Around the world, millions of people dream of becoming U.S. citizens. Yet recently, an increasingly popular trend has gone the other way, as a record number of people have given up their U.S. citizenship so far in 2013. What's making so many people flee for other countries, and how do taxes play a role?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the question of why so many rich American taxpayers have chosen to renounce their citizenship. Dan notes that taxes definitely play a role, as Facebook co-founder Eduardo Saverin saved a substantial amount of money when he gave up his citizenship immediately before the social-network company's IPO. But Dan points out that lately, financial regulation has made it harder for U.S. citizens abroad, with many foreign banks not wanting to comply with U.S. disclosure requirements and, therefore, choosing simply not to allow U.S. citizens to have banking relationships at all. In addition, personal issues can play a role, as expatriates become comfortable, and no longer see any need to retain their U.S. citizenship.
How does Social Security get affected by renouncing citizenship?
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The article Why Are Rich Taxpayers Fleeing the U.S.? originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.