From: "E. ALLEN SMITH" <EALLENSMITH@ocelot.Rutgers.EDU>
Date: Mon, 29 Apr 1996 16:06:04 +0800
To: cypherpunks@toad.com
Subject: Nando.net on expatriate tax issue
Message-ID: <01I43CGVYKGW8Y53DN@mbcl.rutgers.edu>
MIME-Version: 1.0
Content-Type: text/plain


	Of course, the mainstream media is failing to question why such taxes
should be in existence at all.
	-Allen

>Billionaires' tax loophole could complicate passage of health reform
>---------------------------------------------------------------------------
>Copyright 1996 Nando.net
>Copyright 1996 The Associated Press

>WASHINGTON (Apr 28, 1996 1:47 p.m. EDT) -- A once white-hot, but still
>smoldering, partisan dispute over taxation of expatriate billionaires could
>further complicate enactment of a popular measure making health insurance
>portable from job to job.

[...]

>But an effort to plug a loophole that's allowed a handful of wealthy people
>to avoid taxes by renouncing their citizenship could put another hurdle
>before a health bill all sides say they want.

>Competing expatriate billionaire provisions are tucked into separate health
>bills that cleared the Senate last week and the House in March.

>In an approach recommended by the Clinton administration, the Senate would
>impose an immediate capital gains tax on the assets of wealthy people when
>they renounce their citizenship.

>However, the House bill, crafted by Ways and Means Chairman Bill Archer,
>R-Texas, takes an entirely different approach that Democrats and the
>administration say leaves the loophole wide open.

>House and Senate lawmakers haven't met yet to work out the differences
>between the two health bills. But if past negotiations on the expatriation
>issue are any indication, the House version will emerge victorious.

[...]

>Instead of imposing a large and immediate tax on wealthy citizenship
>renouncers, the House version tightens current law. It requires expatriates
>with a net worth of $500,000 or more to pay taxes on capital gains and
>other income from U.S.-based assets for 10 years after they renounce their
>citizenship.

>But critics say it will accomplish little more than forcing accountants and
>lawyers to find more creative ways around the rules on behalf of
>billionaire citizenship renouncers such as Campbell soup fortune heir John
>Dorrance III and Dart Container Corp. President Kenneth Dart.

>The House version would be extremely difficult to enforce and would allow
>patient expatriates to avoid the tax by holding their assets for 10 years
>before selling, they say. In the interim, they could raise cash by
>borrowing against the assets.

[...]

>However, Archer says his committee's version is actually tougher. The
>administration's proposal would create an incentive for people who had
>recently inherited their wealth to expatriate before their newly acquired
>assets started to appreciate, he said.

>"The reality is their proposal is weaker than ours," Archer said. "Some of
>the most egregious cases are where there have been heirs that have been
>recipients of estates who can under their proposal leave and never pay
>anything."