America now has officially joined the ranks of Nazi Germany and Stalinist Russia by enacting its first-ever "exit tax." President George W. Bush signed the legislation--passed unanimously last month by both the House and Senate--into law yesterday, June 17.
You must pay the exit tax within 90 days of "expatriation"--giving up your U.S. citizenship or (in some cases) long term residence in the United States. Only a few hundred people do this each year, but Congress didn't like the fact that severing all ties to the United States allows wealthy people to legally avoid all U.S. tax. For my take on the exit tax, click here and here.
The news isn't all bad, though, particularly if you're not wealthy enough to trigger the tax. In that case, you can bypass some of the complexities and hassles of the law the exit tax replaced. If you are wealthy enough to trigger the tax, though, the new law will definitely make life more difficult if you ever decide you want to take the only legal path to permanently end all U.S. tax obligations.