Don’t believe the hype about expat Americans ditching their passports, by Tim Fernholz.
Often “journalists” will write about those who renounce their citizenship without ever speaking to someone who has renounced. They react in anger at a perceived threat: filthy rich ungrateful Americans ditching the most precious citizenship in the world. Tim Fernholz is no exception. But I challenged him and he responded that I should have people email him at firstname.lastname@example.org .
@IsaacBrockSoc @FedupUSExpat please, ask them to e-mail me at email@example.com
— Tim Fernholz (@TimFernholz) February 13, 2015
Patrick Cain, a journalist at Global News, publishes a blog separate from his news stories. This is background information on his Global News story published on Jan 10, 2014 (not Jan 14, 2014 as written above):
More than 3,100 Americans renounced citizenship last year: FBI
Posted on January 10, 2014 by Patrick Cain
One of the most inaccessible data sets I’ve ever tried to get access to is basic U.S. loss-of-citizenship data held by the State Department. (It’s connected to a cluster of issues around U.S. taxation abroad which are fairly certain to get an airing early this year, as Canada’s federal government makes a decision about FATCA.)
For strange reasons, one of the better data sources out there on loss of U.S. citizenship is an FBI gun control database – people who renounce U.S. citizenship are barred from buying firearms (and explosives, and transporting dangerous goods across state lines), along with fugitives, convicts, drug addicts, people dishonorably discharged from the military and people subject to domestic violence-related restraining orders.
I wonder about the priorities of the congressman who put that at the top of his to-do list, but as an unintended consequence we have a window into an otherwise very secretive area of consular activity.
Thanks, innocente, for YOUR calculations and sending them on to this *journalist*. Also thanks for the Patrick Cain blog link. Patrick has done some good work on this issue!
@EmBee – The Gleaner did not publish the comment as one long one … so I broke it up into pieces and posted each piece separately. Those pieces now seem to have been posted. So if the Brock Squad want to go on over they can express their feelings or show their likes.
I see that SwissTechie has already commented.
The piece you wrote above would make a great Op-Ed for one of the major news publications.
Glad to see you got your comment posted — in pieces. I’ve up-arrowed every piece. I see the formatting went quite wonky on your comments. If you used DISQUS you might be able to edit out the multiple, misplaced “returns”. Good job!
I just commented at Jamaica Gleaner (comment is awaiting moderation.
Here it is just in case :
If people or companies seek tax evasion, it’s because of exagerated tax burden. All gouvernments find it perfectly fine to spend more and more money not knowing what they are really doing with it. They all find it perfectly normal to continue to raise taxes at extorsion rates up to 61, 70, 80%. WHO CAN REASONABLY EXCEPT SUCH A HIGH SHARE OF TAXES TO PAYE ??? No one.
And all the other small guys like me, the ones that are being caught up in FATCA and IRS compliance because of CBT, the ones that have worked hard abroad all their life to pay their homes and put a bit of money to the side to retire, the ones that CAN NOT afford to pay a tax expert to fill in complicated IRS forms, the ones that owe NO TAX to the IRS but may face HEAVY penalties wich they can’t afford to pay either ARE TRAPPED just because of the stupidest tax law that has ever existed : Citizen Based Taxation wich is illegal to the US constitution. Who the hell do they think they are in Washigton DC. I have one question to ask them : How is it possible that all gouvernments are deeper and deeper in dept while collecting more and more taxes. How an earth is that possible. What the heck are you doing with the money ???
One thing for sure is that the less money we have to spend, the more we all be in deep crisis.
A world taxation system leaves no competition between different countries, thus letting gouvernments tax us at higher and higher rates.
This is the middle ages. The ages where you had to posesse your own gold coins and hide them well from the king’s men.
@ calgary411: Seeing that a calculated 19% of dual-citizen Americans in Switzerland had given up their US citizenship was a surprise. After thinking this over, I then made a list of USCs I know who have expatriated here, made a separate list of those who haven’t and it’s about 25% so I think the calculated 19% is a reasonable figure.
The 800 expatriations mentioned by the former US Ambassador to the ACA for 2012 include long-term greencard holders. However, it does not include USCs who went abroad to expatriate and, based on social media reports, there have been many, many of those who wished to avoid waiting for an appointment in Bern. Frankfurt, Milan and Paris are easily reachable by train and there have also been reports of USCs flying to Brussels and Vienna and also such cities as Belgrade, all about an hour of flight time, to renounce.
Recently someone claimed that professional services firms have been putting pressure on USCs here to either renounce or find another job. Some clients are suspicious of Americans in these sensitive positions. I expect expatriations to remain popular for Americans in Switzerland for the foreseeable future.
