I wonder how many are doing over other issues. Still a small number, most likely.
Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.
“What we have seen is a substantial change in mentality among the overseas community in the past two years,” said Jackie Bugnion, director of American Citizens Abroad, an advocacy group based in Geneva. “Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”
The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.
[…]
Anecdotally, frustrations over tax and banking questions, not political considerations, appear to be the main drivers of the surge. Expat advocates say that as it becomes more difficult for Americans to live and work abroad, it will become harder for American companies to compete.American expats have long complained that the United States is the only industrialized country to tax citizens on income earned abroad, even when they are taxed in their country of residence, though they are allowed to exclude their first $91,400 in foreign-earned income.
[…]
Stringent new banking regulations — aimed both at curbing tax evasion and, under the Patriot Act, preventing money from flowing to terrorist groups — have inadvertently made it harder for some expats to keep bank accounts in the United States and in some cases abroad.
Renouncing citizenship because they don’t like paying taxes?
Ready the pity party!
1—-2—-3—- AWWWWWWWWWWW
Where are they going that has lower taxes than the US? I suppose you only have to pay a one million flat fee or something in Monaco, but…
Been a while since I looked. Can a USA citizen have dual citizenship or not?
Aussie?
Been talking to one..
Min wage? $18
Cost of milk? $5 per gallon..
Free and PAY medical. pay medical is STILL CHEAP.
He is a police advocate, and makes over $1200 per week.
Retirees taking their savings to lower cost of living countries with the benefit of better/cheaper medical care as a reason.
Costa Rica is loaded with American expats. The new hot place is Panama. Can’t blame them as Costa Rica has a stable government, speak English and you can literally have 8hrs x 7day maid service for 300 bucks a month.
Yeah, taxes, politics, whatever. If they want to tax me, first they’ll have to detect my income. It must be that a lot of expats are stupid enough to voluntarily pay taxes to a country they no longer reside in, or they’ve decided to pay US income tax to save on the local taxes.
In any case I’ve met my share of expat’s, my first job here in Spain was teaching english as a foreign language. All the other teachers were resident expats, some from the USA. I’ve never met anybody that said they left america for politics or taxes. Usually it’s love, or adventure, or cultural curiosity, or learning a foreign language(takes years to do it right), or some just come as tourists and fall in love with the place. It’s a tough decision to leave family and friends behind and adapt to a foreign language and culture, politics hardly seems a serious motive. Unless they bring back the draft.
I’ll probably give up my US citizenship as soon as the paperwork is finished for a Spanish passport. It’s enough to have to keep renewing identification documents for the nation I live in, no need or advantage to dual citizenship in my case.
@woolf: They renounce it because they don’t want to pay US taxes when they’re living abroad and paying taxes in their new country.
@amodedoma: tax evasion is all well and good until you get caught. You probably won’t be, but if you do, don’t come crying here.
The funny thing is that the Wyden-Gregg “Tax Simplification Act,” which has many good ideas, completely eliminates even that $91k exemption for foreign earned income. If it were to become law, these numbers would jump much higher. http://wyden.senate.gov/issues/Legislation/wyden-gregg/
#4 bobbo
I believe it mostly has to do with the nation in question. In my case I’ll have to verbally renounce my US citizenship before a judge and swear an oath of allegiance to the Spanish crown. But it’s not like I have to turn in my US passport and from what I’ve been told they don’t inform the US consulate so it is possible to maintain the US passport. The only advantage would be not having to wait in the lines for foreigners at US customs when I go home on visits.
#8 nomadwolf
Yeah I’ll keep it in mind. As far as the nation of my residence is concerned I do pay my taxes, to them. If the US thinks they’re entitled to a piece, they can think again. If Spain ever decides to give my income data to the IRS, something I doubt, it’s even less probable that they’ll be able to extradite me on tax evasion charges. What’s the worst they can do, threaten to arrest me if I return?! ha!
#8 Obama can declare you to be a terrorist and have you shot. A joke.
#6 You don’t get it. These are high income people that don’t want to pay 50% taxes twice because if they did they’d have nothing.
