
Why I gave up my US passport - nekojima
http://www.bbc.co.uk/news/magazine-24338387
======
spodek
I grew up loving the philosophy and values I learned about America --
Jefferson, Adams, Thoreau, King, Edison, Feynman, ... welcoming Einstein and
so many others. Young as the country and its culture is, we've produced some
greats.

As I've matured and times have changed it's been impossible to miss other
parts of America grade schools don't teach -- increasing division between rich
and poor, decreasing social mobility, corporate control of the government,
entrenched racism, sexism, jingoism, needless wars based on lies, ... I could
go on. Anyone could.

I haven't lost faith in my country -- such vague words could mean so much in
this context -- but I don't like how the powerful are influencing the
processes that led to it flourishing so long, even taking into account its
colossal mistakes (Prohibition?), nor how those without power aren't taking
responsibility to gain power like they (we) could. I'm impressed with the love
many foreigners have for much of our freedom, which I share.

I tell myself living in Manhattan is like living outside any country. Legally
New York City may be part of the United States, but culturally it's its own
world.

Still, I find it valuable to look at where you live sometimes with rose-
colored glasses because life feels better when you love your home, but
regularly to evaluate it warts and all. How else can you change it if you feel
you can, or escape before the need becomes desperate, should the need arise?

(Here is where people often ask where it's better or point out places it's
worse. I don't argue against asking those questions, but we don't _have_ to
jump to comparisons with others, which distracts from evaluating it from what
it could be. Or once professed or aspired to be.)

~~~
ryanhuff
Don't you think that the division between rich and poor has historically been
worse than it is today? I can't imagine that the early[edit] 1900's,
characterized by horrendous labor practices that ultimately brought on the
labor movement, were of a society with a more narrow division of rich and poor
than of today. I have unsuccessfully looked for a reference to compare today's
middle class to those of the early 1900s. Please share if you know of any.

~~~
aptwebapps
Usually when people talk about the growing income gap they're not looking back
as far as the early 1900s. Like here:

[http://www.motherjones.com/politics/2011/02/income-
inequalit...](http://www.motherjones.com/politics/2011/02/income-inequality-
in-america-chart-graph)

If you want to look further back, you can probably find the data somewhere
here:

[http://research.stlouisfed.org/fred2/](http://research.stlouisfed.org/fred2/)

------
arbuge
It is hard to fathom the complexities you face when overseas as a US citizen
due to the US tax code, which is basically the only code of a major developed
country to tax its citizens wherever they may live worldwide, regardless of
their source of income.

There is a system of tax exemptions and credits within the code to offset the
double taxation this would imply when living in a jurisdiction which imposes
its own income taxes, as most countries in fact do. The difficulties arise in
reconciling the US tax liabilities with those owed to the foreign country,
calculating the applicable credits, etc. In practice this requires expensive
tax professionals in most cases - and they get really expensive if you're an
entrepreneur with an overseas corporation, which is pretty much a nightmare to
deal with on several levels - different accounting standards, controlled
foreign corporation tax reporting, paying estimated taxes when having no clue
what the result of a complex tax calculation process will be, etc.

Besides income taxes, there are also bank account reporting requirements (TDF
90-22.1 form) which have made many people's lives difficult. The penalties for
not reporting any foreign bank account are draconian even if you live overseas
and need an account where you live (you will). Even worse, foreign banks are
reluctant to deal with US citizens because of the reporting they in turn are
required to do on their behalf, resulting in frequent difficulties opening and
maintaining bank accounts overseas if you are a US citizen.

Finally, as a US citizen overseas you are still entitled to social security
payments from the US government, but get no benefit from your contributions to
Medicare, which only covers you within the USA proper. For that matter you
also get no benefit from most of the residual income taxes you pay to the USA
that you can't offset with tax exemptions/credits. It's not like those taxes
will be used for any of the infrastructure etc. you use overseas.

------
mathrawka
Last year I was a contract worker for a US company while living in Japan. In
addition, I had some side income earned, and all this was taxed as a Sole
Proprietor in Japan. The paperwork was about 5 pages worth of just filling in
boxes with the numbers from my books.

My situation was pretty complicated on the US side, so I enlisted the help of
a professional to get everything kosher on my US return. I have never seen
such a complex tax return in my life. In the end, it was 40 pages long, and
that is not including the FATCA I did seperately. And all that just to show
that I owe $0 for US taxes.

However, we are considering moving back to the US, if even for just a year, so
I keep my US citizenship for now.

