So, it seems there is some fuss at the moment about the flood levy, so I thought I’d whip up a quick graph of how much we’re all going to have to pay to rebuild some bigish bits of Australia. Here it is:
One of my spreadsheet formulas was wrong. I’ve now fixed that.
So, we’re asking someone earning half a million dollars a year to pay around
$2,250 $6,250 more for a single year. That doesn’t sound too bad to me.
To quote from this blog post (its a bit odd that its a PDF, but whatever):
… the new expatriate regime (Exit Tax
Provision) requires expatriates to recognise gain on their assets, and imposes a
new tax on gifts and bequests by expatriates to Americans, This new provision
(styled Section 877A) is an addition to (and not a replacement of) the current
expatriation tax rules of Section 877. Under the Exit Tax Provision, certain
individuals who renounce their U.S. citizenship or U.S. long-term residents
who relinquish their U.S. residence status (collectively covered expatriates)
must recognise gain, or otherwise be taxed, on all their assets on the date they
expatriate. In addition, gifts or bequests they make to U.S. citizens or residents
after expatriation will be subject to tax at onerous estate/gift tax rates.
In other words, if you’re a US resident and you leave the US permanently, then they deem all of your world wide assets sold, and then tax you on the gain. This includes retirement funds, as well as savings. Congress is proposing this as a way of funding tax relief for serving members of the US military.
Its not law yet, but still something I should pay attention to.