador suffered under a military regime as recently as the period between 1972 - 1979. None of the so-called democratic Latin American nations have really proven themselves to be little more than dictatorships in disguise. Government, judicial and police corruption still abound in most of them.

With a corrupt judicial system and corrupt police how in the world can any expat consider themselves to be safe from wrongful or even unlawful prosecution? Latin American prisons are far from being what you would consider resort destinations by any yardstick you care to use. As expats, at least we have the assurance that the authorities in our home country will do everything in their power to help us or at least ensure that we receive fair trials and treatment should, God forbid, we run afoul of local laws. Many countries will even attempt to have us repatriated to serve sentences back home should we be convicted of some crime. When you give up your US citizenship for tax reasons, you are also giving up the very real and substantial protection that you can count on receiving from the US State Department in these kind of situations. You're no longer a citizen so you can't say they've washed their hands of you - you've washed your hands of them! You get treated just like any citizen of Ecuador and that clearly may not be to your advantage at all.

Just look at the situation unfolding in Venezuela! US Expats there at least have the secure knowledge that if it really hits the fan there, the US government can and will take steps to get them out safely. God help any former US citizens there who've renounced for tax reasons. They're Venezuelans in the eyes of the US State Department and as such S.O.L on this protection.

Tensions are brewing in many Latin American countries, political corruption, soaring crime rates, social injustice and other issues are reaching a boiling point in many of these nations. Even Brazil, South America's largest, richest and most powerful nation isn't immune. Social unrest on a wide spread scale could break out at any time especially given the public outrage over gross overspending on the upcoming World Cup just months away now, overspending that has robbed the average Brazilian of many basic services and to date has produced little in the way of results. Over the next few months there is an ever increasing chance of riots, civil unrest and the like that will put all expats at risk. US citizens here can at least count on some protection from the US State Department.

Nobody likes paying taxes, I know I sure don't. Unfortunately taxes are a necessary evil wherever we may be and however they may be imposed. Giving up your US citizenship is NOT a step to be taken lightly, nor is it a step to be taken without pondering over ALL of the considerable ramifications involved. Anyone who implies that renouncing is the "magic bullet" a cure-all for your tax probems is either an absolute fool or just a flat out liar. There are just too many other factors to consider than taxes. It doesn't matter whether 3000 people or 10000 per year are doing it; it doesn't make it right for all of them, nor does it make doing so a smart move.

As far as I know, only lemmings jump off a cliff to their certain demise just because everybody else is doing it!

The first $97,600 of foreign earned income is excluded from taxable income in 2013.  So if you are single, under age 65, and take the standard deduction, the first $107,600 of earnings are not taxed.  Wonder how many expats in Ecuador are earning more than that and actually paying taxes.
You are a tax cheat only if you break the law to not pay taxes.
No thought police quite yet.

Right on mugtech, like I say... really renouncing citizenship is of absolutely of no benefit whatsoever to the average Joe. I can't see any valid reason that somebody earning over R107,600 a year SHOULDN'T pay their fair share of taxes, especially if they've had a long worklife in the USA with all the benefits of living there. Do they ever stop to think that if those that came before them had the same "me first" attitude in life as they do, they probably wouldn't have had half of those perks back home? They don't breathe a word when they're on the receiving end of the bargain, but when it comes time to pay up, give back to society a little bit of the benefits that their predecessors contributed to their benefit, they all start wimpering like little babies and crying foul! Kind of difficult to feel sorry for somebody with that kind of attitude.

Check out the article on Gringo Tree about 2 couples denied return to Ecuador by the IRS.

mugtech wrote:

The first $97,600 of foreign earned income is excluded from taxable income in 2013.  So if you are single, under age 65, and take the standard deduction, the first $107,600 of earnings are not taxed.  Wonder how many expats in Ecuador are earning more than that and actually paying taxes.
You are a tax cheat only if you break the law to not pay taxes.
No thought police quite yet.

mugtech, you might want to check the definition of earned income. It does not include investment income, which I would guess would be more realistic of the hypothetical you describe. I have no intentions of having any "earned" income. My income is totally "investment" income. The $92K exclusion does not apply to me, or more specifically to investment income.

I am certainly in agreement that if one breaks the tax law and fails to pay what's due, one should be considered a "tax cheat". I was only stating that renounciation of citizenship and cheating on taxes do not have a cause and effect relationship. Probably plenty of folks that live IN the good old USA cheat on their taxes also, but again no cause and effect relationship. Breaking the law is breaking the law, regardless of where you live, or of what country you're a citizen of.

The investor class can also manipulate the tax code to pay no or very little income taxes.
If your only income is from investments, and all of your income is either qualified dividends, long term capital gains and tax exempt bonds, then a single person under age 65 who takes the standard deduction, does not pay any income tax on the first $46,000 of long term capital gains and qualified dividends, plus as much tax exempt bonds as you like.  A couple filing joint returns in 2013 would pay $375 in income taxes if they had $95,000 in qualified dividends and long term capital gains.  The single one would pay $7313 on that same $95,000 of income, making a mate worth almost $7,000 in tax savings.
This is not just theory, I know investors who make about $200,000, and with itemized deductions and tax favored income pay less than $10,000 in taxes, an effective rate of less than 5%.  You just have to set it up right from the start.

mugtech wrote:

The investor class can also manipulate the tax code to pay no or very little income taxes.
If your only income is from investments, and all of your income is either qualified dividends, long term capital gains and tax exempt bonds, then a single person under age 65 who takes the standard deduction, does not pay any income tax on the first $46,000 of long term capital gains and qualified dividends, plus as much tax exempt bonds as you like.  A couple filing joint returns in 2013 would pay $375 in income taxes if they had $95,000 in qualified dividends and long term capital gains.  The single one would pay $7313 on that same $95,000 of income, making a mate worth almost $7,000 in tax savings.
This is not just theory, I know investors who make about $200,000, and with itemized deductions and tax favored income pay less than $10,000 in taxes, an effective rate of less than 5%.  You just have to set it up right from the start.

Um... guess that's why last year I was at 8.5%, now I minpulate the tax code? No matter, I have grown bored with this thread about "Why expats are ditching their US passports", since it is now completely off topic and like talking to a brick. Thanks for playing, you'll receive lovely parting gifts at the door.

rsymington wrote:

Um... guess that's why last year I was at 8.5%, now I minpulate the tax code? No matter, I have grown bored with this thread about "Why expats are ditching their US passports", since it is now completely off topic and like talking to a brick. Thanks for playing, you'll receive lovely parting gifts at the door.

Perhaps manipulate has bad connotations, but you made the point that paying 8.5% of your income as taxes is not a great hardship, you can follow the laws and pay little tax.  Of course complaining is free.