I have heard of a few going to Luxembourg; it’s quick, friendly and a days drive from Switzerland with free parking right outside too! Spread the word.
@ nervousinvestor and Steven
The Gleaner article is gone — Page Not Found. I tried looking for a cache version but maybe I just didn’t do it right because all I got, again, was — Page Not Found. Not that I miss the article (it was pretty bad) but I hate to see your good comments lost too.
Just tried it again myself EmBee. You are right …. the page is truly gone. I know that the Editorial staff at the Gleaner are very pro Obama and Democrats generally … and I know that many middle class and upper class Jamaicans are scared “S*****ss” of losing their visas … and indeed may even quietly be Green Card holders or US Persons themselves. There is Commission of Enquiry presently being conducted in Jamaica into another situation where the Jamaican Constitution, Charter of Rights and wire tap law were rolled to accommodate a hostile US with the result that some 76 Jamaicans were killed in a Police / Military incursion into a part of Kingston … with a US Spy Plane circling over head BEFORE it was requested by the then Prime Minister … and with stories of US Special Forces being involved in “training roles” leading up to the incursion. What a world we live in … when the “good guys” behave badly.
@Embee – the good news is that the comments are preserved here at Brock.
Good grief! I just found an article about that horrible incident you are referring to. It could happen anywhere the “might-makes-right” cabal wishes to intervene. I would guess that C. Cook was in competition with CIA run drug ops.
@EmBee – indeed the same …. though the article has a lot of truth there are some elements that may not be so accurate as well.
One sentence “In 2004, the D.E.A. entered into a secret agreement with the Jamaican Ministry of National Security that allowed it to listen in on Coke’s intercepted phone calls. This led eventually to the extradition request.” That act of allowing a foreign power (or indeed anyone else other than the person authorized by the Court to do the tapping) was contrary to Jamaica’s Law. That in itself is a story and can be researched in the media reports that were written and commented on as this thing was unveiled piece by piece. Indeed the “Secret Agreement”, referred to as Memoranda of Understandings (“MOUs”), were so secret apparently they were unknown to the Cabinet of Jamaica at the time nor were they known to the succeeding Government under whose watch these events then unfolded until mentioned days down the line apparently by the US.
Another sentence “A current State Department official said that Golding’s administration was “obsessed” with the extradition. The campaign against the extradition was likely perceived by the Embassy as confirmation of Coke’s dangerously high standing with the Jamaican government.” There was in fact also the little matter that the Extradition was not properly formulated and delivered to the Government of Jamaica … not to mention was based on information illegally obtained (unlawful sharing of data from wire taps) … and there was the little matter of the Constitutional rights of the accused, Mr Coke. According to information available from a previous Commission of Enquiry on a related matter, the US, when requested by Jamaica, refused to reformulate the Extradition request and base it on legally obtained information and submit it through the proper channels for such instruments.
Mr Coke may or may not be a man guilty of various serious crimes … I have no knowledge other than chit chat in that regard …. I do however care that the Constitution of the Country be honored in respect of ALL Jamaicans.
Eventually, Prime Minister Golding, purported to waive Mr Coke’s Constitutional Rights acting supposedly in the greater interest of all Jamaicans due to the grave upset that the matter was causing on the Island and in International relations with the US who were said to be blocking and revoking visas of Society figures. Golding then ordered that the necessary warrants be issued which in due course resulted in this massacre.
When Coke was brought into custody he opted to waive his right to an Extradition Hearing … it is speculated that he probably did this to avoid spending much time in a Jamaican cell … a location where his own father had been burned to death mysteriously.
A sad performance all around. Distressing that the US could stoop to behaving in such a manner.
@Embee – The Gleaner article has reappeared. http://jamaica-gleaner.com/gleaner/20150215/focus/focus5.html
I wrote to Tim. Here’s what I wrote.
Dear Tim Fernholz,
You’ve requested via Twitter (speaking to the Isaac Brock Society account) that people like me write to you about our experience of renouncing / relinquishing citizenship.
Firstly, I just want to summarise my experience in some very short points without referencing your article (‘Don’t believe the hype about expat Americans ditching their passports’).
1. I married a UK citizen in the UK, and we settled in the UK.
2. I ensured I paid taxes appropriately – the US-UK tax treaty means that I pay full UK taxes, which is fair as I use UK infrastructure and services, not American ones.
3. I wanted my wife and future children to have the security provided by my being a UK / EU citizen, same as my wife.
4. I attained UK citizenship, having done in-depth research of the issue. FATCA never came up. I never intended to return to the US, and I never wanted my children to move to the US.
