Crime in the Suites http://t.co/HQ6s1oWLYz – Summary of #CBT#FATCA and acknowledgment that #Americansabroad renouncing citizenship is bad
— U.S. Citizen Abroad (@USCitizenAbroad) March 28, 2014
This is an interesting article that includes:
Some may think that 3,000 people renouncing their citizenship is a drop in the bucket, nothing to sneeze at, and small potatoes. The number of renouncers doesn’t compare to the 1 million who are legally immigrating to the U.S. every year. “Goodbye and good riddance,” some have commented.
But the trend is more troubling than it may appear. By raw numbers, the U.S. may be averaging a 997,000 surplus in immigrants versus emigrants, but Uncle Sam’s tax roll will not reflect the same surplus. The people who are renouncing their citizenship tend to be on the wealthier side. Not all are Eduardo Saverins (the Facebook co-founder who emigrated to Singapore “for business reasons” i.e. to reduce his tax liability). But expatriates are undergoing the pains of renunciation because they have greater than average networths and they see the writing on the U.S. budget deficit’s wall (many surmise that FATCA is an attempt to curb the deficit). The people who are immigrating to the U.S. tend to be those who are looking for opportunity, education, etc. They are bringing wallets full of hope, not gold. And when you recognize that the top 1 percent of American earners pay about 37 percent of all the federal taxes, a few thousand on the wealthier side become statistically significant.
A very popular phrase bandied about by politicians is that you can tell the health of the nation by the number of people who want to come and stay. That immigration reform is an issue, to many, means we have a good thing going here in the U.S. that others want to be a part of. But when the nation’s wealthy start opting out of the American dream, when they start thinking our borders as made of kryptonite, it’s time to pause and reflect.
“Imagine one day waking up and realizing that a certain nation is proclaiming you are their citizen, and that you owe them taxes on your past, present and future income, even though you’ve perhaps never even set foot in that nation! For many so-called “accidental Americans” this is the reality.
One example is that of Julie Veilleux. When she discovered this startling news, she marched to the nearest US embassy to renounce her citizenship. After all, she had lived in Canada since she was a young child, and the middle-aged woman didn’t know she carried dual citizenship. Regardless, renouncing citizenship wouldn’t absolve her of the many “penalties” the Internal Revenue Service (IRS) will claim she owes them.
Accidental Americans are particularly flustered by the new American tax regime, FATCA, which comes into effect in less than 100 days. It seems every couple of years the IRS has to change the tax code for Americans abroad. Goes to show how incompetent and disorganized government agencies are, and also why they must depend on violence. This new regime entails a worldwide push to get every last penny out of Americans abroad, as well as everyone holding dual citizenship…even if they don’t know about it!
The US government is desperate….”
http://dollarvigilante.com/blog/2014/3/27/accidental-americans-in-the-age-of-fatca.html
The Boot-Strap Expat
http://thebootstrapexpat.com/
Unfortunately, this article still feeds into the myth that even though we may not be Edwardo Savarins, we are elites by definition, when we are portrayed as wealthier than those immigrating to the US. I personally know plenty of people who would rather make their mortgage payment or feed their kids than make the cash outlay it would take to renounce citizenship, and I bet my bottom dollar that they make up the majority of US citizens living outside the US.
It is an average of 5 renunciations per median sized country per week. 190 countries. 1000 renunciants per week.
The US sh*theads in Congress may think let people renounce and walk out as the door slams shut, however, the US will be left with no ex-pats abroad and their knowledge of overseas markets.
It’s regrettable a country turns against their ex-pats and the response is in kind to the US – stick it.
@Alex Z
I chuckled at this..
“An American passport is like the branding of a cow.”
Yup! There’s no easy or cheap method of getting rid of it.
This article is mixing apples and oranges.
According to the OECD, the US tax system is the most progressive in the world, by far, even counting the regressive consumption taxes. This means that, contrary to what the media says, the “wealthy” do pay much more than their “fair share”, and thus the system is critically dependent on a relatively small number of people. So if the “top 1%” left the US and took their wealth with them, the tax revenue would decrease about 30%. That part is true.
People are renouncing citizenship in record numbers. That part is also true. However, the people doing this are not, by any measure, the “top 1%” of the US population. The vast majority of them (if not all) have been permanently living in other countries for years or decades. Even if they are wealthy, they are residents of other countries anyway, so they already pay taxes to those countries and as a result do not owe any significant taxes to the US due to the FEIE and FTC. The US tax revenue from these people is insiginificant whether they are US citizens or not.
What few people seem to understand is that the people renouncing are not part of the US population.
Here’s another crazy thought. Have someone walk into the US Embassy and report a ‘US Person’s’ death. A death certificate shouldn’t be too difficult to make. That would be quick and easy way to renounce. It would open a whole new investigative section for the IRS, making sure people are really dead for tax reasons.
If you renounce and have more than $2 million in assets, the IRS wants its pound of flesh. I would think that the wealthy among the ex-pats will avoid renouncing as it is too expensive. Better to suffer the indignities of FATCA, filing with the IRS etc. I would think most who renounce, like I have, have under $2 million in assets. Pretty typical though that there is so many misperceptions out there. The writer does not even know what “nothing to sneeze at means” (that something is of importance rather than the opposite).
There was an article somewhere online that said that America is also gaining many millionaires, along with England and Singapore. I think the number was something like 42000. So in that case- those leaving won’t matter that much.
Just found it- on RT.com. “Millionaires migration: top 5 destinations”
Again with the myth that it is the wealthy renouncing.
