Basically what the HEART Taxation Act means for foreign citizens on greencards is that if we stay longer than 8 years that the USA government wants to tax our unrealised capital gains across our entire net worth, even money you might have earned 10-20 years BEFORE you even moved to the USA :(
I'm sure that the politicians who passed this knew what they were doing but anyone who employs foreign nationals to provide valuable services for their companies may not understand why people are going to be turning down good jobs to leave the USA before they reach the 8 year limit.
This is going to be a major major problem for USA companies and a brain drain on valuable skill sets.
If you are a foreign national holding a greencard what do you think about this?
If you an employer who has green card staff on your payroll what do you think about this and how are you planning to handle staff leaving your company to go back home (or more likely move to more favourable tax jurisdictions).
BTW can you believe the irony that fat slob Charlie "tax cheating" Rangel was the author of this bill that is going to drive expats away from the USA, lol bet you the NY Times never prints the irony of that one.
P.S. A couple of worthwhile links to check out;
Explanation of $651,000 capital gains threshold - https://www.forbes.com/sites/robertwood/2012/12/01/high-cost-to-go-green-giving-up-a-green-card/#532ef010c08c
One of the best explanations of the entire S. 877A IRS Tax code situation from the view of a Canadian giving up USA citizenship (same position applies to most people having to pay Heart Taxation Act "USA Exit Tax") explains the calculations and implications over 9 different articles - http://www.citizenshipsolutions.ca/2015/04/01/renouncing-us-citizenship-how-the-s-877a-exit-tax-may-apply-to-your-canadian-assets-5-parts/
Difference between a “surrendered”, “relinquished”, and “renounced” U.S. citizenship https://1040abroad.com/faq/renouncing-u-s-citizenship/
A post for Aussies reading this;
Basically If you have a house or an apartment in Sydney and a little bit of Aussie super OR usa 401k....pretty easy to get caught up in the $2m limit....then you have to file/payup.....even though you spent 10-20 years working in Australia to create those assets......the USA IRS has wars to pay for so you are going to pay an exit tax on their ENTIRE value and not just the value that they went up while you lived here.
And keep in mind that if you get caught by "any" of the points pretty much anyone working a tech or finance expat job in NY/SF is going to fall foul of the income limts pretty easily.
(for more see - https://www.irs.gov/pub/irs-pdf/i8854.pdf )
"Definition Of Covered Expatriate
If you expatriated on or after June 17, 2008, the new IRC 877A expatriation rules apply to you if any of the following statements apply.
•Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than a specified amount that is adjusted for inflation ($151,000 for 2012, $155,000 for 2013, $157,000 for 2014, and $160,000 for 2015).
•Your net worth is $2 million or more on the date of your expatriation or termination of residency.
•You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency"