
Why are Americans giving up their citizenship? - sim1066
http://www.bbc.co.uk/news/magazine-24135021
======
jandrewrogers
This has been the case for some time and has been getting worse year after
year. It is pretty shameful the extent to which the US tries to attach itself
to the income and wealth of people who are not even living in the country
solely because they are American citizens. In some cases, compliance with US
tax laws (even though not in the US) are in direct conflict with laws in
jurisdictions where people actually reside. In essence, a US citizen is
indentured to the US state regardless of where they live.

US law should not have jurisdiction beyond the border. It is creating a
growing amount of complications for US citizens that are not within US
jurisdiction but which can be held criminally liable for not following US laws
even when those laws are in conflict with local laws where they actually live.
The indifference of the US government to the consequences to US citizens of
their overreach is typical these days.

~~~
pekk
Payment of one's taxes is not the same as, or equivalent to, indentured
servitude. Or slavery.

~~~
alexmat
Not equivalent to, but certainly shares similar characteristics through
coerced surrender of the fruits of one's labor.

~~~
foobarbazqux
Living inside the state, you wouldn't have those fruits if it weren't for the
state. Living outside of the state, tribute of fruits is the fee for belonging
to the state. If someone were truly being forced to pay US taxes, they
wouldn't be able to renounce their citizenship while living outside of the
state. And inside the state, it's like complaining that your parents insist
you buy your brother a present with your allowance, or better yet, the money
you earned mowing the front lawn. The reason the US economy is so deep and
liquid is because the US state is so powerful, and to stay powerful it needs
to collect taxes.

~~~
ekianjo
> Living inside the state, you wouldn't have those fruits if it weren't for
> the state

Nice theory but it's not even like you have a remote possibility to live
outside of the State. Every country require you to BELONG to a State.

You'd rather look back in History how people were actually able to survive and
thrive before advanced State powers even existed. The Human Race was not born
with a State and Government to direct themselves. This is all a very recent
creation in History. Let's not invert the logic and pretend that without State
we would have nothing. This is what Socialism wants you to believe.

~~~
bobwaycott
Oh please. Spare us the shitty history lesson. The state has existed in human
history for more than 10,000 years.

The survival and thriving of the human race prior to the establishment of
states is incomparable to the last 10,000 years--except to say that they
evolved, survived, and propagated the species. They did not _thrive_.

The human race was hardly shit before it began establishing states in order to
organize, centralize, protect, expand, and make its way in the world. Before
that? Humans were nothing.

Ten thousand years of history does not qualify as a "recent creation in
history" unless you're being really particular about establishing recent on a
universal and geological time scale.

Without the creation of states, humanity had and left little to nothing
behind. It merely existed. You would not be here if it weren't for the
creation of the state.

This is not in any way, shape, or form what socialism would have anyone
believe.

~~~
seanmcdirmid
I wonder if there is a libertarian-minded ant somewhere wanting to rebel
against their oppressive colony. States are not unique to human beings.

~~~
ekianjo
Ants are not oppressed by their colony. Read the book "Les fourmis" if you
want to learn more about how the actually live.

------
eschnou
_" Unlike other countries, Americans are taxed not only as residents of the US
but also as citizens, wherever they live."_

Huh?? Just because you are a US citizen, you have to pay taxes to the US
wherever you live? Is any other country in the world having such policies?

~~~
ekianjo
France was also trying to do that recently, since the government there spends
way more than they can hope to "steal" from their citizens. They thought it
was a good idea to try to tax citizens living abroad (on top of the taxes paid
abroad).

If they ever did that, I can tell you a number of French citizens living
abroad would just drop their French passport without hesitation.

~~~
pekk
Taxation is not theft, it is lawful. The developed world is founded on taxes.

~~~
Frozenlock
And war isn't murdering people?

Just because something has the backing of a government doesn't change the
definition of words.

You can argue _who_ is the owner of the money being taxed, but you can't say
something is or isn't because it's lawful.

~~~
wmt
My ISP insists that I must allow them to steal my money on monthly basis or
they would cut my Internet!

Taxes are not theft, but a membership fee. Its perks are roads, fire
department, schools, laws and law enforcement, protection from foreign armies
and basically keeping the society together.

~~~
Afforess
Except your argument makes no sense if you DONT LIVE IN AMERICA. If you pay US
Taxes but live elsewhere, you are in fact getting robbed. Your local and
government services are not provided by America, you get almost no
representation from America, and yet you pay full taxes.

Complete highway robbery.

------
ari_
There are multiple issues here, and maybe one real but complicated solution
besides getting rid of US Citizenship:

US Citizens are taxed on their income by the US regardless of where it was
sourced and regardless of where they live. There are exclusions for foreign
earned income up $97,600 in 2013 [1], but that does not exempt you from FILING
the 1040 and whatever else.