Well no like a buddy said only stupid and poor people pay taxes because if you have sharp guy doing the accounting they know where all the tax exemptions are that Congress wrote for itself but the problem is still real.
I kind of prefer the “off the grid” approach. If doable. Convert your assets to silver coins, (more negotiable at coin dealers for currency), and operate cash only for the rest of your life. If you have income from pensions, etc, you have to file taxes, but if you have cashed out your 401k, go cash only, skip the interest income part of life, and portion it out you will have no “income”. The property tax is still thorn in your side, however if you own you home. Transfer it to a trusted relative, and let them get the house when you die if they pay the taxes on it for you. Then, apply for food stamps, free medical, go to college for free, go to food banks, and take advantage of all the free giveaways the government gives to the slobs and bums. There are more details to work out, but it beats moving to a third world country. You have to be an idiot to happily pay taxes in this f’d up country.
#4 – Bobbo, the US does not officially recognize you as a dual citizen. They only recognize whether or not you are a US citizen. That is the only status with which they’re concerned.
There are plenty of US citizens who have citizenship in other countries, but as far as the State Department is concerned, they are, first and foremost, US citizens. Usually, this arises when a US citizen is born in another country, or when they receive some sort of “honorary citizenship” from some dinky little country most American high school grads can’t put on a map.
However, when an immigrant goes for immigration here in the US, they are required to renounce their citizenship of their mother country. This is, quite often, a deal-breaker for many permanent residents (my wife excluded – she’s well aware of this, and is fine with telling Argentina bye-bye).
Pretty handy. Dual citizenship. Work here till the money dries up or you have to pay your way, then go home. Hopefully we can convince more of these non Americans to go home real soon.
It’s time to take our country back…
Notice how they don’t actually site a survey or any numbers. Amazing what gets published.
#13, Mac Guy,
Very close. America doesn’t care what you do, if you were born here, you’re an American. It doesn’t matter if you renounce your citizenship, you can always come back. A famous example was Lee Harvey Oswald. He went to the USSR and renounced his American citizenship. A couple of years later he returned.
My father was born in the US but raised and lived most of his life in Canada. He never had any problem crossing the border or was hassled for taxes. Because my birth was never registered, I am considered Canadian and had to apply for American citizenship. I too had to renounce my Canadian citizenship BUT by swearing a loyalty oath only the US. Canada still considers me Canadian and doesn’t care what I swore to the Americans. So I guess I still have dual citizenship.
#15: The data is from the “Federal Register” right there in paragraph 3. However the rest of the article is anecdotal.
#10 & #11: You get a credit for taxes paid to another country. So, if Spain’s taxes are higher than your US taxes, the US tax liability is wiped out. I’m in Taiwan where the tax rates are lower, so without the foreign earned income exemption, I’d have to make up the difference between the 2 tax rates.
That said, Form 1116 (Foreign Tax Credit) is a pain to fill out.
#14: Way to go off the deep end of stupid.
Too bad your ancestors didn’t “go home” after the money dried up. There is only 1 group that has the moral right to say they should “Take their country back,” and they are on reservations.
That said, they are already “dual citizens”. You cannot say they are non-Americans. Do you think my daughter is a non-American simply because one of her parents is non-American?
Do you think I’m not an American because my family emigrated 25 years ago?
Happening here in England also.
The golden rule of government – any government local or national, is the more they get the more they spend.
Here in the UK our government has sspent the tax money of our children and our grandchildren. We have PFI (Private Finance Initiatives) used to build new hospitals etc. Private banking pays and the taxman pays them back – over 35 years or so at a horrendous rate of interest. Then, the hospital is handed back to the government just about the time it needs demolishing and rebuilding. Imagine going to financial institutions and asking to borrow money which the government guarantees to pay back. No problem at borrowing, just add a few percent interest and you’ve got an income for the next 35 years.
These government people are ‘experts’ much in the same way as Bernie Madoff and the banks.
They borrow – you pay.
Some democracy.
Again people grumble about paying taxes that are a small portion of their income compared to what it was before all the tax cuts since the 80s to somehow start the “trickle down” effect. That never happened. It only advanced the wealthy to become more so. But that was what it was designed for as it was lobbied, created and passed by plutocrats.
