A law President Bush signed in the runup to Independence Day had a patriotic ring to it: Tax breaks for U.S. troops and veterans, paid for by socking it to rich Americans who renounce their citizenship to sidestep the I.R.S.

But the Heroes Earnings Assistance and Relief Tax Act, known as the Heart Act for short, will also ensnare a less sinister population than American tax dodgers: well-to-do Canadians, Britons, Indians, and other foreign residents concluding long-term assignments in the U.S.

When these foreign bankers, software engineers, chemists, and others leave the country—if only to retire or transfer to a new posting abroad—the Heart Act, which was sponsored by Representative Charles Rangel, the New York Democrat, will tax them on the unrealized capital gains of their total global assets.

That includes supposedly tax-deferred U.S. retirement accounts, as well as assets like a cottage in Quebec, a share of a relative's business in Bangalore, or a great-grandmother's pearls kept in a London flat.

Henry Alden, president of the consulting firm Everest International Group, calls it "a very draconian tax with stunning liabilities."

Consider someone who'd paid $10,000 for a vacation home in France in 1980, came to the U.S. in 1990 when it was worth $100,000, and left the U.S. in 2008 when it was worth $1 million. That person would be subject to a capital gains tax of $135,000 on that one asset.

Only permanent residents, also known as green-card holders, will be stung. As a result, rich executives considering moving to the United States may increasingly select long-term visas, potentially depriving the country of wealthy immigrants. “Green cards are for poor people,” said Marnin Michaels, a partner in the Zurich office of the law firm Baker & McKenzie who advises wealthy clients.

Many developed countries have so-called exit taxes. But the law's critics say the Heart Act will, over time, tarnish the image of the U.S. as a friendly place for foreign talent and capital.

Congressional backers say that the law closes tax loopholes exploited by wealthy Americans who renounce their citizenship to evade paying taxes, and it applies to green-card holders to put all expatriates on the same footing. A spokesman for the House Ways and Means committee noted that both the House and Senate passed the law unanimously.

Concerned by several aspects of the law, Alden and other accountants who advise multinational companies are working behind the scenes to soften the rules before enforcement begins in earnest.

Alden, who serves on a task force for expatriate issues for the American Institute of Certified Public Accountants, said employers are just now considering the effects of the new rules.

Permanent residents—that is, people who are on a path to citizenship—are covered by basically the same tax laws as citizens. But with no voting rights, they have long been a politically expedient source of funding for congressional spending, said Evelyn Capassakis, a principal at PricewaterhouseCoopers and co-chairwoman of the A.I.C.P.A. task force.

"There's no constituency in the United States that lobbies against this kind of legislation," Capassakis said.

The Heart Act provides tax benefits for veterans, active-duty service members, and reservists. The costs are offset by $411 million in additional expatriate tax revenue expected over 10 years.

The tax applies to all Americans who renounce their citizenship and to foreign workers who relinquish green cards held for at least eight of the past 15 years. The tax applies to unrealized gains above $600,000, but only for people who have an average tax liability of more than $139,000 a year or are worth more than $2 million.

Despite those thresholds, hundreds, if not thousands, of longtime residents will be hit as they try to leave the country, Alden said. And employers, from banks to manufacturers to technology companies, may be required by the terms of existing employment contracts to cover those costs.

In 2007, the National Association of Manufacturers described the proposal to tax expatriates as "potentially devastating" for the industry's many long-term foreign workers. NAM argued that the rules should target people who expatriate to avoid taxes, not workers who return to their home countries for personal reasons and must, by U.S. law, eventually hand back their green cards.

Previously, long-term residents who lost their green cards could avoid taxes on their unrealized gains by spending fewer than 30 days of any year in the United States for 10 years; even then, only U.S. gains were subject to tax.

American companies may respond by sponsoring fewer green cards or filling openings with workers on less-attractive long-term visas, drawing a smaller and potentially less-talented pool of workers to the U.S. One hitch: Spouses of green-card holders can work in the U.S., but foreign spouses of people here on visas in general cannot.

Alternatively, businesses could continue to sponsor workers for permanent residency, on the condition that the employees pay their own expatriation tax if they remain in the U.S. for more than seven years.

Green-card holders now living abroad may consider immediately giving them up under a provision of the Heart Act that allows retroactive dating for nonresidents.

But green-card holders now living in the United States have no way out, lawyers say.

---

Correction: This article has been amended to accurately describe which foreign workers are subject to this tax.