More Americans Than Ever Are Renouncing Their Citizenship

×
Citizenship
Getty Images
More Americans are deciding that they'd rather give up their citizenship than pay more taxes.

The Wall Street Journal reports that 2013 has already set a new record for "expatriations," defined as citizens renouncing their citizenship or permanent residents giving back their green cards. The Journal quotes tax lawyer Andrew Mitchel, who found that there have been 2,369 expatriations as of the end of the third quarter; that's an increase of 33 percent over all of 2011, the previous record-holder.

Expatriations are typically motivated by a desire to escape taxes, and the move is usually undertaken by Americans already living abroad. There was an uptick in expatriation at the beginning of President Obama's first term, which has been attributed both to anticipation of more burdensome taxation policies and to increased tax enforcement against expatriates. Indeed, the Journal notes that those who renounced last year may have done so to avoid a higher capital gains tax, and also points to the Foreign Account Tax Compliance Act, which makes it tougher for Americans to hide assets in offshore accounts.

So would you renounce your citizenship just to get out of paying taxes? We put that question to our readers on Facebook, and it proved to be a divisive issue.

"To take advantage of the US's public services, structure and opportunities and then shirk on taxes to me is not right," said one reader, Matt Gardner. But another, Jim Marrion, put family over country: "to protect everything that I have worked for to prepare for me and my family's future -- YES," he wrote.

What do you think? Let us know in the comments.




Increase your money and finance knowledge from home

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Add a Comment

*0 / 3000 Character Maximum

2968 Comments

Filter by:
Matt & Amy

So by all means, renouce your citizenship to avoid paying taxes. Oh, and by the way, please turn in all your firearms. As you no longrer are proteceted by the Constitution and the 2nd Amendment.

November 19 2013 at 9:40 PM Report abuse rate up rate down Reply
2 replies to Matt & Amy's comment
Joseph Pisano

We don't want to renounce but the COST OF COMPLIANCE is ludicrous and unaffordable. Do you even know what an FBAR is? Foreign bank account reporting. The FBAR technically has a $10,000 fine for failing to report a regular, standard checking or savings account with $10,001 in it, even though the account is perfectly legitimate. Do you know what Form 3520 and 3520A is? It's the IRS Trust reporting form that gets triggered just by putting $100 a month away for our son. The form is so dumb that it asks you to provide an EIN and financial information for a UK insurance company - which of course it wouldn't have. The main point is that this situation is triggered by very low minimums that trap and catch middle class folks resulting in compliance costs that far exceed the amounts in question. Whether a CPA fills out a form with $1,000 on it or $10,000,000, the workload and cost is the same.

November 21 2013 at 1:38 AM Report abuse rate up rate down Reply
COMMON SENSE

Get a Job because no one else wants to give you money for nothing

December 17 2013 at 9:57 AM Report abuse rate up rate down Reply
Richie

They are leaving because Obama is a modern day Robin Hood, you Work ur ass off your whole life an have to give it to someone who could care less about earning a dollar they know Obama has their back ,Its only going to get worse leave while u can..

November 18 2013 at 6:41 PM Report abuse rate up rate down Reply
Artie

To those who would leave....I say...."don't let the door hit you in the a** as you go." There are a lot more people coming to this country than leaving, which is of MUCH MORE CONCERN to me than a handful few thousand that have tax issues or other axes to grind with the Gov't and want to renounce their citizenship. This article is entirely misleading and absurd as most of these HP articles are. I think they are written by knit wits and that is about as poltically correct as I get.

November 18 2013 at 1:22 PM Report abuse rate up rate down Reply
3 replies to Artie's comment
betty_brock

Jumping a sinking ship.

November 18 2013 at 12:28 PM Report abuse -1 rate up rate down Reply
Johnny Delgado

Sir / Madam, you are right. It's like leaving the country to Muslims (Which is precisely what is happening with a Muslim President USA have, I am referring to Mr. Barry Soetoro, known as Barrack HUSSEIN Obama), and not caring one damn what happens.

November 18 2013 at 11:33 AM Report abuse rate up rate down Reply
donkeyodee

I don't care where people choose to live. I don't care what country they choose for citizenship. That's their choice. But to hold up the small number of people who choose to renounce their U.S. citizenship as a symbol of failed policy is just wrong, and stupid.

November 17 2013 at 2:23 PM Report abuse -1 rate up rate down Reply
1 reply to donkeyodee's comment
Joseph Pisano

If your families finances were decimated and your family was forced to make life changing decisions then you would think it was wrong. The point is that middle-class folks like us shouldn't be caught up in this. Even ONE family affected by it is wrong. Thank you for your kindness and understanding.

November 18 2013 at 2:09 AM Report abuse +2 rate up rate down Reply
1 reply to Joseph Pisano's comment
Joseph Pisano

Further to my comments - I forgive the vitriol that US residents have towards us expats mainly because you have not been informed of the injustice that has been done to us. Articles like this are dangerous. They are misinformation. And that misinformation provokes the hatred I have seen in these messages. If you knew the injustice done to us you would understand and fight with us. Let me reiterate - THIS HAS NOTHING TO DO WITH PAYING TAXES. THE PEOPLE WHO ARE AFFECTED ARE NOT RICH!!! We are middle class people - teachers, designers, retirees - regular folk, and we have all been affected. Again - THESE LAWS WERE DRAFTED TO CONTROL FRAUD, RICH PEOPLE HIDING MONEY, ETC - but they were poorly drafted and EVERYONE has been dragged into it. I do not expect anyone to understand what has happened if they have read what is in the media BECAUSE IT DOES NOT PROPERLY CONVEY THE INJUSTICE. Thank you.

