Green Room

Americans renouncing citizenship over taxes in record numbers

posted at 2:21 pm on August 10, 2013 by

Is this a rational response to market forces, a betrayal of one’s fellow citizens, or something in the middle?

The number of U.S. taxpayers renouncing citizenship or permanent-resident status surged to a record high in the second quarter, as new laws aimed at cracking down on overseas assets increase the cost of complying and the risk of a taxpayer misstep.

A total of 1,130 names appeared on the latest list of renunciations from the Internal Revenue Service, according to Andrew Mitchel, a tax lawyer in Centerbrook, Conn., who tracks the data. That is far above the previous high of 679, set in the first quarter, and more than were reported in all of 2012.

Taxpayers aren’t required to explain the move, but experts said the recent rise is likely due to tougher laws and enforcement.

“The IRS crackdown on U.S. taxpayers living abroad seems to be having an effect,” said Mr. Mitchel. …

The U.S. is rare in that all income earned by citizens and permanent residents, even those living abroad, can be subject to U.S. tax, according to Bryan Skarlatos, a New York lawyer. The U.S. also confers citizenship on people who are born on American soil.

If this is just about the taxes, it’s understandable as a business transaction, but still. My American citizenship means more to me than my tax bill. Too bad it doesn’t for an increasing number of our (former) fellow citizens.

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Middle. I don’t believe we can declare renunciations as “tax caused” and only that. Many countries don’t allow dual citizenship, and force you to renounce all other citizenships. The spike could be anything: an influx of expat retirees now that the economy is creeping back, a spike in marriages, policy changes in another country we are not aware of … etc.

ZachV on August 10, 2013 at 2:30 PM

My American citizenship means more to me than my tax bill. Too bad it doesn’t for an increasing number of our (former) fellow citizens.

And too bad it actually means less, every day.

And will mean dramatically less the day the amnesty bill is passed.

Midas on August 10, 2013 at 2:39 PM

Ask “the rich” to further subsidize half the country and don’t be surprised when they bolt for locales where their generation of wealth is appreciated instead of attacked mercilessly.

Steve Eggleston on August 10, 2013 at 2:50 PM

I posted a lengthy discussion of financial reasons even the non-wealthy would be tempted to turn in U.S. passports in the headline thread, so I’ll focus on the “America means more” aspect on this one with a simple question.

At what point does this land cease to be America? Before people get their panties too far into a knot let me give a bit of context/clarification. For many, America is not this country, it was an ideal. That ideal has fallen by the wayside over the past ten years (and drastically so in the last four). America as the government is today is hardly different than other “western nations.” In fact, it is quite hard for me to argue that I am more free here than I would be in Australia, Japan or Canada in light of recent so-called scandals (they are much worse than scandals). What good is the Constitution if all it amounts to is an historic document?

Pattosensei on August 10, 2013 at 3:19 PM

If this is just about the taxes, it’s understandable as a business transaction, but still. My American citizenship means more to me than my tax bill.

If they’re living and working in another country permanently, it wouldn’t mean as much to them. They don’t exactly carry their Constitutional rights with them abroad.

Ronnie on August 10, 2013 at 3:26 PM

My American citizenship means more to me than my tax bill.

My citizenship means less and less to me all the time. “America”, that entity I understood and prized, is fading from existence. It is becoming like a dream.

rrpjr on August 10, 2013 at 3:39 PM

The problem is that America no longer values my citizenship.

BDavis on August 10, 2013 at 4:04 PM

I value the American Constitution, not a piece of land. Since the Constitution has been trampled on so much lately, I don’t really know where my loyalties lie anymore.

My hope for America is dwindling fast.

Squiggy on August 10, 2013 at 4:42 PM

I gather most are older and return to the country of their birth with their wealth.
I have known quite a few to do this.
My Uncle and Aunt did back in the 1980′s.
Those that do it just for the taxes are few.

Of course we are looking at 1,000′s out of 300,000,000+.

Orders of magnitude makes this a nonissue.

Bubba Redneck on August 10, 2013 at 6:05 PM

If this is just about the taxes, it’s understandable as a business transaction, but still. My American citizenship means more to me than my tax bill. Too bad it doesn’t for an increasing number of our (former) fellow citizens.