------
beedogs
I haven't renounced yet, but it's so very tempting. The arrogance of the US's
dual-taxation bullshit is enough of a reason to consider it.

~~~
pekk
Be honest: it's not really about your perception of arrogance in a tax policy.
It's really about the money. You think you are entitled to the privileges of
US citizenship but somehow exempt from its legal obligations.

~~~
NamTaf
What benefit from paying income taxes, exactly? You're not living there, so
you don't benefit from any of the social services that income tax funds.

Just about every other country I can think of does not tax citizens abroad who
do not earn money on their native soil. What makes you think the US system is
right and all the others are wrong?

~~~
bandushrew
and yet you do not want to give up your citizenship, so clearly you feel you
are benefiting from _some_ of the social benefits that your income tax funds.

~~~
halostatue
My sole benefit is that my parents have not died, and I don’t want some
hopped-up border bureaucrat to be able to tell me that I can’t visit them (or
my brother) for five years because his coffee was too hot.

Remember how much _arbitrary_ and _non-appealable_ power U.S. border guards
have over visitors.

I get nothing else from my U.S. passport, because the only country I use that
passport for is…the U.S.

------
MichaelGG
What I'd be more interested in is if there is harassment for doing so. My
daughter is an American citizen unfortunately (happenstance of birth), but
won't be living in the US for any foreseeable reason. She'll be burdened with
tax and reporting issues all her life if she doesn't renounce. But if she does
renounce, will they hassle her when visiting family? What about if she does do
some temporary work in the US, will they deny visas?

~~~
nly
Happen-stance of birth? What are the rules there about citizenship by birth?
In the UK one of your parents has to be a citizen, or have been "legally
settled" (allowed to stay indefinitely).

~~~
jmreardon
With the exception of children of foreign diplomats, if you are born in the
USA, you have citizenship. Who your parents are is irrelevant.

~~~
logicallee
can you link a citation to the 'exception' you mention?

~~~
jmreardon
Sure:
[http://www.law.cornell.edu/cfr/text/8/101.3](http://www.law.cornell.edu/cfr/text/8/101.3)

The relevant portion is: "A person born in the United States to a foreign
diplomatic officer accredited to the United States, as a matter of
international law, is not subject to the jurisdiction of the United States.
That person is not a United States citizen under the Fourteenth Amendment to
the Constitution. Such a person may be considered a lawful permanent resident
at birth."

~~~
sliverstorm
So, rather than being _denied_ citizenship, it's almost like given their
parents privilege, they are being _protected_?

~~~
HarryHirsch
They are protected from the duties of a citizen. Military service [1] and jury
duty come to mind.

[1] I know that the US does not have conscription at the present time

------
clueless123
I wonder what is going to happen to all those US citizens living abroad with
the new health insurance requirements.. Will they be forced to pay even they
can't benefit from the services ?

( Specially if they are already covered by their host country healthcare
system. )

~~~
jacalata
US citizens who live abroad for 330 days in a calendar year are exempt: see
question 12 at [http://www.irs.gov/uac/Questions-and-Answers-on-the-
Individu...](http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-
Shared-Responsibility-Provision)

~~~
bentoner
That's really harsh. Someone living abroad could easily spend > 35 days/year
in the US on business or visiting family.

~~~
anologwintermut
Not really. The point of the requirement is to subsidize the health care you
will get if they find you unconscious, naked in a ditch without ID and can't
tell if you are wealthy enough to pay or not.

Absent insurance, that privilege is paid for by the higher prices charged to
people unlucky enough to need healthcare.

Now, if you can't get plans that consider the fact that you are only in the US
for < 100 days a year, then yes it's harsh.

~~~
mathrawka
As an American that lives abroad, whenever I visit the US I make sure I always
have traveler's insurance for myself and all my dependents that are traveling
with me. Last year I was in the US for a over 100 days, and my traveler's
insurance was valid for every second.

It shouldn't matter how many days you are in the US or not, it should matter
where you declare your tax home.

~~~
anologwintermut
Or the travelers insurance should count as health insurance in terms of that
mandate. Does it?

~~~
mathrawka
Just a guess, but I don't think it will. The policy and all documents are not
in English, and no reason for them to be either.

So if they make an exemption for travelers insurance, it will be hard for them
to verify that it meets the criteria of the exemption.

------
steven2012
If a US-born citizen (as opposed to naturalized US citizen) renounces their
citizenship, can they claim it again afterwards? Or is it forever gone?

~~~
rrouse
The State department website on it says that the renunciation is final unless
it meets certain guidelines, which basically means that if you did it at age
18+, you're going to have to go through the immigration process just like
every other non American.

[http://travel.state.gov/law/citizenship/citizenship_776.html](http://travel.state.gov/law/citizenship/citizenship_776.html)

~~~
philiphodgen
That's correct. Once you have renounced U.S. citizenship you are like all the
other billions of people on the planet--if you qualify to re-enter the USA and
apply for citizenship, you can do so.