And this article was trying to be sympathetic. With friends like this…
Yes, it’s a shame the myth of the wealthy islander expat is mentioned since under lying most of the problems we have is that congress seems to believe that myth too. They have zero clue who their expats really are and have just “gone with it” in regard to law making based on this myth.
@AtticusInCanada,
Government by myth rather than fact seems to be common these days. Like the U.S. Congress, the current Harper government here in Canada has cut back on government funding for scientific fact-finding and prefers to legislate on the basis of ideology and belief, whether factually true or not. Just as members of Congress have little knowledge of their expats, members of the Harper government seem to have little knowledge of Canadian citizens with dual U.S. nationality.
Agree with foo. Articles like this are nothing more than deeply unhelpful examples of the Homelander false dichotomy that immigrants are somehow “opposed” to emigrants, and that tax fairness is a zero-sum game whereby screwing emigrants means “helping” immigrants and vice-versa. It goes against everything we’ve been pointing out here on this website for years: that ordinary immigrants and emigrants alike are being screwed by the U.S.’ “foreign assets” witch hunt.
What I have trouble with too is that they seem to not realize they are talking about people’s lives. They always mention the renunciation numbers are going up and then say “don’t let the door hit you” or some other silly remark based upon a fallacy. Then they will say “So what, we have x number of people coming here!”
There is no value of the individual. No discussion of what the U.S. is doing to these individuals. Just denouncing, demeaning and shouting of wrong headed talking points. U.S. persons in the home land love to see themselves as generous and standing for all that is right and yet if their government causes harm to anyone they spout reasons why the victim deserves it. It frightens me at times the level of narcissism and divorce from caring and thoughtful comment. I feel like I’m talking to floating heads where the mouths move but, nothing of any substance can come out of it. All the while they are so sure they are right about everything.
Americans must feel incredibly threatened and frightened in their protectionism these days judging from their comments. One thing this experience has taught me though is that they despise their expat community and for the most part their immigrants too. I knew there was resentment under the surface but, FATCA has been the excuse they’ve been needing to really let us all have it. It certainly is ugly but,it makes one have to face facts. They hate you, you deserve whatever they are doing to your family so go along or get out and shut up. That’s who they are showing themselves to be which at times makes me feel completely justified to renounce. Why should you stay linked to those who despise you? Waiting for them to come to their senses? Hoping one day they will see value in expats? It’s not going to happen in my life time. Once you move and live somewhere else thinking you are still one of them is clearly an illusion since they certainly do not think of you that way at all including the government.
Great thoughts Atticus. For Narcissists, they sure don’t like their reflection, do they?
I like the way you state things, Atticus. For years, long before FATCA existed, I always said that my homelander in-laws not only could not understand that we have chosen to live somewhere else, they’re completely insulted by the fact. This certainly puts FATCA into perspective.
@bubblebustin, they might not like their reflection a we see them but, they adore the false image of themselves to a slavish degree. I just refused to be Echo to their narcissus and of course the narcissist must seek to punish their “possessions” and “objects” for daring to declare themselves independent and in doing so stop being an appliance like a toaster which only serves to function for their pleasure. Once you stop reflecting back to them what they want you to and stop going along with the carefully crafted story you are fair game for smearing.
@Pierre, yes before FATCA I always felt I had to somehow prove something to home lander relatives. I never really questioned too much why I felt I had to do that. Deep down I knew it was because I was seen as lesser than for not living there but, could not admit that to myself fully until I was slapped in the face with it. Hard and cold but, true and to this day they don’t believe that’s the sort of persons they are. It’s like a cult in some ways though it pains me to say so. We were apostates the day we moved over their border.
@AtticusinCanada
Every narcissist sees others only as an extension of themselves. In that sense – one only has value if one is of service to the narcissist. And without being a function of the narcissists needs – one is without value for them.
Over this past century so many countries have been forced to emigrate because of political injustices. I am thinking of WW2 and the people who gave up their personal belongings and businesses. I can go on naming countries that caused people to flee with nothing left but their soul. North America was a safe place to run. It is no longer safe here with the likes of the US and Canada’s political handshakes. If we don’t pay attention to this and I mean all Canadians need to be involved, the US will inflict their rules such as get rid of socialized medicine and on and on. Only then will we pay attention. Harper has to go! He is a danger to Canadian Democracy.
First they came for the Socialists, and I did not speak out– Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out– Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out– Because I was not a Jew.
Then they came for me–and there was no one left to speak for me.
Credit to Martin Niemöller
bubblebustin,
Over and over again, we need to say this. After the US Persons, who will be the next Canadians?
Which can be accessed at the link here: http://isaacbrocksociety.ca/2014/03/18/levin-and-mccain-ask-for-extradition-of-swiss-bankers-have-they-read-the-swiss-federal-constitution/comment-page-2/#comment-1256530.
The whole read at the link (that I think Chears provided) is very, very worthwhile and relevant.
@AtticusinCanada – I don’t believe that the “wealthy islander expat” myth was accidental in any way shape or form. It was carefully created and crafted to swell a support for going after those “wealthy tax cheats”. In narcissist terms, this is known as “gaslighting” – (I am a “narcissistic abuse” survivor (my mother was one) a statement created to divert attention from their own misspending habits or in human terms: their own abusive behavior – “See…there’s your golden egg! Those dirty expat tax cheats are keeping it from you. And we’re going to get it for you.” And like sheep, the unfortunate and needy fall into line and start spewing vitriol against “those wealthy tax cheats” like the little narcissistic enablers.
I suffered through systematic destruction of my own self-worth at the hands of my mother (it took a hell of a lot of counselling and learning again that I was worth something that enabled me to step back from the brink and I am damned if the United States Government is going to perpetrate this abuse on me or on my family.