Thousands of expat Americans renouncing citizenship to avoid new tax laws

[edward222]

Credit to: Tax News : Thousands of expat Americans renouncing citizenship to avoid new tax laws

As the start of FATCA looms, Americans living permanently overseas are rushing to renounce their US citizenship.
The IRS’s five-year campaign to uncover undeclared, taxable assets held by US expats is having an unexpected result,
as many middle-income Americans living abroad are deciding to hand in their citizenships. Those who renounce are due for unpaid
taxes in the two previous years, but most are more concerned about the effects of drastically rising taxation on themselves and their
families in the future.
Immigration law attorneys believe the increase in numbers of renouncees is being caused by anticipated future changes as well as
the problems of banking overseas once FATCA kicks in. A good number of overseas banks are now withdrawing existing banking services
from US expats and refusing to take on new accounts due to the demands of FATCA reporting.

Ow... The people are getting wiser 

[RustyNomad]

Guess I would be doing the same if I had US citizenship but lived outside the US.

The problem with the US tax system is that it taxes their citizens based on the fact that they are citizens and not based on residency. If it was based on residency then you would have no problem if you were out of the country for 6 or more months as no taxes would then be payable back in the US.

A good number of overseas banks are now withdrawing existing banking services from US expats and refusing to take on new accounts due to the demands of FATCA reporting.

This seems to be the trend. Already plenty of brokerages that no longer take on US citizens and this can also be seen in the bitcoin ecosystem.

[countryfree]

Yes, I remember reading an article on that subject in a Swiss newspaper. I also remember they gave the number of 1200 people. They were Swiss-American people, they're only Swiss now. I understand those people very well. An American passport is worth money for sure, but why pay for it if you have no plan to ever go back there.

I think Boris Johnson still have an American passport.

[pattu1]

Individuals are just following what companies have been doing for ages now.
Reverse Mergers were big tax-saving instruments some time ago.

[Cereberus]

Where do the majority of these us citizens migrating to? I would think thy would be found out if they are still close like mexico or the bahamas.

[freedomno1]

It makes sense if the US government is not giving you any benefits while your living outside of it's country besides a Passport, why pay taxes for services you are not going to use.
As long as the passport is good may as well just become a citizen of the country you emigrate too any pay their taxes not get double dipped on.

[Possum577]

This isn't "new" news, but it is important and interesting.

The US tax laws penalize citizens for working outside the US and doesn't offer much greater benefit in terms of services by way of that citizenship or taxes paid than can be found by other countries. I think the real penalty comes at the higher income levels anyway.

Any articles out there about people regretting renouncing their US citizenship?

[More Bitcoin]

It makes sense if the US government is not giving you any benefits while your living outside of it's country besides a Passport, why pay taxes for services you are not going to use.
As long as the passport is good may as well just become a citizen of the country you emigrate too any pay their taxes not get double dipped on.

It is based on the rights to use. If you are American citizen, you rights to use the service any time later. You are also protected by the American Military all over the world.

[pattu1]

Where do the majority of these us citizens migrating to? I would think thy would be found out if they are still close like mexico or the bahamas.

Found out? They are renouncing their citizenship. Legally.
Then they just obtain the citizenship of another country and continue with their lives.

[Amph]

well no one want to pay taxes, because they are a bit like scam in my view, we are paying for something that maybe we will not utilize in our entire life

for example it can be that the taxes you pay are going to contribute to the build of a subway that is miles ahead from your location, how this is useful to you? it is not, it's a legalized scam...

[pitham1]

well no one want to pay taxes, because they are a bit like scam in my view, we are paying for something that maybe we will not utilize in our entire life

for example it can be that the taxes you pay are going to contribute to the build of a subway that is miles ahead from your location, how this is useful to you? it is not, it's a legalized scam...

If nobody paid taxes, you do realize how society would look like right?
And a person who pays no tax (cause of low income) has as much right over your hypothetical subway as billionaires who pay a lot in taxes.
The taxes you pay are used to pay salaries of cops who make sure your home is safe, of the army which makes sure your country is safe.

[acquafredda]

well no one want to pay taxes, because they are a bit like scam in my view, we are paying for something that maybe we will not utilize in our entire life

for example it can be that the taxes you pay are going to contribute to the build of a subway that is miles ahead from your location, how this is useful to you? it is not, it's a legalized scam...

Where do you live? Have you ever been to an Hospital? Who do you think pays most of the salary to those people? And who pays the infrastructure, buildings, cars......?

Taxes are scam, as you say, when you pay too high and you have have nothing or very little in return. But when the system works a bit you'll be glad of paying taxes when you're going to use, for example, the healthcare system.

