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Americans abroad rejecting US citizenship as tax hikes loom

 
 
 
 
 
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The number of Americans who decided to renounce their citizenship in the second quarter of 2013 increased sixfold the same period in 2012, a number the federal government attributes to strict impending financial disclosure rules.

The United States is the only country out of 34 in the Organization for Economic Co-operation and Development (OECD) that continues to tax citizens regardless of where they live around the world.

Now, facing a high national debt and drastic cuts in government spending, US tax enforcers are employing stricter asset-disclosure laws under the Foreign Account Tax Compliance Act (FACTA). For that reason, more Americans living abroad are weighing whether it is worth holding on to their US passport.

In the three months through June, 1,131 American expatriates turned over their passports at US embassies around the world. It was a drastic surge from the same time span in 2012, when just 189 people renounced their citizenship, according to the Federal Registry. The first six months of 2013 alone has seen 1,810 such instances, compared to 235 in all of 2008.

“With the looming deadline for FACTA, more and more US citizens are becoming aware that they have US tax reporting obligations,” Matthew Ledvina, a US tax attorney in Zurich, Switzerland, told Bloomberg. “Once aware, they decide to renounce their US citizenship.”

In 2012 there were between 5 and 6 million Americans who resided overseas.

Under FACTA, foreign banks are required to notify the US Internal Revenue Service (IRS) about accounts held by US taxpayers. That disclosure rules, according to the congressional Joint Committee on Taxation, was estimated to generate an additional $8.7 billion over the next 10 years for the US budget.

A primary goal of the rules is to cut the power of US nations the US considers to be tax havens. Countries like Switzerland earn that designation by protecting an individual’s finance information, requiring only nominal taxes, or a general lack of transparency.

“The United States wishes to ensure that all income earned worldwide by US taxpayers on accounts held abroad can be taxed by the United States,” the Swiss government stated earlier this year.

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  • Zharkov

    No surprise, as Congress and Obama make conditions in America impossible to tolerate, more people will leave who can afford to leave. Government is the problem.

  • Leech

    When the US goes completely communist, what other countries will still resist? And how long before they are attacked with “Arab Springs” and “Color Revolutions” paid for involuntarily by US taxpayers?

    • Jon

      =)) . You do not know what you are talking about. US will never go communist because that would mean that everything belongs to people! Communism means you work for free and get everything for free! It is impossible. Never existed anywhere. The USA goes nacizm: concentrated camps and liquidation of people. Cannot you see it?

      • Leech

        How much proof does one need to see that America has become socialist, with elements from both communist and Nazi (National Socialist) governments, which communist governments usually implement, so going communist is entirely in our future.

        Property tax is a prime example. You pay money in America to keep the local government from seizing your land. So who really owns the land, you or “the people” who make up your government? That question is automatically answered for you when you stop paying them.

        Was the Soviet Union all that much different? Who owned the apartment blocks in Moscow? Who owned the factories? What happens in America to a factory which can’t pay their taxes?

        And if you resist, you are killed by your government and they take your property for their trouble, all with due process of law. Not much different from any other communist country, is it?

        National socialism was socialism, but only in slightly different form from communism. Disinformation agents (teachers) in public schools try to place them at opposite extremes, but the reality is that they were much the same in most respects, and one could quite easily see how Nazism can evolve into communism by a simple adjustment of property laws.

      • Joe

        Wouldn’t it be interesting if the U.S.A. went on to becomming a communist country or have this nacizm with concentrated camps with liquidation of people ? I wonder how the illegal aliens that were given U.S. residency or citizenship would react to these events ? I bet that they would leave the U.S.A. faster than they came here !

  • Joe

    $8.7 billion in taxes in ten years is like nickels&dimes to the free spending politicians ! I hope that the five or six million U.S. citizens successfully renounce their U.S. citizenship !

  • Josh Steeler

    Communism means not work for free. Look at Mondragon Cooperative or Coops in Spain. Communism, democracy and socialism stands on one bank where “public interests is put before selfinterests.” As Gottfried Feder stated. See also Silvio Gesell.
    On other bank stands feudalism, fascism with other names such as corpocracy. Feudalism transformed into fascism with East India Company where old aristocracy joined forces with merchants and turned their own interests into country interests paid by tax payers.
    http://www.redpepper.org.uk/The-mother-of-modern-corporatism/

  • Leech

    Academic distinctions between Nazism and Communism always omit the vast similarities between the two, and the ultimate fact that in actual practice, neither system advocates individual liberty.

    The US was created as a free republic in which the liberties of the private citizen were protected. Those liberties are no longer safe.

    Recommended reading on Communist America:

    http://www.wnd.com/2013/08/communists-in-congress-just-count-em/?cat_orig=politics

    • Joe

      @Leech. I agree with you !

  • Joe

    Why does Spain have such high double digit unemployment rate among the young adults ? Don’t you think that it’s impossible to have equal distribution of goods and pay according to work done under a communist and socialist / collectivist system ? Lets just say that you were a chef in a restaurant and you worked yourself very hard ten hours a day six days a week,that’s sixty hours,now the dishwasher worked thirty five hours a week for five days. With all the responsibilities that the chef has compared to what the dishwasher has,would it be fair if they both made the same salary of let’s just say four hundred dollars a week. Would that be fair to the harder working chef that has a lot more responsibilities than the lowly dishwasher ? Under a communistic system,everyone is suppose to be equal with equal pay regardless of work performed ! That wouldn’t be accepted in a capitalist system.

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