Taxes

14 Americans Per Day Are Now Renouncing Their Citizenship

Passport-burning sets yet another new record, thanks to terrible tax law that the GOP-led Congress should repeal

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And don't even get me started about the exit fees…. |||

It's a story we've been telling you about for years, and it keeps on getting worse:

More Americans living outside the U.S. gave up their citizenship in the first quarter of 2015 than ever before, according to data released Thursday by the IRS.

The 1,335 expatriations topped the previous record by 18 percent, according to data compiled by Bloomberg. Those Americans are driven to turn in their passports in part because of laws that have expanded bank reporting and tax compliance requirements for expatriates.

The increase in early 2015 follows an annual record in 2014, when 3,415 Americans gave up their citizenship.

These numbers will almost certainly continue to grow, unless the Republican majority in Congress grows a spine and joins Sen. Rand Paul (R-Ky.) in backing a repeal of the awful Foreign Account Tax Compliance Act (FATCA) of 2010. As the Bloomberg News article reminds us, FATCA

requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don't agree to identify and provide information on U.S. account holders.

It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens' overseas financial activities.

As a result, U.S. citizens living overseas have a terrible time finding institutions that will accept their money. Meanwhile, they face genuinely agonizing choices such as this:

"The cost of compliance with the complex tax treatment of non-resident U.S. citizens and the potential penalties I face for incorrect filings and for holding non-U.S. securities forces me to consider whether it would be more advantageous to give up my U.S. citizenship," Stephanos Orestis, a U.S. citizen living in Oslo, wrote in a March 23 letter to the Senate Finance Committee. "The thought of doing so is highly distressing for me since I am a born and bred American with a love for my country."

Reminder: All this pain is being inflicted on millions of individual U.S. citizens for the estimated IRS gain of less than $1 billion per year.

Thanks to the tiptastic CharlesWT for the link.

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  1. Look, these bad rich people have to be punished.

    1. . . .for stealing our money. See how this works?

      1. A perverse, over-complex, rediculously unfair, and totally idiotic tax sytem that makes people want to avoid it is not the culprit, but the evil rich people that try to avoid it are.

        I am sorry but progressive thinking gives me headaches….

        1. NEEDZ MOAR LOOOPHOOOOOOOLEZ!

  2. For many, the decision is forced because the IRS requires them to give full information about their spouses, who are not and who never have been US citizens.

    1. Plus the tax burden on a non-citizen spouse is heavy, very heavy.

  3. The problem is that 1335 people is a miniscule number of people. It’s about 3 per Congressional district. And most of these people don’t even vote. Even if they got all of their State-side family to vote on the issue, it would still be a miniscule number of people. Who in Congress has any incentive to do anything about this and risk looking “friendly with the fatcats”?

    1. Also, I was one of the “millions” impacted by this due to a small bank account overseas. All it meant was two extra pages of paperwork filed to the bank in question and checking one extra box when filing my taxes. The major overseas banks will continue to take accounts from US citizens. If anything, the main beneficiaries of this bill are banks like HSBC and Barclays.

      1. I’m glad that was your experience. However, that wasn’t mine in that the “major overseas banks” were too few and far between in my city to be convenient to do business with. So, I had to take a hit on the interest rate the local banks were willing to offer me with a savings account due to the extra reporting they had to do for an American, that is those banks that were willing to do business with Americans at all.

        However, as you said, the population is too small and the politics of envy to strong for anything to change.

        1. Sorry to hear that. My understanding is that more people shared my experience than shared yours because most people with overseas accounts don’t actually live overseas, and so rarely have need to visit a brick and mortar bank overseas. Still, for those like you I’m sure it has been a serious inconvenience.

          1. It’s the people who live overseas who really get hosed.

  4. Why don’t those 14 just do it once and quit making a daily spectacle of themselves. We get it, you’re too cool for America now.

    1. They become citizens just so they can cancel their subscription in disgust.

      1. Things were better when Reagan Kennedy Roosevelt Lincoln Jefferson Washington was in charge.

        1. Things were better when Sulla was in charge.

  5. It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities.

    Income tax, an immoral system that begs… nay, demands the government create a mass surveillance apparatus to monitor and record the activities of every citizen.

    It must be abolished.

    1. This right here.

      Income Tax is immoral, by definition. You cannot “fix” it any more than you could “fix” Jim Crow.

      These yahoos who say “FLAT TAX!” and “Abolish the IRS!” are merely begging the question. The very premise of income tax is the problem.

  6. FTA:
    “It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.”

    All of this bullshit for $870million/year?
    I’ll have to remember this when I hear progressives talk about how greedy and ruthless conservatives are.

    When was the last time another country engaged in this kind of behavior for minimal gain, but significant misery for its citizens overseas?

    1. Progressives are the most greedy and ruthless people on the planet. They’re obsessed with other peoples’ money and property.

    2. That $870,000,000.00 was done with static scoring, not counting the thousands giving up taxable status. Wonder how much has been/will be generated. I bet it is less.

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  8. It’s obvious that it’s because all those people are RACISTSSSSS!!!!1!!

  9. Yay, drive out the productive class and keep in the freeloaders. That can’t go wrong.

    1. If the rest of the world weren’t more fucked up than us, this wouldn’t be a trickle. That’s all that’s between the U.S. and an economic disaster, too–a relative superiority.

    2. IOW, the status quo.

  10. It’s unfortunate that so many Americans don’t comprehend our law/legal system. I’m an American but I’m not a U.S. Citizen. I’m actually an American National; a category that is recognized by the State Department on their passport application. U. S. Citizens were created by the 14th Amendment and “you” cannot be forced to be one. This has big implications with respect to the enforcement of government codes.
    However, foreign entities don’t understand these things and comply with our federal government’s mandates. End result – unnecessary problems for Americans in foreign lands.
    Ignorance all around.

    1. I’m actually an American National; a category that is recognized by the State Department on their passport application.

      Can you elaborate?

  11. As inevitable as Death
    As pitiless as fire
    Yea, the people’s substance will be swallowed up
    In the gaping jaws of the collectors of the revenue
    -Nostradumbass

  12. Reminder: All this pain is being inflicted on millions of individual U.S. citizens for the estimated IRS gain of less than $1 billion per year.

    By Barack Hussein Obama.

    Of course, inflicting pain on people he doesn’t like simply because he doesn’t like them is just about the only thing he truly excels at.

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