I agree a flat tax would make accounting easier. But then if it was too easy most people would do their own taxes and the accounting lobby would kick in and bitch, whine and moan until the government would bail them out.
It boils back down to we need to change the way we are governed as it is no longer working in the old model.
And #18 nomadwolf
The people you refer to were immigrants as well. From Asia. They need to go home too.
In fact if we want to be REALLY correct about it. Everyone should go back to east Africa. That’s where they all came from.
Yeah that sounds reasonable.
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#20 Cursor
Absolutely agree with your position on taxes.
When I first got to Spain the taxes seemed terrible, then when we became part of Europe and the VAT tax started in it felt like a prison rape. But after all these years, when I compare lifestyles with friends and family back home, I’m doin’ better than alright. Oh, and the social medicine here is great, no constant premium increases, no worries about them finding an excuse not to pay, and they have all the modern equiptment and techniques. I dare say that if most americans would add what they’re paying in taxes(all) and what their medical insurance is costing them, they’d actually be paying much more than europeans with socialized medicine.
If you think this is bad look at millions emigrants from the former USSR – their pensions earned over lifetime of work were revoked as soon as they left the country. (although they partially recovered lost money by defrauding the local welfare system)
Let me get this straight, they make more the $91,000 annually and don’t have to live here. Sounds like a pretty sweet deal taxes or no taxes.
Add this to the things I could care less about.
#3, lower than a 40% tax rate? Not too hard to find countries like that.
Plus, it’s not just that. As the article says, they have to pay the US tax rate plus the other countries’ tax rate.
Since you have to be rich to just pick up and move when you feel like it. These people sound like aholes with too much money and don’t want to give any of it to Democrats? It’s just a question, I have questions… and a black board.
It’s mostly the hassle for middle-class wages.
You pay the taxes where you live abroad, then you also file a US tax return and you would pay US tax on the same amount – except you can deduct the amount of foreign tax you paid.
So generally you don’t pay any US tax, unless you are working tax free in the middle east.
The real problem is the complexity.
Other country’s tax years run april-april so you get dividends etc in april, the US wants them jan-dec and won’t accept any excuses. Then you have different rules on what you can deduct and whether interest is income or capital gains in different countries.
Then the really fun one – the IRS wants a check on a US bank and the patriot act pretty much stops you opening a US account if you live abroad.
If you are Bill Gates your accountants just do this, but if you are just a MS admin in London it suddenly doesn’t look worthwhile to spend $1000 on accountants to fill in a form to pay $100 tax to uncle sam. That’s why the proposed $90k exemption.
Jeeze… at least the US exempts the first $91k.
Australia taxes 100% of every dollar that an Aussie earns, no matter where, or if that money ever reaches Australian soil. They do allow credit for foreign taxes paid. But no free ride at all.
Another explanation is medical insurance. When you are over 45, and have a medical history, it is financially impossible to buy medical insurance in the US. That alone takes a far larger chunk of the budget than taxes.
Why would anyone on god’s green earth pay/file US taxes if they lived and worked abroad? Sounds insane to me!
Well, everything I read here just convinces me more and more that government is wasteful, inefficient and causes more problems than it solves.
#26 Personality
Actually I picked up and moved when I was 24 (1985). Worked a crappy warehouse job doing all the overtime I could get. Saving for months to be able to come to Spain for a ‘visit’. Had enough for the trip and $1000 cash. Found work easy, was treated well, never went home. It happens a lot more than you might think.
In Canada the rule is that if you reside at home less than 183 days than you don’t need to file. There are other provisos around non-resident status, but that’s the main benchmark. You still have to file a form showing non-residency.
#28 – Australia would never get away with doing that. Most people have 2 passports and could just leave and not come back if the government tried that on. It’s not like the country is anything special.
However, you do have to actually be nonresident in order to get away with not paying taxes on your foreign income. For example, if you move to Singapore to work.
But if you work in Singapore and maintain your family in Sydney, bad luck, you have to pay.