Taxes

Record Number of Americans Renounce Citizenship in 2014

Terrible tax law produces predicted results

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Wait, is that Obama? Confused. |||

From CNN Money:

The number of Americans choosing to give up their passports hit a record 3,415 last year, up 14% from 2013, and 15 times more than in 2008, when only 231 people renounced their citizenship.

Experts say the recent surge is coming from expats who no longer want to deal with complicated tax paperwork, a burden that has only gotten worse in recent years.

Unlike most countries, the U.S. taxes all citizens on income, no matter where it is earned or where they live. The mountain of paperwork can be so complicated that expats are often forced to fork over high fees to hire an accountant[.]

The main driver chasing our citizens away is the authoritarianly named Foreign Account Tax Compliance Act (FATCA), a gruesome bit of government money-grubbing of which Reason has written about plenty over the years. If you have more than $10,000 parked overseas, you have to disclose each and every account to the IRS, including the maximum value it had in the previous year, or face ruinous fines and even jail time. Foreign financial institutions, meanwhile, are deputized by FATCA to work as IRS tax collectors, which they obviously would rather not do, so many banks simply put up a "do not serve Americans" sign, which is a major pain in the ass for the 7 million or so Yanks living abroad. As Shikha Dalmia observed this week, the Obama administration's approach toward runaway Americans (individual and corporate) is to further tighten the noose, which will only increase the number of defections.

Why would politicians knowingly harm their fellow Americans for what amounts to a trivial payoff in collections? Same reason a dog licks its naughty bits. Expats wield no political power, and all things being equal, the government prefers destroying financial privacy. The Republican National Committee one year ago approved a Sen. Rand Paul-led resolution to repeal FATCA; one of many indicators of whether the party will ever be worth a tinker's damn will be if it plops a FATCA repeal onto President Barack Obama's desk.

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45 responses to “Record Number of Americans Renounce Citizenship in 2014

  1. So what, just means that the market works. If the cost of US citizenship out weighs its benifits then people get rid of it.

    1. No. It means coercion and force and your body and your property belonging to the state of your citizenship works.

      1. If you live overseas, just be a drunken slacker. It works for me.

  2. The Republican National Committee one year ago approved a Sen. Rand Paul-led resolution to repeal FATCA; one of many indicators of whether the party will ever be worth a tinker’s damn will be if it plops a FATCA repeal onto President Barack Obama’s desk.

    Gasp! You can’t mean that! Why, MSNBC would call the Republicans extreme and stuff!

  3. Fucking cause and effect- how does it work?

    1. Cause and effect has been repealed, and replaced with good intentions.

    2. Who says it does?

      1. IT’S A GANG!

  4. Sohshull Kontrakt deniers

    1. It was coerced, and thus invalid!

  5. one of many indicators of whether the party will ever be worth a tinker’s damn will be if it plops a FATCA repeal onto President Barack Obama’s desk.

    I’ll be right over here, holding my breath getting drunk.

  6. “The more you tighten your grip, Obama, the more taxpayers will slip through your fingers.”

    1. Until he uses the Death Star to blow up the planet.

    2. One reason Obama and his ilk will NEVER understand this reaction is that he/they think that their actions are impervious to Free Market where individuals (or corporations!) get fed up and leave!

      But hey, power-hungry folks and monopolists Would “Think” That Way, wouldn’t they? Shouldn’t be a surprise to them, but it always seems to be.

  7. Is this more or less than the number of citizens who renounced their citizenship because of Bush? Those would have mostly been from the west coast.

    1. These people are all racists.

      Those people then were patriots.

      duh

    2. Did anyone actually do that?

    3. That would be interesting to find out. I strongly suspect the number of people who renounced citizenship because of Bush is flirting with zero, but I’d like to know how many it really was.

      I knew 7 people who promised they’d renounce their citizenship if Bush was reelected in 2004. 5 of them have never lived anywhere outside the US, and of the two who had lived abroad only one was actually in a position to renounce her citizenship (permanent resident status due to marriage to foreign national). None of them actually renounced.