In addition the US has tax treaties [2] with various countries that dictate
who gets first right to tax, based on various criteria. Remember treaties
trump internal law.

None of these exempt you from filing a return, even if you owe no tax to Uncle
Sam.

Then there's the FBAR[3], which is actually a US FinCen form that is
administered by the IRS and must be filed by June 30 of each year. It's for
people who either have or maintain "signature authority" on bank accounts with
a combined value of over $10,000 in the previous year.

Finally there is now FATCA [4], which imposes new reporting requirements on
both US persons and Banks. If you live overseas the amount required to report
is quite high, but it's still more reporting. For banks it's a royal PIA and
many banks will not turn you away if you are a US Citizen (this is anecdotal,
I Don't have numbers).

The problem is that the affected parties, US Citizens living abroad, have no
real franchise in congress. That's because you vote in Federal Elections based
on your last state of residence, which means that your Senator could care less
about you.

The solution: We need about 300,000 expats to move back to Wyoming for a
while. Once they decide that they no longer like Wyoming and want to move back
overseas, they will vote in Federal elections in Wyoming. The expats will then
have a voice in congress and be able to have some influence..

[1].[http://www.irs.gov/Individuals/International-
Taxpayers/Forei...](http://www.irs.gov/Individuals/International-
Taxpayers/Foreign-Earned-Income-Exclusion)
[2][http://www.irs.gov/Businesses/International-
Businesses/Unite...](http://www.irs.gov/Businesses/International-
Businesses/United-States-Income-Tax-Treaties---A-to-Z)
[3][http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employ...](http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employed/Report-of-Foreign-Bank-and-Financial-Accounts-%28FBAR%29)

~~~
Afforess
_Couldn 't care less_

Could care less means they care some, and theoretically could care less than
they already care. Couldn't care less means they already don't care at all.

------
scottjad
One thing not mentioned in the article, "Renunciation of U.S. citizenship was
free until July 2010, at which time a fee of $450 was established."

[http://en.wikipedia.org/wiki/Renunciation_of_citizenship#Uni...](http://en.wikipedia.org/wiki/Renunciation_of_citizenship#United_States)

~~~
john_b
Is this effectively a fee for having a US embassy process paperwork on your
behalf, or are they actually trying to charge a fee for individuals to
renounce their citizenship? It seems to me that the whole idea of renouncing
one's citizenship is to sever all ties previously held to the country and
assume the status of a foreigner in the eyes of that country. How they would
collect that $450 if that is the case is beyond me.

------
tokenadult
"1,131 cases to 189 in 2012. It's still a small proportion of the estimated
six million Americans abroad"

Yes, I would say that 0.019 percent of the passport-holding population
currently living abroad (presumably biased toward the more wealthy passport
holders) is a small proportion indeed. What is the comparable figure for
people from other countries who renounce their citizenship each year to become
naturalized United States citizens? It is surely much higher.

------
cromwellian
If you want to live abroad and pay no US taxes, shouldn't one also give up
rights to any entitlement services from the US government during that period?
Otherwise, US tax payers are subsidizing free riders. If I'm a US citizen, but
spend my whole life working in another country, should I be entitled to draw
social security checks from the US? This would seem to create a moral hazard,
as if you could find a tax shelter jurisdiction, you could work there, pay
little to no taxes, and still cost the US government to support you.

~~~
lgbr
Generally, government retirement programs aren't really tied to citizenship.
You have to have contributed to social security for a number of years to
receive benefits. I'm a US citizen, but my income is German, so I will
ultimately receive German retirement benefits.

Living abroad, there are few benefits I'm actually entitled to. In some third
world nations, if I'm arrested, then I could receive help at the embassy's
expense. But I live in a first world country. I receive zero benefits from the
US government. I can't think of a single service the US government provides
me. In fact, they hold a monopoly on many of the services I need. If I simply
want to notarize a form, I have to get to a consulate and then pay $50
(something I get for free in the US). And yet I have to file taxes and
sometimes PAY taxes.

And here's an even worse bit: I get exempted from paying on the first ~$90k of
foreign earned income, great. But in order to get that benefit, I'm not
allowed to spend more than 30 days in any year in the US. That just means I'm
not going to visit my home country at all, because if I visit family for 29
days, and later in the year I need to come back home for a funeral or other
emergency, well, that would be a trip that could cost upwards of $20k in US
taxes.

~~~
cromwellian
That seems true in the general case, but not in the specific. One can still
obtain SSI if you never worked a day in your life, assuming you can shelter
your income to pass the means test, and then return to live in the US. It's
not a very likely scenario, because if you have the wherewithal to live abroad
and shelter income, the paltry SSI isn't worth the effort.