5. I raised the possibility of ditching US citizenship with my family, as being a general liability – something I had to manage, and which was tricky, thanks to certain rules I had found in my research.
6. My parents pressured me into keeping it. I also felt it would be complicated and possibly expensive to ditch US citizenship, with having student loans to pay off.
7. I was reading the paper one morning, and an article came up about record numbers of US citizens living abroad renouncing, due largely to FATCA. I just figured it was something for rich people to worry about, and thought I would look into it at my next tax return filling period.
8. I was prompted by someone to look into it sooner. I did.
9. FATCA was scary! Threats of $10,000 fines, invasion of my privacy, and even (due to holding joint accounts) invasion of my wife’s privacy, who is not and has never been a US citizen! I looked more into it, and without doubt, the threat to our security and privacy was real. There was no way not to involve my wife, even though she has nothing to do with the American Government, other than as a tourist or as my wife. If she knew she were marrying the US Government, she may never have married me, I suspect!
10. I reverted back to my thoughts of my numbered item 5 above – the time when I first thought that renouncing US citizenship was the most practical and logical step in having decided to be a UK / EU citizen. I don’t like the USA as a place, and I don’t really want to live there. Yes, I grew up there, but it wasn’t my choice. Europe is, quite plainly, better. So why should I even fill out a tax return form each year? Even the UK Government (Inland Revenue) does not make me fill out any forms at all, and this is where I live!
Ok, so my story doesn’t inspire that FATCA is the real threat here – I don’t like the USA, it’s true. I do, however, love my entirely American family, and I love many other people in the USA – even some strangers. Growing up there, there are parts of American culture I came to love. Quite a few, I hate (and I mean really really hate – I’m talking lobbyists running the Government, corporate greed, car-warship, wolf-hunting fanatics etc. – I’m not one of “those darned cahootin’ freedom hating terroriserists”, ok? Let’s have that straight.). But agian, there are many I love. I have many, many emotional and social ties to the USA, and in general, I would not have had any thoughts about renouncing US citizenship in the first place if America was not run by such a damned creepy, invasive, greedy, paranoid and xenophobic culture! I’d have just been a dual citizen – a silent citizen of the USA, but in all other respects, a Brit. Nothing wrong with that.
Let’s think of this another way. Had I been raised in the UK, and the shoe were on the other foot, the UK Government generally just lets you become a US citizen and disappear from monitoring by the UK Government – absorbed by the US’s requirements. There are no silly rules about which passport you use when enterring the UK, and it’s all pretty amenable. You’re just a dual citizen. The US, however, “does not formally recognise dual citizenship”, as has been stated in numerous guides and background documents to the rules. The US Government considers you a US citizen only, and will always consider any other foreign nationality to be invalid. As long as you don’t push the issue, the US Government only lets you keep it – it never recognises it.
This is just so backwards in this ever-shrinking, modern, globalised world. Families cross borders. People, like me, fall in love with people from other countries. Or less romantically, “shit happens”.
So let’s get back to it. FATCA is creepy. FATCA is greedy. FATCA is xenophic. FATCA is invasive, and it is morally wrong. To a regular guy like me (with some strong opinions about good vs. bad and what I like / don’t like), FATCA is scary!!
FATCA, to me, opened my eyes to some other scary things which were happening at the time and in recent years in the US. I heard that one crazy Senator or some such was proposing some sort of “foreign national registration scheme”, and was seriously putting some such bill to the floor! Whether it was this idiot or another, there was also some proposal for a blanket tax on US citizens living abroad! Americans are just targeting a minority group!
Let me go back to your article. Why do you think Senator Rand Paul is calling for FATCA’s withdrawal? Relative to your article:
A. it’s not because Americans renouncing citizenship is just “hype” – it is a threat to America’s credibility.
B. it’s not because the requirements on foreign banks are just “hassle” – they are a threat to certain Americans’ freedoms and fundamental right to carry on with their lives.
C. it’s not because the record number of Americans renouncing is a “tempest in a teacup” – it’s because the teacup represents the minority of conscientious, well-educated, law-abiding, ethics-driven people who will not have their rights infringed by an oppressive Government. (Scary to think of America as oppressive, isn’t it? But it is a slippery slope!)
D. it’s not because “income earned abroad… facilitated tax evasion and money laundering” – it’s because our money is taxed abroad, and our US citizenship is only there as a cultural link. There is no right or reason to tax us. If tax was owed, it should have been captured in the system prior to the money getting abroad in the first place. If it was earned abroad and is taxed abroad, the US Government shouldn’t get anything. Let’s be grown-up about it.