November 18 2013 at 2:36 AM Report abuse +1 rate up rate down
azsoxfan

Paying taxes goes along with the privelege of living in the greatest country in the world and if people want to renounce their citizenship because of that obligation, have at it. Go be a mooch somewhere else. This country gave you the opportunity to make your fortune and now you want to turn your back on it? Adios pal.

November 16 2013 at 4:48 PM Report abuse rate up rate down Reply
1 reply to azsoxfan's comment
Joseph Pisano

Thank you for your kindness and understanding of a very complex situation.

November 16 2013 at 5:14 PM Report abuse +2 rate up rate down Reply
Joseph Pisano

This article incorrectly represents the problem. Expats are renouncing because of the COST OF COMPLIANCE which is profoundly different. My wife and I are US/UK citizens who have lived in England our whole adult lives and are around 50, We love both of our countries. We have always filed in the US. There is a treaty between the 2 countries. If you earn jointly below approx $180k you do not pay US tax. The cost of filing is high outside the US, around $5k. So we did it ourselves. Big mistake. We did not know the myriad of rules the US gov't put into place and ramped up from 2006 - which are there to stop investment fraud, criminals, etc hiding money. Does an average Joe, like myself, know about FBARs which means that you have to give the US treasury the details of every single foreign bank account including pensions and mutual funds every year? And that they also need to be filed separately to the IRS? Also that we are not allowed to hold foreign mutual funds? Or other foreign investment products? Or personal pensions (paid by a company is ok)? Or that as of 2012 if you are worth more than $400k and you don't file a certain form you are liable for criminal prosecution? The problem with how these laws are drafted is that they have no minimum built into them so middle class people get dragged into it. They were written for the rich, who of course have the money to avoid these issues. Our costs for accountants to amend our returns and pay the IRS have resulted in us having to cash in all of our investments - including the money to pay our mortgage. It is a significant sum of money and has seriously damaged our lives going forward. Our problems for the future are in the cost of compliance. It will cost around $7k a year to file our returns which are complex for no good reason. We cannot freely make investments as we cannot invest in funds nor can we invest in pensions in the US due to not being resident. This is a tragedy for our family as we also pay to care for my mother who is blind and lives in NJ. Our choice is to move back to the states where neither of us has a job, or renounce our citizenships. This has nothing to do with patriotism, it has to do with being practical and survival. The only winners here are the accountants due to negligent, short-sighted lawmakers who ignorantly and errantly ruin lives as usual.

November 16 2013 at 10:12 AM Report abuse +5 rate up rate down Reply
2 replies to Joseph Pisano's comment
SwissTechie

Well said. I couldn't agree more and can confirm what you wrote. I left the US in 2001 during the dot-com crisis to find work. Last year, I renounced US citizenship since all of my banks were rejecting US clients and I needed to refinance my mortgage. I also learned of the high costs of filing to have no tax due, the complications of saving for retirement and many other problems.

Articles like this are very uninformed and are not helping anyone except for accountants.

November 16 2013 at 1:20 PM Report abuse +2 rate up rate down Reply
Philip Teitsma

I think that Mr Pisano\'s comment is spot-on as to the untoward complications that US tax law and regulation impose upon USC\'s residing and employed outside the USA. As Mr Pisano explians, the financial burden imposed on those of relatively modest means is unreasonable and ought to be rectified by the US Congress and IRS. I would also point out that the US I&NA does not allow for dual citizenship. Those that claim citizenship in another country have, IMHO, effectively abandoned their USC even in those circustances in which they are permitted by that other nationality to do so. In particular, the circumstance cited by Mr Pisano in the UK as well as Canada and other British Commonwealth nations may well apply to many others whether or not they are aware of the application of these various national laws to their individual situation.

November 16 2013 at 2:22 PM Report abuse rate up rate down Reply
1 reply to Philip Teitsma's comment
SwissTechie

The US allows dual citizenship, as written on any US passport. Dual citizenship has the advantage of giving individuals the mobility to work instead of relying on government aid, while US policy makes US citizenship undesirable.

November 16 2013 at 4:07 PM Report abuse rate up rate down
stvhndyman

A few years ago I moved to Europe, BUT I still must file an income tax report every year. I haven't renounced my citizenship, but I am an EX-PAT.

November 16 2013 at 8:00 AM Report abuse rate up rate down Reply
Yanni

If anyone wonders why this is happening, just look to our President. Obamacare, higher healthcare, higher welfare, higher unemployment, lower wages, higher debt, higher deficit and a man in office that is doing EVERYTHING in his power to hurt us all. After all, he said it in his book, "If the political winds should change, I will stand with the Muslims." He's doing EXACTLY what he said he will do.

November 16 2013 at 2:02 AM Report abuse +2 rate up rate down Reply
1 reply to Yanni's comment
Big John

So, so misinformed. Many of the countries they are going to have socialized medicine and that is one of reasons they leave the US. You cannot retire here before 65 unless you are wealthy or your spouse provides you with the expensive US healthcare. Google how many industrialized countries have good socialized healthcare plans, you might learn something.

November 18 2013 at 12:31 PM Report abuse rate up rate down Reply