For those of you who have U.S. passports (or have permanent residency status AKA “green cards”), leaving the country just became a little more expensive.
We now have an exit tax–new Section 877A of the Internal Revenue Code.
The new law was signed on June 17, 2008. I’ll get a “plain English” explanation shortly. In the meantime, feel free to print off and read the Joint Committee on Taxation’s explanation. (Warning: massive PDF). The discussion you want to read starts on page 36.
The exit tax will raise an estimated $411 million in tax over the next 11 years, they think. (Sorry, the source is in Tax Notes Today, locked inside Lexis-Nexis. 2008 TNT 118-2 is the cite, if you want it. I couldn’t find the source of the estimate, which apparently was a Baucus/Grassley press release).
Comment #1: good luck with that.
Comment #2: peanuts, really.
The exit tax rules (new Internal Revenue Code Section 877A) are buried in a special law aimed at giving tax relief to people serving in the Armed Services.
Comment: this is a classic example of “for the children” politics.