Tax Day is particularly bittersweet for the estimated 7-8 million American citizens living outside the United States. Not necessarily because they have to pay taxes, but that they have to deliver microscopic filings of all their overseas bank accounts and financial instruments to satisfy new Internal Revenue Service regulations introduced by the odious Foreign Account Tax Compliance Act (FATCA) of 2010. Adding injury to injury, the law's conscripting of foreign financial instutions to be IRS tax collectors has led to the predictable result of those banks no longer serving customers with American passports. Lose-lose!
Understandably, record numbers of U.S. citizens are ripping up their passports. Now a newish study of 1,546 American expats by University of Kent researcher Amanda Klekowski von Koppenfels has found that "31% have actively thought about renouncing US citizenship and 3% are in the process of doing so." Why? Primarily because "financial reporting requirements are increasingly onerous and intrusive."
In a direct factual refutation to FATCA supporters such as Rebecca J. Wilkins, executive director of the Financial Accountability and Corporate Transparency Coalition, who wrote with childish glee in The Hill last month that "The FATCATS are the ones with those offshore bank accounts," von Koppenfels's research shows that citizenship-renunciation is not just for the Tina Turners of the world:
Of those who have renounced or relinquished US citizenship, nearly half (43%) have annual pre-tax household incomes of under $100,000 (USD).
In February, I wrote that
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.
So what has the GOP-led Congress done so far? Squat-all.