So at what point, Mr. Morrissey, do you feel comfortable to call the federal government illegitimate? How many times will the people in charge shit on your citizenship and use our constitution as toilet paper before you decide, “You know, maybe those folks who renounced their citizenship in the last 15 years were right?”

gryphon202 on August 10, 2013 at 8:56 PM

I value the American Constitution, not a piece of land. Since the Constitution has been trampled on so much lately, I don’t really know where my loyalties lie anymore.

My hope for America is dwindling fast.

Squiggy on August 10, 2013 at 4:42 PM

Word to the wise:

God, family, self. In that order. “Country” is no longer part of the equation.

gryphon202 on August 10, 2013 at 8:57 PM

I no longer enjoy any of the services of the US government and do not expect there to be any social security in my old age. Why, precisely, would I continue to pay into that system, instead of the system I am currently using?

This is going to continue to be an issue as the world moves to a more ‘global’ model. No, the US is not entitled to a piece of my meager earnings whilst I am living in another country. They also do not have my permission to ask about my foreign bank account or destroy my chances of getting a local bank account by being bullying prats.

I will happily give up my passport when the time comes for me to do so…it’s a dangerous one to have whilst travelling anyway.

ExPat on August 11, 2013 at 7:45 AM

I will never leave or renounce my birthright. There are other ways to starve the beast we call government.

Bmore on August 11, 2013 at 11:50 AM

The wealthy are mobile and will take their resources to the safest, best location. I’m not sure I can blame them for leaving.

At any rate, I blame the government for creating a hostile environment. They leave in self defense.

dogsoldier on August 11, 2013 at 1:34 PM

My American citizenship means more to me than my tax bill. Too bad it doesn’t for an increasing number of our (former) fellow citizens.

Chump.

I will do whatever is in my best interest, at any time.

antisense on August 11, 2013 at 5:20 PM

My citizenship means less and less to me all the time. “America”, that entity I understood and prized, is fading from existence. It is becoming like a dream.

rrpjr on August 10, 2013 at 3:39 PM

I agree completely. Ed is proud to owe allegiance to a memory of a great country. Like with the economy, inflation of government has caused things of value to be worth less… like our citizenship.

Freedom is what made our country great. As freedom is reduced in our country, why wouldn’t the value of our citizenship change accordingly?

dominigan on August 12, 2013 at 9:47 AM

At what point does this land cease to be America? Before people get their panties too far into a knot let me give a bit of context/clarification. For many, America is not this country, it was an ideal. That ideal has fallen by the wayside over the past ten years (and drastically so in the last four). America as the government is today is hardly different than other “western nations.” In fact, it is quite hard for me to argue that I am more free here than I would be in Australia, Japan or Canada in light of recent so-called scandals (they are much worse than scandals). What good is the Constitution if all it amounts to is an historic document?

Pattosensei on August 10, 2013 at 3:19 PM

Very well spoken, and deserves a repost!

dominigan on August 12, 2013 at 9:50 AM

Over taxes no it would not be enough for me to renounce my citizenship (unless the Democrats get their way and increase it to French levels).

However, I have to ask how much it will mean if Congress approves amnesty.

We need to actually enforce the laws and return real meaning and pride to being an American.

Ukiah on August 12, 2013 at 10:48 AM

Ed is proud to owe allegiance to a memory of a great country.

dominigan on August 12, 2013 at 9:47 AM

Good point that leads to an oft overlooked aspect of the Founding Fathers. They refused to owe allegiance to a memory. Their freedoms were worth far more to them than loyalty/patriotism. Somewhere along the line conservatives got that confused and put patriotism along side unalienable rights.

It is important to be loyal and a patriot, but you need to make sure you are loyal to the right thing. The American government is not the same as the American Constitution. In fact, the latter was designed to circumvent the power of the former. Our greatest threat has always been our own government.

Pattosensei on August 12, 2013 at 10:50 AM

Ed, how can you have loyalty to a country where fully 1/3 of the citizens hate you, the entire government hates you and wants to pick your pocket, works tirelessly to harass you and spy on you, a governement that thinks you are greedy and racist, seeks to control your behavior, disparages and violates your rights, taxes you to an ever-increasing extent, passes laws that opress you, and, finally, depreciates to the point of worthlessness, the entire concept of “American citizen” by letting in and welcoming anyone who feels like coming, all the while completely ignoring laws passed by the people that say otherwise?

Nomennovum on August 12, 2013 at 11:40 AM

The USA is a free country. That means free to leave. If you call freedom a betrayal you are the one betraying us.

Observation on August 12, 2013 at 5:08 PM