When a slave owner allows a slave to buy back his freedom, he must consider the economic loss to himself. Thus, he may consider the price of manumission to equal the future potential profit that he could make from the labour that the slave provides to him. In this way of thinking, it is clear that $2350 renunciation fee is still pretty cheap. Since the US federal government profits from the US citizen–because in the Internal Revenue Code a US citizen is by definition a taxpayer. It is therefore only right that the US government should try to recover its real costs in losing a taxpayer citizen.
The average taxpayer pays every year about $11,000 in federal taxes, and over the course of 50 year working career that would be a total of $550,000. Of course, if you take the US State Department at its word, the actual cost of processing a US renunciation is $2350, so the true cost of full manumision/renunciation really should be $552,350–but in that light $2350 is merely a rounding error. It may be of interest to know that the citizenship application fees are much less than the renunciation fee (see Why It Costs Immigrants $680 to Apply for Naturalization: Critics argue that the fee is too high, discouraging green card-holders from becoming full-fledged citizens). So I don’t actually believe John Kerry’s State Department when it says that the $2350 fee actually reflects the true cost. Logically, it should cost more bureaucratically to investigate a citizenship application thoroughly than to rubber stamp a citizenship renunciation.
The true cost of renunciation is the staff overhead for the five minutes that it takes for a Consular Official to receive the renunciant’s oath of renunciation and about ten minutes of paperwork (filling out the CLN, putting the Consular stamp on it, and handing it to the renunciant). All of the other processes involved in renunciation are the makings of the State Department’s own C.Y.A., and I don’t see why a renunciant should have to cover Kerry’s endlessly waffling bureaucracy. Being very jaded, I believe that the State Department is lying about the costs. I believe their reason for charging $2350 is that they can. US Consulates are booked up for months at a time for renunciation appointments. The $2350 fee hasn’t seemed to cause unhappy citizens to cancel their appointments. This kind of price setting is called in economics, the “Law of Supply and Demand”. The State Department has a complete monopoly on the supply of the product, Certificate of Nationality (CLN), and there is great demand for it, thanks to citizenship-based taxation and FATCA. So essentially, they can keep raising the price until people stop calling for appointments. It is when there are no more bookings for renunciation that the State Department will have set the price of manumission too high for the remaining US citizens, who will prefer remaining in slavery rather than paying for their freedom. Or perhaps, disgruntled citizens will no longer be able to cover the cost of manumission–already some are complaining that they cannot afford $2350.
Now everyone needs to remember that if they commit a relinquishing act, quite outside the purview of the State Department, they can just simply obtain a CLN by informing the Consulate that they are no longer a US citizen (at least for now there is no fee). However, if you are unable claim a relinquishing act, think of the $2350 as a small price to pay for your freedom. In essence, the United States sees a renunciation as an act of freeing yourself from perpetual tax slavery. It greatly angers the US government–the same as slave owners become angry with runaway slaves. Therefore, this trend of increasing the fee for renunciation has only just started. Before 2011, the fee for renunciation was zero. Then the State Department started charging $450. Now, in 2014 it is $2350. But I say that $2350 is a small price, when some of the cross-border accounts charge over $2000 to do simple US tax returns. At the current rate of fee increase (522% every 3 years), we can expect that by the year 2017, the cost of renunciation will be $12,275. So get your freedom now while it is still well below cost. If you want an investor’s explanation of this, consider Benjamin Graham, The Intelligent Investor. If manumission costs $2350 while it is worth $550,000, it is a value investment.
Consider it done. It is supposed to be viewable once it is approved.
Do you know where the approved comments are viewable? I have looked in vain. It seems so weird that they record only 34 comments.
I can’t seem to find it either. Once your own is approved, you can view that, but I don’t see how you can view other comments on the document.
I’ve heard estimates as high as $200 trillion in unfunded liabilities.
I submitted the comment under my name but I added,
This fee is reminiscent of a pimp who requires a prostitute to get permission and pay a $2,350 fee to quit making money for him.
#FATCA deserves a #FATWA!
I’ve tried to find the posts also without success. I posted two weeks ago and there were, maybe 25 submissions. If you read along the right sidebar on their site they offer quite a few reasons for rejecting/not including comments. Rather suspicious that there are only 33 comments in all this time and no way to read them. Another grrrrrrr moment, there are many!
Thank you so much, Kathy!
Ricard: I couldn’t find a way to read the comments either.
The fee is very high and I am sorry I was unable to get my French husband fully on board when I set up my first renunciation appointment which was for June. He was unable to fully absorb that he was also targeted and kept saying, but how will they find you, what will they do, etc. Truly we are unimportant and it will take them forever. I admit FATCA is insane and hard to fathom. I myself had to digest it slowly bit by bit and my husband was using common sense. Some American friends who also refuse to comply (we have never paid US taxes, why start now) are just keeping a low profile and I hope this will work out. But the bell has tolled for me and hubby.
On 20 Sep I got a letter from our bank, explaining FATCA and saying I must, within 30 days, either prove that I am not a US person or prove that I am filing an IRS tax return. OTHERWISE THE BANK WILL TURN OVER ALL OUR PRIVAT BANKING DATA TO IRS VIA FRENCH TAX AUTHORITIES. How subtle is that? I wrote them a menacing letter and am closing all bank accounts with my name. I have a renunciation appointment for 24 October in Marseille. My ransom as a hostage is now $2350? I am worth every penny of it.
@Lucieaubrac, would you mind sharing the name of the bank?
@Lucieaubrac, please contact Frederic Lefebvre, representative of the French abroad.
He has been vocal about FATCA. He needs testimonies like yours and your husband to protect the rights of people like you and your husband who does not have any ties to the US except being married to you.
The bank is ING Direct, France. I have the Lefebvre transcript from the last Assemblé session and we are preparing to send him all our correspondence. Have already contacted our Député and Sénateur for the second time because they did not reply in April.
As soon as I scan the bank letter (it is in French of course) for Lefebvre I can also send it to Isaac Brock Society. Hope to have all accounts closed and all money transferred to new husband account by next week.
Bravo FATCA. I am going underground until I can become a NON US Person. The perfect tax evader. And proud of it.
Note to readers. I have lived outside the the USA for 50 years+. Only the absurdity, cost, and hassle of losing my citizenship are in the balance. No tears here.
“Note to readers. I have lived outside the the USA for 50 years+. Only the absurdity, cost, and hassle of losing my citizenship are in the balance. No tears here.”
Brava, Lucieaubrac. No tears here either, and I think the US would do well to be very concerned about so many (as well as their children and grandchildren) who feel no sorrow or compunction to renounce or relinquish what once was the magic, golden ticket…
I have contacted Lefebvre and sent him a copy of bank letter. Bank letter and my email to Lefebvre are of course in French. Would Isaac Brock Society like copies? If yes, how should I do this? Too big for a post surely.
Thanks for suggestions.
Or maybe to Franco-American Flophouse and they will transfer the info back to Isaac?
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I live between the US and France, my French bank just demanded info from me as well (BNP). I got the letter late, and got it sent back late (it came back to me twice for some reason) but I wrote them a letter to go along with the form. Crossed out US Person and put American instead. Don’t know if they care. Anyway.
Where did they get that number, $11,000, as what the average person pays each year? I sure don’t pay that much!
Isn’t there any way of getting the US to adopt the same tax policies as nearly every other country in the world? Residency based? And maybe make them less complicated, while we’re at it? I mean, nobody can even READ the whole darn thing.