3,000 Americans ditch their passports

Discussion in 'General Discussion | Travel' started by MSYgirl, Feb 18, 2014.  |  Print Topic

  1. MSYgirl

    MSYgirl Gold Member

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    [article]

    Goodbye, Uncle Sam!
    That's what 3,000 Americans chose to say last year, lining up at embassies around the world to renounce their citizenship. The numbers for 2013 represent a dramatic spike -- triple the average for the previous five years, according to a CNNMoney analysis of government data.

    Some of the rush is coming from expats who are tired of dealing with complicated tax filings -- which are only getting worse as new regulations come into effect.

    Unlike most countries, the U.S. taxes citizens on all income, regardless of where it is earned or where they reside. Reporting taxes can be so difficult that expats are often forced to seek expert help, which can cost thousands of dollars.
     
  2. uggboy
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    uggboy Gold Member

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    Reading this, no wonder they move somewhere else. The system is too complicated for many, I presume.
     
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  3. foxberg

    foxberg Gold Member

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    Unless US changes their policy towards Americans working overseas I expect this trend to continue. Many other countries, like UK, for example, don't tax their citizens in similar situations.
     
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  4. Counsellor
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    Counsellor Gold Member

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    From the article:
    Absolutely correct -- the complex reporting requirements (reports have to be made converting transactions done in local currency into dollars for purposes of the report) are so complicated that some foreign banks don't want to go through the learning process (and hire the compliance experts) needed to get it right. And although the law says it's "voluntary" for the foreign banks, if the bank does *any* business in US banking channels (and it's almost impossible not to, these days) the IRS can make life absolutely miserable unless the bank "volunteers" -- and then make life miserable monitoring compliance.

    And we're not talking about huge investment accounts squirreled away; in most cases where reporting is required the accounts are held in local banks by US personnel overseas on business assignments, and are used to hold small amounts of money in local currency to pay daily living expenses such as rent, groceries, and transportation.
     
    Last edited: Feb 18, 2014
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  5. Counsellor
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    Counsellor Gold Member

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    Some may be big financial players, but I would suspect many of the 3,000 who gave up their American citizenship last year are simply dual citizens who identify more closely with the other nation (e.g., a person born of an American father and Ruritanian mother, who has US citizenship through the father and Ruritanian citizenship from the mother, who has lived most of his adult life in Ruritana, married a Ruritanian, and established a family and household in Ruritania), who now discovers the US wants to tax him on his wages in Ruritania.

    Dual citizens, particularly ones who were dual citizens from birth, really can have it bad from the nation they don't live in or identify with. Some nations by law or tradition consider a person who can trace ancestry to one of their citizens, even generations removed, to be citizens themselves, and impose not only tax but also compulsory military service and other "obligations of citizenship" on them. There are numerous horror stories of people going back as a tourist to the country a grandparent or great-grandparent emigrated from being "captured" by the nation they're visiting. Seamen with a last name identifiable as coming from a foreign country who go ashore in that foreign country have met the same fate, and may have to go through a voluntary "denaturalization" process to shed the unwanted second citizenship in order to be allowed to depart.

    During my years, I've seen it happen numerous times -- both ways, where the "unwanted" citizenship was U.S., and where it was non-U.S.
     
    Last edited: Feb 18, 2014
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  6. B1BomberVB

    B1BomberVB Silver Member

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    Greece is notorious for forcing descendants of emigrants into its military service. When I lived in Ohio, I had a Greek-American friend who had another Greek-American friend who went to Greece for a grandparent's/ uncle's/ aunt's funeral & was grabbed that way! Greek law asserts (used to?) that Greek citizenship is not renounceable & is inheritable in the new country for a few generations.
     
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  7. anileze

    anileze Gold Member

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    The graph says citizen+PR. I need to see the raw data :) A good chunk of Permanent residents lose their status when they are away for more than a year without permission. And when they have to file taxes - they just give up the status rather than pay on their total income; which as the article rightly points out - is onerous to say the least.
     
  8. LETTERBOY
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    LETTERBOY Gold Member

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    I believe there are several countries with provisions such as these in their law.
     
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  9. daninstl

    daninstl Gold Member

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    Well at least they won't get fined for not getting Obamacare :)
     
  10. viguera
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    viguera Gold Member

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    This is bad too... a lot of people come to the US and buy properties to have a residence, and it's basically a tax haven.

    This is why London is as bad as it is, with property being basically a reserve currency and the city itself slowly turning into a tax haven for the super rich. If you can prove that you have a residence in another country, you are only taxed on your British earnings, and your property taxes are laughably low.

    That's the reason why Michael Bloomberg has a $20 million home in London but only pays around $3k a year in property taxes -- which is less than I pay on a significantly cheaper home :)

    At the end of the day this will just price everyone but the super rich out of the city -- if it hasn't done so already, while depleting the tax revenue.
     
  11. anileze

    anileze Gold Member

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    Remember if you are living outside you are very unlikely to vote in your congressional district. So who cares about your tax pain ? :cool:;) Didn't co-founder of Facebook (a brazilian Green card holder) renounce his PR, to avoid paying high taxes when facebook went public ?
     
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  12. viguera
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    viguera Gold Member

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    Yep. Saverin did this, renouncing his US citizenship in favor of residing in Singapore, which has no capital gains tax. That allowed him to avoid $600 million in capital gains taxes if he ever got around to cashing out (his stake was worth around $3.9 billion).
     
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  13. euromannn
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    euromannn Gold Member

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    Greek Army moto:
    NEver leave your buddys behind!
     
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  14. satman40

    satman40 Gold Member

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    Who need a passport, just cross the border from Mexicio.
     
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  15. B1BomberVB

    B1BomberVB Silver Member

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    Euromannn, that joke is based on the gay writings of ancient Greek philosophers. Mainstream modern heterosexual Greeks find it just as offensive an ethnic slur 2400 years later as " Amos & Andy" to Black Americans or dumb-Polak jokes to Poles!
     
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  16. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    That doesn't make sense, though. PRs cannot renounce their US citizenship because they don't have it.
     
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  17. LETTERBOY
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    LETTERBOY Gold Member

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    Maybe the graph's creators meant renouncing their PR status?
     
  18. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Maybe. The author of the article is talking about 3000 Americans. Basically, I think it's just crappy journalism.
     
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  19. LETTERBOY
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    LETTERBOY Gold Member

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    IMO, most journalism today is crappy.
     
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