Chinese rich people want to "escape" from the United States, and they feel like crying when they talk about their American identity

Chinese rich people want to "escape" from the United States, and they feel like crying when they talk about their American identity. Article source: Huasheng Online on 2013-02-07 20:50:45…

In China, it is popular that "buying an apartment in Beijing's Third Ring Road can catch up with buying a villa in New York", but no one tells them that they have to pay transaction tax when buying a house in the United States, as well as valuation tax and municipal construction tax every year. When they sell the house, there is also asset income tax waiting for them.

>Ms. Wu’s story is not an isolated one. For some wealthy Chinese, American citizenship has now become a besieged city. People outside want to get in, but people inside want to get out. This was almost unimaginable ten years ago, when immigrating to the United States was still the ultimate dream of many wealthy Chinese. But now, the situation is very different.

The biggest deciding factor behind this change is tax. "Every dollar you save ends up in the hands of the tax office." Tax lawyer Matthew Dvina said, "This is one of the reasons why people give up their U.S. citizenship."

"Only death and taxes are inevitable." Franklin's famous saying well describes the United States as a "land of ten thousand taxes." In the United States, in addition to federal taxes, states also charge a wide variety of taxes on their own. For example, New York State once levied taxes. In addition to many types of taxes, the more important point is that the United States collects taxes in accordance with the "Person Principle". Even foreign citizens who have lived in the United States for more than a certain time must pay taxes to the U.S. government.

Of course, there are objective difficulties in auditing overseas accounts, so during the US economic boom, the government turned a blind eye to tax evasion in overseas accounts. However, after 2008, the economic recession was accompanied by the financial crisis, and the U.S. government deficit increased year by year. Paying close attention to taxation became a major issue during Obama's term.

In March 2010, Obama signed the "Foreign Account Taxation Act" with the goal of preventing U.S. citizens and permanent residents holding green cards from abusing offshore tax avoidance. Because it may have a significant impact on investors around the world, its implementation was later postponed for one year. In December 2011, the details of the Foreign Account Tax Act were finally announced, which stipulated that U.S. citizens living in the United States and owning more than $50,000 in assets abroad, or living outside the United States and owning more than $200,000 in assets overseas, and foreigners holding U.S. green cards need to declare to the government before April 15, 2012.

The penalties are also quite severe: hiding overseas assets and refusing to declare them is regarded as intentional tax evasion, and if found out, a fine of US$10,000 will be imposed. If you still fail to pay relevant taxes and fees after successive notices from the IRS, the maximum fine can reach $50,000. If someone deliberately underreports and is found out, a heavy fine of 40% will be imposed on the underreported amount, and the person concerned may also face criminal prosecution. As soon as the bill came out, people were panicked, and the Chinese people reacted the most. One theory is that the Chinese people love saving the most, and this law targets the Chinese people; another theory points out that in mainland China, the cost of tax evasion is very low, and it is almost impossible for the new wealthy people who open companies in China to obtain investment immigration capital to provide "net" tax records, so this will become a crime in front of the strict US Internal Revenue Service.

In order to strengthen the investigation of illegal tax evasion, the US Internal Revenue Service opened an additional investigation office in Beijing in 2010 and added manpower to eight existing investigation offices including Hong Kong. At the same time, they also hired a large number of Chinese tax inspectors. According to the American "Qiao Bao" report, these Chinese-speaking tax inspectors are more stringent in tax inspections than tax inspectors of other ethnic groups.

More and more wealthy people are choosing to flee the United States. Ironically, because the U.S. tax system is so detailed, even if you give up your U.S. citizenship, you still need to pay a "departure tax."

But new Chinese immigrants have a simpler way. Although China does not allow dual nationality, Ms. Wu, who has American nationality mentioned in the article, is not worried about losing her Chinese nationality because "it is quite common in China to have two passports."

Today, Ms. Wu’s life and work are concentrated in Hong Kong and the Mainland. She has no acquaintances in the United States. She said she has never owned real estate or any assets there. She has not been to the United States for nearly ten years. Wu never used her U.S. passport to travel anywhere and vowed to keep all traces of her earnings hidden. At one point, she even refused to sign a written contract with a potential business partner, fearing that it would leave a mark that would lead to the IRS tracking her.