Still, it begs the question if citizens have some obligation to pay some
minimum level of taxes, albeit small, for the basic services and protections
one would still expect as a citizen: the right to vote, the salaries of your
representatives, courts and foreign service, etc.

------
te_chris
So the US has no concept of tax residency?

~~~
thaumasiotes
It does. However, in principle all US citizens are obligated to pay US taxes
no matter where their residence or tax residence may be. There are a couple
ways to be credited for tax paid abroad.

------
deadfish
Guys over the pond... time for another tea party? 'taxation without
representation'? ...'taxation without services'?

------
guard-of-terra
Whoa, whoa, US can tell other countries' financial institutions to report to
IRS "or else"?

I think the world should be shelling DC, I mean, forget Iran and Syria, right?

~~~
pekk
It's a diplomatic issue what countries report to each other. And your
suggestion is mass murder?

~~~
guard-of-terra
Well, now you agree Iraq invasion was a mass murder?

Once USA extort money going from country A to country B for failing to comply,
it's no longer a diplomatic issue, that's an international crime. And it was
from the day one - USA threatening financial institutions in other countries,
giving orders to them directly, that's audaceous.

~~~
geoka9
As I understand it, the only way the USG can enforce those orders is if the
financial institution has a branch/subsidiary in the US. If they don't, I
think they are free to ignore the requirement.

~~~
NonEUCitizen
I heard it tries to go one step beyond that. If Deutsche Bank has operations
in the US, it falls under FATCA. BUT it is also required to not do business
with some small German bank that has no operation in the US that does not
comply with FATCA; i.e. DB is used to coerce the small German bank with no US
operation to report its American customers in Germany to the US.

~~~
geoka9
This is really evil.

------
Aloisius
This doesn't make sense to me. If you give up your citizenship, then
presumably you have citizenship elsewhere, so why not just open a bank account
under your foreign citizenship? How is the bank to know?

The only thing I can think of is that maybe people are avoiding taxes in the
US and their adopted country as well. After all, many countries Americans move
to have such high tax rates that after deductions, their US tax liability
would be quite small.

~~~
UnoriginalGuy
Replying before reading the article just wastes everyone's time.

PS - The answers to all of these questions is contained within the article.

~~~
Aloisius
I read the article. It talks about Facta and then tries to link it to people
complaining about how expensive it is to file tax returns, but the two aren't
linked unless you weren't reporting your real income. Americans have always
had to file taxes while living abroad. The tax laws have been extremely
complicated for decades. Facta isn't changing that.

FTA:

 _" Fatca provisions impose no new obligations on US citizens living abroad...
US taxpayers, including US citizens living abroad, are required to comply with
US tax laws," he says​._

No, this sounds more like people who might have fudged some numbers now
worrying that the IRS is going to find out and realizing that their
citizenship isn't worth the yearly bill.

~~~
auctiontheory
_It became so complicated to do her tax return that she turned to
professionals, at an annual cost of nearly $2,000 (£1,250), with the prospect
of Fatca raising the price to $5,000. Also, fewer tax lawyers were taking on
American clients, she says, and some banks were even turning away American
money._

I don't see any mention of tax-dodging in the paragraph above. Which part of
paying $2000 (and maybe soon $5000) to file taxes, and banks turning away
American customers, don't you understand?

~~~
Aloisius
See this is what I don't understand. Facta does not change tax law. It should
have no bearing on the cost of having your taxes done. You already had to
declare foreign bank accounts to the IRS, so really all the law is doing is
getting them declared automatically. Now fewer tax lawyers certainly will
raise costs, but that has nothing to do with Facta.

~~~
BlobbleBlab
What it changes is that it requires (non-US) banks to keep track of which of
their accounts are owned or co-owned by someone who may have a (dual) US
citizenship, and may have made an error in their tax returns, or risk having
some of their US assets seized. Some banks just prefer not to take the risk.

The non resident citizen tax returns can become very complicated in the
situation where the non resident US citizen is married to a non resident
foreigner. The tax forms don't even support this configuration - the spouse
must have a social security number. The foreign spouse must then apply for a
special "non resident alien" social security number, for the special purpose
of being able to file taxes in a country they are not even allowed to enter
without a visa.

And how exactly do you determine the value of your shared assets in dollars?
Have you made capital gain every time the dollar fluctuates against the local
currency? Since we bought our home, our property has dropped significantly in
value in the currency we earn our wages in, but theoretically gained a bit in
dollars, so how can we be sure this doesn't add up to exceed $50,000? The only
way to be sure is to hire an expert figure it out for you, for several
thousand $. They are now charging more for their services because of the
higher risks and responsibilities involved.

The net amount we have to pay in that country one of us isn't allowed to enter
without a visa has always added up to $0 because the extremely high taxes we
already pay locally (50+ percent income tax, 20+ percent sales tax, 80+
percent excise tax on fuel etc) can be deducted.