E. it’s not because we’re all “Eduardo Saverins” and “Roger Vers” – we’re just people. We don’t all become billionaire tax-evading chalet-owners the minute we cross the pond! We’re mostly just average jills and joes. Blanket rules that affect millions of us to capture a few rich people are just plain stupid.
F. and yes, there are lots of “accidental citizens” – since I’ve moved to the UK, I’ve met dozens of them. The “oh, yes, I was born in the US” conversation comes up a lot – as does my retort, “and do you know about FATCA… sorry to spoil the conversation!”
I’m sorry, but your article comes up far short of the mark of telling our story, or being on the right side of the moral line. I can’t really say much more than I have on that score.
I’ve taken this time to write you amidst a very busy schedule, and I hope that you will appreciate it and that maybe it will change your views – hopefully a lot, but just maybe a little. I don’t want to be your next article, please. I just want you to stop writing about us like we are all a bunch of nothings and nobodies.
p.s. And not, I did not renounce my citizenship for “tax reasons” – as I said to the Embassy, and to summarise the above, it was because having the two citizenships was an “impractical obsurdity” (legal speak). I should have relinquished US citizenship at the first instance. I would just say that the US Government creates that obsurdity – they should look inwards.
Appreciated your letter posted above. All good points, and enjoyed reading it. Thanks for sharing it with us. It may or may not penetrate the thick skull of the ‘journalist’, but at least if he insists on remaining ignorant, it is now deeply ‘willful’.
Thank you. I truly do wish I could have remained a US citizen. I do sometimes feel melancholy, but that feeling is quickly filled with anger and then gladness to be free of threat.
Also, I do have a little hope that one day, the USA will be great again. A place I can really like. There are places I can tolerate, but they are cities, and I generally don’t like the idea of cities. I could probably never afford to live in my idea of the best American places.
Well done, @BlackPoplar. He asked and you answered. We can only hope your words make a firm connection and then Mr. Fernholz makes a course correction in both his thinking and writing.
@BlackPoplar You are what you feel inside from your birthright, from your memories, from your values. No government piece of paper can take that from you.
@EmBee and @heidi
Thank you for the support, and heidi, your advice. I will remember it.
The US Embassy in Luxembourg is a great idea for renunciation – I hadn’t heard of or thought of it. It’s a fairly easy drive up the French tollway and Luxembourg city is navigable. Train would also be an alternative to driving to Luxembourg.
This April 2012 article from the NZZ mentions that four or five Swiss-Americans per month were traveling to Vienna to renounce. Vienna is an eight to ten hour train ride from Zurich so I imagine they were mostly flying:
“Rene B. received advice from other US citizens to give up his citizenship at the American Embassy in Vienna. According to him four to five Swiss-American dual citizens apply there monthly to give up their passport. “The number of Swiss-American dual citizens who want to renounce their US citizenship and do this at the consulate in Vienna has indeed increased considerably”, wrote the American Embassy in Vienna. ”
René B. bekam von anderen US-Doppelbürgern den Rat, seinen Pass in der amerikanischen Botschaft in Wien abzugeben. Laut dieser melden sich monatlich vier bis fünf schweizerisch-amerikanische Doppelbürger, um ihren Pass abzugeben. «Die Zahl der schweizerisch-amerikanischen Doppelbürger, die ihre US-Staatsbürgerschaft ablegen wollen und dieses am Konsulat Wien tun, ist tatsächlich erheblich gestiegen», schreibt die amerikanische Botschaft in Wien.
Since Don Beyer, the former US Ambassador to Switzerland, left in the spring of 2013, it seems only eye-witness anecdotal information, and no official data, has been available about renunciations in Bern.
I have another question about social security (you were very helpful with a past question).
I am taxed 15% in the US and I believed that I would get a tax credit for that on my swiss canton taxes (Vaud) instead they are taxing me on the 85% that I received from the US at the full marginal rate with no credit. I am losing
15% of my benefit. I thought there was a tax treaty in place! Is each canton a law unto itself ?
You might review this excerpt for guidance:
Tax Convention between US and Switzerland:
Government Service and Social Security
4. Notwithstanding paragraph 2, social security payments and other public pensions paid by a
Contracting State to an individual who is a resident of the other Contracting State may be taxed
in that other State. However, such payments may also be taxed in the first Contracting State
according to the laws of that State, but the tax so charged shall not exceed 15 percent of the gross
amount of the payment.”
So there really is no treaty that governs the amount that ‘the other contracting state’ Vaud can tax me.