Avoiding Taxes

[Name of the Instructor]

Avoiding Taxes

Introduction

In countries like United States of America government has defined two different tax policies for the permanent citizens, immigrants and people having citizenship of more than one country. The difference in the amounts of taxes for different citizens enables them to adopt ways in order to avoid as much tax payment as possible. If the government had designed a similar policy for every citizen in the country then nobody would adopt ways in order to gain advantage of tax evasion. United States of America is one of those countries that collects a huge amount of taxes and use these taxes in order to provide their citizens with the basic necessities of life and a proper infrastructure. The assignment will analyze the effects of renouncing citizenship on tax liability, effect of dual citizenship on tax liability, then compare both the effects and suggest other ways to reduce the tax liability on a citizen.

Discussion

There are different ways used by the citizens of America to lower the burden of tax payments. The financial crisis in the world and the increase in budget deficit have enabled the government to reduce it through increasing the amounts of taxes so that government revenues can increase. The ways that are adopted includes renouncement of the US citizenship and establishing dual nationality which means declaring the person belonging to the two countries in the world. According to Rubino (2012) currently US are facing the difficulty of renouncement of the US citizenship and these citizens are trying to get the citizenship of any other country. However it is not easy to take the decision of renouncement because once you have renounced your US citizenship the person will not be able to get the citizenship back. There are different effects of renouncing US citizenship that will ...