Tax laws, tax returns, the economy and the political system are prompting thousands of Americans to renounce their citizenship or long-term residency, according to the latest quarterly lists from the United States Treasury Department (via CNBC).
A new report highlights that the number of people who renounced their citizenship soared 14 percent last year to 3,415, which is an all-time record for the Land of the Free.
Experts say this is based upon the Foreign Account Tax Compliance Act (FATCA), legislation that was enacted five years ago, and a primary element of the law took effect this past summer: it requires foreign financial institutions to report the income of their U.S. customers to the Internal Revenue Service (IRS).
Since President Obama took office, the IRS has been seeking out Americans who have failed to report their entire income from their offshore bank accounts. However, this has caused an average of 500 people per year since 2008 to renounce their citizenship or long-term residency.
With that being said, the move to exit the country hasn’t necessarily been because of tax laws. Instead, industry professionals cite the complicated tax system and compliance, which requires wealthy individuals to spend an enormous sum of money on record-keeping and filling out these tax forms.
“…which requires wealthy individuals to spend an enormous sum of money on record-keeping and filling out these tax forms.”
And therein lies the greatest myth about Americans overseas – that by definition they must all be “wealthy individuals”. This is a crock. Most people of American descent who live overseas are middle-class at best. Most have modest jobs and lives and are living from pay check-to-pay check, just like millions of WalMart-shopping Homelanders. They are people who already pay high taxes in the countries where they reside and they can least afford the costs and penalties imposed by a morally-bankrupt USA that would tax them only for their misfortune of having been born in America. NO other country taxes its non-resident citizens like the US. Citizenship-based taxation is nothing less than an Orwellian, global regime of financial slavery and it has no place in the modern world. Americans should hang their heads in shame for implementing and supporting a tax regime as odious and indefensible in its denial of basic human rights and dignity as South Africa’s old Apartheid system.
living in Canada….what he said…..Deckard 1138 nailed it….I just renounced before the bastards raised the cost nearly 5x…and I am not wealthy…..just have lived in Canada for 30+ years and do not want to have to tell the US Govt about my retirement accounts, my bank accounts, AND file tax returns every year from now till my death….and after all that, leave my family open to a possible fight with the US government over my estate. Why should my family of Canadians have that to worry about. And while it may be easy to say good bye to people like me…the ironic part is the type of people being let in…..Enjoy….