I describe this in more detail at the Overseas Exile blog, but here’s the issue in a nutshell.
For the first three quarters of this year the Federal Register has reported a little over 1,000 renunciations. However, one Swiss site reports that the US embassy in Switzerland has processed 411 US renunciations. This would mean that Switzerland, with somewhere between 2 to 5% of the world’s US expats, is reporting over 40% of the US renunciations. Perhaps the US expats in Switzerland have more wealth, but that 40% seems ridiculous.
However, Fox News has a story where unnamed “immigration officials” report a projected 8,000 US renunciations this year. If true, Switzerland will have approximately 5% of the world’s renunciations, a figure which makes much more sense.
So, how do we find out who these immigration officials are? Where did they get their numbers? Why is every indicator suggesting that US renunciations are increasing but the Federal Register reports that they’re way decreasing?
Unfortunately, the renunciations numbers are being used by various groups for their own purposes, none of which are doing us any good. Stories like the Fox News one (the same one appeared earlier at a different site) which suggest the number is higher (8000 is mentioned) are using it to advance their agenda by suggesting that all these renunciants are rich (i.e. successful) homeland americans who are leaving because they are being overtaxed.
I don’t have any comments about those (rich homelanders) people, although I suspect they make up a very small proportion of whatever the number really is, and I don’t think a discussion about whether they are justified is helpful to us. It is not a reflection of who we are, and that argument doesn’t do us any good. since it implies we are all “rich Americans who don’t want to pay their fair share”
The smaller numbers may ” be correct” in the sense that they may reflect what information actually gets to whoever produces the official statistics but they are almost certainly too small, However, the government has no interest in correcting them because they want to maintain the fiction that it’s not really that many people.
The reason it does matter is because it is hard to convince homelanders, who are really the only people who have any power to change things, that this is a problem, unless they see accurate numbers. As long as they see only a small number of people renouncing, they can just dismiss the whole thing as insignificant.
That is a good point. I’ve been a non-USC for so long that I tend to think, just let your people go and I don’t care what you say the numbers are. But your comment got me thinking about how the low figure is used for basically propaganda purposes.
Of course, many dual USCs would like to remain USCs, and if citizen-based taxation (particularly punitive-based and convoluted citizenship-based taxation) were abolished, that would be possible for them.
So, by lowballing the renunciation numbers, govt
US deflects attention from the basic problem of citizenship-based taxation and make it easy to demonise those who chose to leave as a small, select group of global elite ultra-rich tax cheats.
For years I never thought one way or the other about the
US’ citizen-based taxation policy because I had long ceased to be a USC when I first heard of it about 25 years ago. Generally people don’t spend much, if any, time thinking about particular laws of foreign countries.
Fast forward to 2011 – nightmare! – and, of course, if it weren’t for citizen-based taxation, the US would never have been interested in trying to reinstate the citizenship of all of us who relinquished in the past. (I did realise that from day 1 of finding out about this retroactive mess.) And of course they demonise us too as global elite ultra-rich tax cheats. Dual citizen, former citizen, soon-to-be-former citizen, the problems we face today all have their root in citizenship-based taxation.
So, I get it. Lowballing the number is not simply to make the country look good (less bad, whatever) but also to deflect attention from the devastating realities of their unique citizenship based taxation policy.
I do think, though, that no matter what official numbers are released, that the true numbers are so high that they’re going to become evident (also that almost without exception, renouncers are everyday people, not the super-rich). It will just take longer.
@Canuk Doc and @pacifica,
Thanks for emphasizing what the renunciation and relinquishment numbers mean for US PR.
I would like to see USPs abroad given a choice, a real amnesty, so those who want to retain their US citizenship with their whatever other dual citizenship, from that moment of choice, know and buy into the tax and reporting requirements for the privilege of holding dual citizenship with a country that practices citizenship-based taxation. That’s the choice for many.
It is not the choice for me and many others — let us more easily have the chains broken so we can get on with our lives, to continue to be honest, tax-paying, contributors to our societies as citizens of the countries we have chosen.
Instead we are getting FATCA and IGAs entered into by our “other” countries’ rolling over to the US demands at great cost to their economies and great cost to their soveriegnty and privacy laws.
Meanwhile, the real ‘tax cheats’ most likely have found other ways to do what they do, including within the USA.
It’s sad isn’t it. But think of us as the “lucky ones” because we ALREADY live in other countries and either have a new citizenship or about to get a new one(s).
Pacifica — The true numbers are so high that they’re going to become evident
You are correct that the magnitude of renouncers/relinqishers must become apparent, sooner or later. “True numbers” is another matter. When the accountant cooks the books, or revels in gross incompetence, the actual numbers can never be ascertained. Obfuscatory computation constitutes the distant early warning of a state to be shunned. Renounce now or regret later!