Record Numbers of Americans Renounce Citizenship

It is a tad devalued

More Americans are deciding that they'd rather give up their citizenship than pay more taxes.

The Wall Street Journal reports that 2013 has already set a new record for "expatriations," defined as citizens renouncing their citizenship or permanent residents giving back their green cards. The Journal quotes tax lawyer Andrew Mitchel, who found that there have been 2,369 expatriations as of the end of the third quarter; that's an increase of 33 percent over all of 2011, the previous record-holder.

Expatriations are typically motivated by a desire to escape taxes, and the move is usually undertaken by Americans already living abroad.

Comments

[Ladyhawk]

The reason that expatriations are happening at increased rates is because of a new law imposed on the banks of every other nation by the US. This law is known as FATCA and forces banks and investment companies in other countries to report annually to the IRS the names of every US citizen among their clients and their banking and investment accounts, complete with account numbers, amounts, and most transactions. If the banks do not comply, the IRS will withhold from those banks 30% of all money that flows from the US into ALL accounts (even non-US citizens that hold US stocks, bonds or other investment vehicles). The purpose, allegedly is to catch tax cheats, but the vast majority of US citizens living abroad are ordinary honest folks who work and have families and pay taxes to the governments of the countries they live in, and do NOT owe any taxes to the US unless we earn more than about $95K a year. FATCA kicks in on January 1, 2014 and has increased the already intolerable burden of US tax compliance for US citizens abroad (including horrendous penalties for errors or for failing to include a byzantine amount of information), even though most of us owe no taxes to the US and we also think it's none of the IRS's business how much money we earn when we do not live in the US.

[Thane is a cosmotarian!]

Wow, the linked article is terrible.

the Foreign Account Tax Compliance Act, which makes it tougher for Americans to hide assets in offshore accounts.

Yeah, that's what FATCA is doing. See Ladyhawk's comment above.

"To take advantage of the US's public services, structure and opportunities and then shirk on taxes to me is not right," said one reader, Matt Gardner.

Derp. If you live abroad, there is a good chance you are using few if any public services.

[mr lizard]

Hey now, Barry's ever-present grace don't come cheap... Wherever you are.

[Brendan]

A lefty relative took to bashing the facebook guy in Singapore who renounced his citizenship by claiming that he was scumbag for not wanting to pay taxes because the US kept him from being kidnapped and because he went to school here.

Who knew that being forced to go to school obligated the unwilling recipient in perpetuity?

He gets pissed when I tell him to summarize his position as "We helped you, now we own you"

[Thane is a cosmotarian!]

I still disagree with your friend, but Saverin is at least an atypical case; the argument for him being obligated to pay US taxes is a little stronger (but still weak) because his Facebook work was conducted in the US. The typical people we're talking about renouncing their citizenships are middle-income workers who make their money overseas, or retirees.

[Brendan]

The taxes will increase until morale improves.

[Free Society]

The taxes will increase until the economy improves.

[Free Society]

Then it will increase some more until we fix that problem too.