The tax rules for giving up citizenship have specific provisions fully
expecting people to give up citizenship twice. :-)

Disclaimer: I am a lawyer, and I do lots and lots of expatriation cases.

------
mscarborough
Unfortunately the US gov could not care less.

I'd be inclined to say "well if you left, then fine", but with the dual
taxation and the inability of Congress to pay their bills (it is not just
Democrat money, by a long shot)...what exactly are we paying for and why
should everyone be responsible for it?

------
hrasyid
Is there any historical examples of a representative democratic country
simplifying its tax code? How was it done?

The United States have been around for centuries, and each elected governments
and congresses have their own idea about how the tax code should look like.
Probably that's why now we have very complicated system, because it's the
aggregation of centuries' worth of ideas.

The logical step is to simplify it, but I don't think it's really possible
with the current US political system. Each part of the complexity benefits
some group, and every group will influence the lawmakers to keep their
benefit/loophole.

~~~
rodgerd
New Zealand has dramatically ( _dramatically_!) simplified our tax for
ordinary (salary/wage employees), especially in the 1980s and 1990s. Given the
period was one of dramatic economic and social change I doubt most Kiwis could
give you a remotely impartial account (myself included); a couple of key
elements that appear to be completely absent in the US culture are:

1/ A willingness to accept loophole losses. I have almost nothing I can really
claim on as a salaried employee - childcare and charitable donations are about
it. There used to be more. I certainly can't claim deductions for "having a
mortgage", for example. If I was a lot poorer or had a lot more children (7+)
I could get a tax redution for that, but nothing like as generous as the US
rates are.

Most of the loophole reduction went hand-in-hand with tax cuts, but we're
talking dropping from a top rate of >60% by the end of the Muldoon government
down to the 30s for the top tier.

2/ Much of the compliance burden _and risk_ falls on employers, so business
groups tend to support simplification, because it mitigates risk and reduces
costs for them.

3/ There's more a perception of getting value out of taxes paid in New Zealand
than the US. Mainstream political dialogue tends to be around fixing perceived
problems in government, not nuking it to a smoking hole, pissing in the hole,
and sowing the ground with salt.

Many US progressives/lefties I've spoken with seem to react with suspicion and
horror at the idea of being able to have the IRS estimate your taxes on your
behalf in case they swindle them out of their tax breaks, which is both a nice
combination of 1) and 3), and illustrates the gulf operating. Mainstream
left/progressive voters in New Zealand are not commonly of the opinion that
accepting the IRD's estimate on owed taxes is going to stiff them out of
thousands of dollars in loopholes.

~~~
hrasyid
Nice example.

>> _Many US progressives /lefties I've spoken with seem to react with
suspicion and horror at the idea of being able to have the IRS estimate your
taxes on your behalf_

I felt the opposite when I first heard that US tax system was too complicated.
What I know before about filing tax was simply 1) approve my employer's filing
about my salary 2) declare child and donation. How complicated could that be?

------
scottlilly
I'll be able to apply for Paraguayan citizenship in about a year, and I plan
to renounce my US citizenship immediately afterwards.

I'm so much happier here in Paraguay (even with all the cultural differences),
instead of the US. I also can't say I feel happy about how things have
progressed in the US over the last few years - regarding politics and
economics. I really expect that Paraguay is the country where I will build my
family and my future.

------
ethana
It used to be free to renounce U.S citizen ship, but I think it's $500 bucks
to file for it now because too many people are lining up.

~~~
philiphodgen
The fee is $450. Most people are happy to pay it.

(Disclaimer: lawyer; handle lots of these cases).

------
jmspring
Current citizen, wife with dual citizenship. Long term we will probably end up
in her country (an EU nation), we are already looking at strengthening some of
those ties.

She had to divest some interests when she took up residence here, if we decide
to go back over there (likely in the next 3-5 years), we will look carefully
at whether or not staying in vested in the US makes sense. The US feels like
it is trying to turn every benefit into something akin to a 401k -- HSA
accounts, etc. Which isn't ideal, but they still aren't separating things from
the employer based healthcare model...so in a sense many are getting the worst
of both worlds.

Healthcare may actually be the motivating issue for us.

------
mahyarm
Here is a quick youtube issue summarizing the citizenship based taxation issue
the USA has. Supposedly it came out of the civil war:

[https://www.youtube.com/watch?feature=player_embedded&v=DKFE...](https://www.youtube.com/watch?feature=player_embedded&v=DKFEpAWjeu4)

------
greg5green
If corporations are people, why do they not need to pay taxes when they go all
"ex-pat?"

------
okonomiyaki3000
I'm turning Japanese.

------
LekkoscPiwa
Some of the stuff the people in the article write is just plain stupid. If I
could get US citizenship for my newly born daughter (born in Poland) after
being in the US total just 5 years, why she couldn't get it done, is beyond
me. People who have lived in EU complaining about US burocracy and pointing it
as a reason for giving up on an US citizenship are beyond me too. US taxation
system is a walk in a park compared with EU. All the people from the article
seem to be carefully selected socialists big time who just couldn't wait to
give up on the US citizenship no matter what. And for one each of them there
are literally thousands foreigners who would rather live in the USA, including
Germans, Canadians, etc.

