
Americans Renouncing Citizenship at Record High - chenster
https://www.bloomberg.com/news/articles/2017-02-09/americans-renouncing-citizenship-at-record-high
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NateyJay
I was born in and live in Canada, but am a US citizen through a parent. The US
imposes difficult reporting requirements and regulations on its citizens
living abroad. All bank accounts, their balances, stocks, earnings, and more.
If you make above about $100k, the US demands taxes on your income, even if
you earned the money locally and have never stepped foot in the US. (Edit:
Only if living in a country with lower taxes than the US.) Retirement savings
accounts and other financial tools that are given local tax breaks, the US
does not recognize, and may tax your contributions on.

If you have not met your reporting obligations, whether you were aware of them
or not, they can impose huge fines. Many american citizens here, or those with
american parents, fear crossing the border or drawing attention to themselves.

Lottery winnings are not taxed by Canada, but if an american wins the lottery
anywhere in the world, the USA will take its chunk.

And to add insult to injury, if you want to get out and give up your US
citizenship for good, it will cost you. Before 2010 renunciation was free.
From then to 2014, it was $400. Now they charge $2,350 plus a big exit tax if
your net worth is above $2m.

The US is the only country that taxes its overseas citizens this way, beside
Eritrea.

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lend000
> The US is the only country that taxes its overseas citizens this way, beside
> Eritrea.

And the UN has routinely condemned Eritrea (and only Eritrea) for this
criminal practice.

The US tax code has grown to be the most oppressive in the first world,
including compared to countries with higher net rates.

~~~
pzh
That's because Eritrea doesn't have the US's military, and its ability to
project power is limited to sending a couple of goons to harass a few rich
expats they're aware of.

Also, the stick that the US uses to enforce FATCA is the threat of a 30%
penalty on all US-sourced income of the entities that fail to report. That and
the threat of seizing funds, because any SWIFT transaction in US dollars
always passes through the US, even if it is to send money from Germany to
India.

~~~
jacobush
Actually Eritrea harasses quite a few ordinary people through a Stasi like
network of regime loyal expats tasked with gathering intel on their brethren.

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ArchD
FATCA is a mess. For example, some non-US (e.g. Hong Kong) bank will assume
you are a US person (and presumably share your account info with the IRS) if
you opened the account with a US phone number unless you prove that you are
not a US person by doing some troublesome paperwork. (So what if you have a US
number? It could be a Google Voice or Twilio number.)

The onus should be on the IRS to prove to the bank that the account holder is
a US person, not the other way round. They want the money but they won't do
their share of the due diligence.

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hartator
Worth noting that Trump signed to withdraw FACTA. Will see if follow up on
that as much on immigration stuff.

~~~
pzh
That would be really awesome if he did that, even though he would be doing it
purely to help out his friends from the banking lobby.

FATCA is pretty bad because it imposes a one-sided requirement that everybody
report to the US, but the US doesn't want to lose its beneficial position of
being the world's biggest tax-haven, so it sends data to nobody. There were
calls to make the US send information to the EU and other countries, but the
banking lobby has so far succeeded in stopping such initiatives as they don't
want the Russian mob's funds in Miami banks to suddenly go away.

~~~
tajen
> of the world's biggest tax heaven

As a European, I've always thought the US had extremely high reporting
requirements, power of investigation, and anonymity was dead since the NSA was
invented. What makes it a tax heaven? Is it the Delware loophole only?

~~~
pzh
It's not just Delaware. There are a bunch of other states, e.g. Wyoming,
Nevada, Florida, etc.

Having said that, it's not a tax haven if you're a US resident for tax
purposes (then you're completely screwed). If you're a European with no ties
to the US however (no residency, work visas, or US parents that can tie you to
nationality by inheritance), then you can incorporate or stash money in the US
in complete anonymity. The US won't easily (at least not on a fishing
expedition) give out your information to your government. (And I'm guessing
your concern would be hiding money and information from your own government
rather than the NSA).

Check this out:

[http://www.npr.org/2016/04/08/473477551/why-wyomings-laws-
ma...](http://www.npr.org/2016/04/08/473477551/why-wyomings-laws-make-it-an-
easy-tax-haven)

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X86BSD
I'm curious what happens when you do renounce your US citizenship? Are you
deported? To where? Whose laws are you subject too? How can you travel
anywhere? Can you get citizenship anywhere else?

~~~
jfim
I believe you're not allowed to renounce your citizenship if you don't have
another one; in other words, you can't be stateless.

Edit: Interestingly enough, the US allows it. The Wikipedia page on
statelessness says "The United States, which is not a signatory to the 1954
Convention on the Status of Stateless Persons or the 1961 Convention on the
Reduction of Statelessness, is one of a small number of countries that allow
their citizens to renounce their citizenship even if they do not hold any
other." See
[https://en.wikipedia.org/wiki/Statelessness](https://en.wikipedia.org/wiki/Statelessness)

~~~
X86BSD
Right, but I don't know what happens when you are a "stateless" person. Are
you ever allowed in ANY country? Are you deported from the US after becoming
stateless? I have never seen a good explanation of what happens AFTER becoming
stateless.

~~~
Turing_Machine
I would guess that this varies a great deal depending on what country one
happens to be in at the moment of becoming stateless, but that's really just a
hunch.

Update: the Wikipedia article seems to back that up.

[https://en.wikipedia.org/wiki/Statelessness](https://en.wikipedia.org/wiki/Statelessness)

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malikNF
Can someone at bloomberg do something about those annoying videos in there.
Not even giving you an option to close the damn thing.

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ntelson1s
Seems like a risky trade to take just for money's sake considering the
immigration policies currently at play.

~~~
GuiA
There are pretty much no upsides to being a US citizen if you don't intend to
make the US your primary residence ever.

And if you have a lot of money and want to get back in, an investor visa or
even a green card is not that hard to get.

~~~
kchoudhu
> a green card is not that hard to get

Have you, like, ever applied for permanent residency?

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WildUtah
If you have half a million dollars in free cash you can afford to set aside
for a few years (you'll even get most of it back), you can buy a green card.

~~~
rtpg
Yeah that's not most people.

That being said, the green card lottery is apparently _much_ easier if you're
from Europe (because of the lack of competition for the 7% country limit of
cards).

But overall, the US is among the hardest places in the developed world to get
a good visa situation, I think.

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xbeta
With H1-B/GC applicants also climbing record high in the recent years, what
are we trying to say here?

~~~
WildUtah
H-1Bs do not have to pay US taxes for life no matter where in the world they
go. It's just one more way that foreigners in the USA are privileged again and
again over American citizens.

~~~
xbeta
Really? As a current H-1Bs, I believe I paid in both income tax + sales tax +
property tax (I owned a property here). And I could be kick out at any rate,
which means those taxes meant nothing to me, nor to my future generations. Is
it really that privileged?

~~~
Spooky23
You get to pay Caesar his due and leave.

If you're a non-resident US citizen in particular, you can really be screwed.