      1. I should note that 2 of those same people have promised more than once to renounce, including as late as 2014.

        It’s made all the more hilarious because a couple of them have ranted at length for months about Romney having a Swiss bank account and “rich” people off-shoring assets to avoid paying their fair share.

        1. Rich parasites offshoring their stolen gains is always hilarious…

    4. The CNN Money article that is quoted stated that 231 Americans gave up their citizenship in 2008, when Bush was President. In 2013, the number was 3,415. I don’t know the number who renounced specifically because of Bush, assuming any did. However, the number seems to be low.

      1. Perhaps compare/contrast with the number of folks who Voted With Their Feet to Canada during the Vietnam War..?
        Just wonderin’….

  8. one of many indicators of whether the party will ever be worth a tinker’s damn will be if it plops a FATCA repeal onto President Barack Obama’s desk.

    Why? Just so he can veto it? I suppose maybe they could attach it to a 2,000+ page bill and hope he doesn’t notice.

    1. They can add it to some sort of Michelle Obama-endorsed health bill:

      “We’re going to eliminate Fat Californians.”

      1. That Would probably eliminate any Democratic Majority in CA, though… 🙂

  9. So, how long until the administration announces an “exit tax”? I mean, after all, if “they didn’t build that”, it only stands to reason that they should have to turn it over when they leave.

    1. Don’t you already have to pay taxes on your entire net worth when renouncing your citizenship? You know you’ve gone into bad territory when you impose a penalty on someone for something like that. Citizenship has become the equivalent of a cell phone contract.

    2. There already is an “exit tax”. If you have greater than $2 million net worth, you essentially have to declare yourself dead and pay the death tax in order to renounce.

      1. Looks like the income tax levels to qualify as a “covered expatriate” are indexed to inflation, but the net worth ($2M) isn’t.

        That certainly shortens the time horizon.

        1. The Berlin Wall seems silly by comparison.

  10. Now, I’ve been assured Atlas doesn’t shrug. Nothing to see here.

    1. Dear Barak,

      ?\_(^^)_/?

      -Altas

  11. I’m sure the nodders on Morning Joke will gleefully characterize any hint of interest in repealing or modifying FATCA as exactly the same as willfully impeding a policeman’s attempt to thwart a bank robbery.

  12. We should build some sort of wall… you know, to keep people in.

    1. Well, that’s been tried already, but it did conjure up an image for me…

      Putin shouting into a microphone: “President Hillary! That Wall Must Come Down!”

      Too subtle?

  13. The Republican National Committee one year ago approved a Sen. Rand Paul-led resolution to repeal FATCA; one of many indicators of whether the party will ever be worth a tinker’s damn will be if it plops a FATCA repeal onto President Barack Obama’s desk.

    You know what else should be plopped onto Obama’s desk?

    1. A gigantic, steaming pile of Chipotle deuce.

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  15. Taxation is theft. The income tax relies on self compliance. I stopped reporting over 40 years ago.

    If freedom (sovereignty) is important to you, you will find a way to be free. People who whine and complain about excessive paperwork need to look inside themselves, and take responsibility for their lives.

  16. I just know the authors of the FATCA law tried mightily to think of a word starting with T to put on the end of those initials.

  17. America is all about Capitalism. Freedom. Liberty. FATCA not only drives banks away from America, but we Americans abroad are reconsidering how we handle our money — no more large homes, no more business start-ups, and no more higher risk investing. If America wants to treat us as criminals, then we will either leave or hide our money in mattresses like criminals. Citizen-based taxation, FBAR, and FATCA all need to die.

    2016 is becoming a one-issue election for us. We’re only as important as dogs’ balls? We’ll see about that.

    Expats — VOTE for sanity!

  18. “Why would politicians knowingly harm their fellow Americans for what amounts to a trivial payoff in collections? Same reason a dog licks its naughty bits. ”

    I was thinking BFYTW, but Matt’s was funnier, and an evocative and accurate metaphor.

  19. Was a small business owner I favored giving employees all the rope they needed to hang themselves. . . They usually figured out what to do. Our government has been given Waaay too much rope and is hanging us.

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