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Julie Garber

Moving to Avoid Taxes? It's a Global Initiative

By November 6, 2012

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I have written many times about how wealthy Americans change their state of residency to avoid income taxes and/or estate taxes:

But all of that was in relation to state estate taxes and income taxes, not U.S. federal estate taxes and income taxes. Well, on this presidential election day, with the topic of taxing the rich being on the minds of many U.S. voters, it appears that the U.S. federal government is meek and mild mannered on the subject of taxing the wealthy when compared with Europe. With France set to impose a whopping 75% tax on residents who earn more than 1 million euros (about the equivalent of $1.3 million USD), the exodus has begun. For the French, a town called Uccle, an affluent suburb of Brussels, Belgium, and a mere 190 miles away from Paris, has become the relocation place of choice. The town's 8,500 former French residents (approximately 10% of the population) include members of champagne's Taittinger family, and France's richest man, Bernard Arnault, head of the luxury brand company LVMH (which includes Dom Perignon, Louis Vuitton, Bulgari and Tag Heuer) is apparently shopping for a home there. While the top income tax rate in Belgium is a hefty 50%, it still beats 75% back in France.

Meanwhile, in Spain the new government, which had vowed to repeal its wealth tax, has had to back off its promise in the face of rising debt. In Iceland a wealth tax was implemented in 2010, and a "living estate tax" and mansion tax have been proposed in Britain.

So what's in store for wealthy U.S. residents, who are subject to taxes on their worldwide income and an expatriation tax if they give up their citizenship? Definitely not a move to France, or Belgium for that matter.

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