~~~
logicallee
Yes, the article wasn't exactly clear but pretty much all of the stories
(well, I only read a few) refer obliquely to one thing: you are subject to
taxation by the United States even while you're a resident abroad, and paying
taxes abroad.

It is as though your 'home state' continued to tax you (or make you file
paperwork) long after you've moved to California. Nobody else (worldwide) does
this. It doesn't make any sense.

This is a primary motivation people have for renouncing U.S. citizenship.

~~~
martey
> _It is as though your 'home state' continued to tax you (or make you file
> paperwork) long after you've moved to California._

This is an imperfect analogy (since there is not really a concept of
"citizenship" for individual US states), but note that claiming residency in
one state while living in another will often require you to pay taxes in both.

> _Nobody else (worldwide) does this. It doesn 't make any sense._

I think it is pretty clear its purpose is to prevent US citizens from deciding
to live abroad in order to pay less income tax. The legislation that requires
US citizens to report foreign bank accounts (which some of the people in the
BBC article mention) is called the "Foreign Account Tax Compliance Act" [1] is
supposed to prevent all citizens from committing tax evasion by hiding funds
in foreign bank accounts.

I think there are multiple reasons why you or others could argue that these
rules are counterproductive [2] or otherwise detrimental to the interests of
the United States, but I do not think they can be dismissed out of hand.

[1]: [http://www.irs.gov/Businesses/Corporations/Foreign-
Account-T...](http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-
Compliance-Act-\(FATCA\))

[2]:
[https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...](https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act#Controversy)

~~~
logicallee
Of course they can be dismissed. What you're not getting is that these people
have to pay full taxes in the place they're actually living. A place you're
not living has no business collecting further taxes from you.

~~~
martey
> _What you 're not getting is that these people have to pay full taxes in the
> place they're actually living._

In that case, they can claim a "Foreign Earned Income Exclusion" [1] which
reduces or eliminates their American tax liability for up to $97,600 of income
that they are "paying full taxes" on.

> _A place you 're not living has no business collecting further taxes from
> you._

As other comments have noted, just because you are not living in the United
States does not mean that you are not materially benefiting from citizenship.
Despite living abroad, you can still vote, travel to and from the United
States, and take advantage of US diplomatic representation in case of arrest.

[1]: [http://www.irs.gov/Individuals/International-
Taxpayers/Forei...](http://www.irs.gov/Individuals/International-
Taxpayers/Foreign-Earned-Income-Exclusion)

~~~
auctiontheory
As has already been stated many, many times, for most Americans living abroad
who are not super-rich, the issue isn't the taxation - it's the complexity
(and associated penalties) of the reporting requirements.

Basically, the US government's attitude toward Americans living outside the
US, much like the US attitude toward non-Americans wherever they live, is "F
__* You. "

Perhaps you think that this attitude is somehow justified. As a US citizen
myself, I think that it is detrimental to long-term US interests.

~~~
martey
> _Perhaps you think that this attitude is somehow justified._

I think it is a complex issue, and should not be dismissed as "not making any
sense" or the government wanting to screw citizens living abroad over. As I
have already stated, it is clear that the purpose behind the legislation is to
prevent unreported income from being stored in foreign bank accounts.

Like with many complex issues, I think the current solution is imperfect and
could be improved. Stating that it is stupid is not constructive.

~~~
auctiontheory
I didn't say it was "stupid" \- don't put words in my mouth. And I completely
understand the bureaucratic purpose behind it.

The reality is that the truly rich (like Mitt Romney) have plenty of legal
ways to shield their income, offshore or otherwise. So these regulations screw
(the vast majority of) Americans aboard with relatively modest incomes, while
they are ineffectual against the rich few with tax accountants on their
permanent staff.

tl;dr - these rules create more harm than benefit.