[Mickeyb]

This is the only way to keep in check this sinking ship. When there is no money in the country and when your debt is growing constantly the only way is to take from the ordinary people.

The only thing is, how long will people give? How long until they don't go crazy and say enough is enough? Governments are playing a dangerous game here but I guess this is the only game that they got left.

[Amph]

well no one want to pay taxes, because they are a bit like scam in my view, we are paying for something that maybe we will not utilize in our entire life

for example it can be that the taxes you pay are going to contribute to the build of a subway that is miles ahead from your location, how this is useful to you? it is not, it's a legalized scam...

If nobody paid taxes, you do realize how society would look like right?
And a person who pays no tax (cause of low income) has as much right over your hypothetical subway as billionaires who pay a lot in taxes.
The taxes you pay are used to pay salaries of cops who make sure your home is safe, of the army which makes sure your country is safe.

i'm not saying that no one should pay taxes, i'm saying that i want to pay for what i use, not for what others use, why i should pay for the privileges of the other?

[botany]

i'm not saying that no one should pay taxes, i'm saying that i want to pay for what i use, not for what others use, why i should pay for the privileges of the other?

In economics, there is a term called "public good", which has to be paid for through taxes or collections from individuals, whether they use the good or not. Consider a street with ten houses with a streetlight. A particular user (say X) might claim that he does not want to pay for the streetlight because he does not use it. But it is impossible to deny him the benefit of the streetlight, even if he does not pay for it. Moreover, because X benefits from the streetlight does not mean that the remaining users are negatively impacted in any way (the resource does not decrease because X uses it).

These "public goods" have to be financed through taxes; there is no other way. 

[Amph]

i'm not saying that no one should pay taxes, i'm saying that i want to pay for what i use, not for what others use, why i should pay for the privileges of the other?

In economics, there is a term called "public good", which has to be paid for through taxes or collections from individuals, whether they use the good or not. Consider a street with ten houses with a streetlight. A particular user (say X) might claim that he does not want to pay for the streetlight because he does not use it. But it is impossible to deny him the benefit of the streetlight, even if he does not pay for it. Moreover, because X benefits from the streetlight does not mean that the remaining users are negatively impacted in any way (the resource does not decrease because X uses it).

These "public goods" have to be financed through taxes; there is no other way.  

well that is wrong for me, this is not fair at all, and it is the reason why i hate taxes, and because of this i will make everything in my power to avoid paying tax as much as possible, on every little things

your example is more biased because streetlight are everywhere(so i actually need them too), but there are things that i'm not using at all anymore, like bus in the city, or subway like i said, i'm travelling only with my bicycle

so why i should pay for something that i'll never use? no sense, if they don't want to fix this, i'm going to evade in some way, i don't care

[acquafredda]

i'm not saying that no one should pay taxes, i'm saying that i want to pay for what i use, not for what others use, why i should pay for the privileges of the other?

In economics, there is a term called "public good", which has to be paid for through taxes or collections from individuals, whether they use the good or not. Consider a street with ten houses with a streetlight. A particular user (say X) might claim that he does not want to pay for the streetlight because he does not use it. But it is impossible to deny him the benefit of the streetlight, even if he does not pay for it. Moreover, because X benefits from the streetlight does not mean that the remaining users are negatively impacted in any way (the resource does not decrease because X uses it).

These "public goods" have to be financed through taxes; there is no other way.  

so why i should pay for something that i'll never use? no sense, if they don't want to fix this, i'm going to evade in some way, i don't care

What you are saying makes no sense at all! Do you know how much it will cost you to pay taxes on "what you use basis"?
You should then pay for the roads you drive on, the hospitals you go in and so on.

I think you are only trolling. I can't really think this way.

You say you don't care but I think you use a lot of what people pay in taxes.

[gentlemand]

I'd love to hear the experiences of those who have thrown in their citizenship. That must be a very strange feeling being just another foreigner in your own land. Maybe there should be a sliding scale of how welcome you are. It probably starts off as a great idea but if you can't get back in to see your old dears croak you may have preferred to swallow the paperwork.

[oblivi]

Now we only need them to learn Bitcoin and store their wealth there before US collapses and banks all over the place start bailing out money from people's hard earned savings.

[botany]

I'd love to hear the experiences of those who have thrown in their citizenship. That must be a very strange feeling being just another foreigner in your own land. Maybe there should be a sliding scale of how welcome you are. It probably starts off as a great idea but if you can't get back in to see your old dears croak you may have preferred to swallow the paperwork.

I don't think these people remain in the US. If you are a US citizen and work abroad, FATCA rules still apply to you. But if you renounce your citizenship, then they don't. This is the reason why Americans staying abroad think it makes sense for them to renounce their citizenship.