If you're one of those Americans considering a move to another country, there's lots to ponder. First, there is a lot of information about cost of living, jobs, and culture for a variety of destinations over at the ExpatForum -- here you can read about living in Australia or Malaysia or elsewhere, and there are lots of forums set up so you can communicate directly with expatriates who are already living in your target location. Other informative sites are Expat Exchange and Expat Essentials.
It's fun and exciting to surf through these sites, and ponder your new, simple life in a beautiful, tranquil, and inexpensive location. However, there's a lot of investigation to be done.
You're considering a new daily life, not an extended vacation. For instance:
1. Consider Taxation - How Much Will You Have to Pay Now and in the Near Future?
There's some reporting that expats will be facing increasing taxation in the future. The National reports (12/29/08):
The United States is not most countries, however. Citizens living abroad must continue to file returns and pay tax on their worldwide income, although the first US$82,400 (Dh302,655) in foreign employment or business earnings is excluded, plus a bit more, sometimes, for housing expenses.
With one hand in their wallet already, are Americans more at risk of a tax hike than other expats? Could they be asked to pay more?
“It would be a fairly easy to thing to do,” said Patrick Stevens, a tax partner in London for Ernst & Young. “All they would have to do is reduce or wipe out the excluded amount.”
He is not betting on it, but something that produced the same result occurred just two years ago. While the earned-income exclusion was raised from $80,000, tinkering in the formula for the housing allowance led to sharp increases in tax liability for some overseas Americans.
J.D. Foster, a researcher in tax and entitlement policy at the Heritage Foundation, a Washington think tank, does not expect any similar move – yet. His somewhat paradoxical reasoning is that the US treasury needs too much revenue.
“I don’t think it’s all that probable simply because deficits will be so large for the next couple of years and the amounts raised would be so small that it’s not worth it,” he explained. He warned, though, that it may become worth it later.
“There’s a legitimate concern for two or three years from now,” Mr. Foster said, “as Obama will have to demonstrate to the markets that after these unprecedented deficits he’s concerned about fiscal discipline.”
2. Consider Crime - Kidnapping of Americans Is a Risk in Some Areas
Kidnapping Americans for ransom is considered a business enterprise in some parts of the world, and while this may be more of a risk for the overseas American businessman and his family, it's a risk to be considered by retirees and other "rich Americans" in many regions.