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 tim@qz.com .
@IsaacBrockSoc @FedupUSExpat please, ask them to e-mail me at tim@qz.com
— Tim Fernholz (@TimFernholz) February 13, 2015
I think Americans can’t have a checking acct at a local Swiss bank anymore, so if that’s true, then that’s exactly why Tina got rid of the U.S. citizenship. Tim needs to understand YOU CANNOT LIVE (e.g. pay utility bills) in a country WITH NO BANKING.
Tim needs to listen to the interview with Keith Redmond: http://radio.foxnews.com/2015/01/26/american-expat-keith-redmond-on-why-some-americans-abroad-renounce-us-citizenship/
Here is what FATCA means in a nutshell. For “US persons” and their spouses overseas, FATCA means that you either face:
A) NO BANKING in the country where you live because you aren’t worth the risk
Or B) BANKS make you sign a form that allows you an account with them only if you agree to give up ALL financial privacy PLUS having to file to the IRS lots of complex paperwork annually on your local earnings, etc. that naturally to the IRS are in foreign currency and involve foreign accounts (even if you don’t owe the IRS anything). In addition, you must report to FinCEN (the Financial Crimes Enforcement Network branch of the IRS) if at any date the total of your accts reach a mere 10,000, for example, if you just sold a used car. In return for your efforts to report to them, FinCEN will fine you an automatic 10,000 penalty for simply failing to file a piece of information with them PER YEAR. Put simply, you’re screwed if you file and you’re going to be screwed if you don’t file. And THAT is why people are renouncing.
You can pass this comment on to him if you wish; I cannot risk emailing Tim as we are not compliant with the IRS yet, even though we don’t owe them taxes. My DH and I are terrified of the penalties that the IRS can inflict, but we can’t afford to renounce. We are both dual citizens whose kids were all born here in Canada (the oldest is 21) and we need every extra dollar for their university education and expenses.
If anyone has seen the new renunciation list direct from the Federal Register – here it is:
https://www.federalregister.gov/quarterly-publication-of-individuals-who-have-chosen-to-expatriate
First Honour Roll of 2015.
Quoting from an article in today’s Globe by Simon Hauptmann.
A report by Craig Silverman called ” lies, damn lies and viral content”
Anyone notice the irony of the next headline below the Fernholz article?
Apple CEO Tim Cook says privacy is a matter of “life and death”.
@Duke of Devon
Eric and others refer to the current state of journalism as “selective stenography”:
http://www.salon.com/2012/01/13/arthur_brisbane_and_selective_stenography/
R Crumb describes the US media as made up primarily of PR persons.
People not knowing what to believe are going to alternate new sites like the one Mr Fernholz contributed to and getting fed even worse BS. Yes, Tina Turner should sue him for libel.
I cannot email him myself but if someone would like to send him a link to my “FATCA: An Introduction to the Worst Law….”, etc. maybe he will get the “primer” education that WhiteKat suggested he needs. You can also tell him that the author would renounce her US citizenship in an instant if it wouldn’t cost her thousands of dollars she doesn’t have to do it.
I’m trapped and I’m not alone. Maybe a much larger number of those 6.5 or whatever million would be renouncing if the US government had not put such obstacles in their way, which, according to their own laws, they’re not supposed to do.
bubblebustin and Duke,
http://index.rsf.org/#!/ (U.S. #49)
@Calgary411
I see land of the free is 49th. Shame on them!
All the freedom in the world Is wasted on journalists who wont scratch the surface. The self-censoring should be as big of a concern as any outside suppression, I would think.
Never heard about “Reporters without Borders” before. Interesting.
No surprise that the U.S. did not rank very high, although I didn’t check their reasons for it. Edward Snowden should have unified Americans in pressing for reforms. Nothing has changed.
Also, the mainstream press in the USA is obliged to please their sponsors and media conglomerates first and foremost. Therefore they report a lot of propaganda, such as BS statistics about the economy that has “recovered” from the recession. (To get the real picture, ignore the mainstream media and go to http://www.shadowstats.com).
@MuzzledNoMore, I hear you! I’m in the same boat.
I wouldn’t waste my time trying to educate this American homelander troll. I’d have better results attempting to teach cats to sing Mozart’s Requiem in D minor.
@Tim Fernholz:
Your article reads: “the US has seen just .17% renounce citizenship in the four years since the law was enacted, and certainly not all of them for FATCA-related reasons.”
Let me tell you about the situation in Switzerland:
411 US citizens expatriated in Switzerland from Jan to Sep 2011, or about 550 for full-year 2011. This was reported by Swissinfo.ch and Handelszeitung.ch, per the US Ambassador to Switzerland.
About 800 US citizens expatriated in Switzerland in 2012, according to American Citizens Abroad organization, per the US Ambassador to Switzerland.
For 2013 there are a calculated 15,487 people born in the USA who live in Switzerland and who have dual citizenship, and are thus “eligible” for expatriation, or have already expatriated. (Eurostat databases: 2013 migr_pop3ctb and migr_pop5ctz). (15,487 = 35’402 (USA Country of Birth) – 19,915 (US citizens in Switzerland) ).
If we assume a run rate of 800 expatriations per year for 2013 and 2014 and use 800 for 2012 and 550 for 2011, a total of 2,950 Americans residing in Switzerland have expatriated in the past four years. This is 19.0% of the dual citizens living in Switzerland.
Also, although Switzerland has a relatively low number of US citizens compared to Canada and the UK, note this quote in the Wall Street Journal: “(A State Department spokesman) added that three-quarters of all renunciations are processed by consular offices in Canada, the U.K. and Switzerland.”
It is often acknowledged that the US government crusade against the US diaspora began in earnest in Switzerland. If this is a sign of the future, keep an eye on the quarterly IRS expatriation lists.
I have today posted the following at http://jamaica-gleaner.com/gleaner/20150215/focus/focus5.html
I do not know whether my comment will be published and hence I copy it here as well. Others may choose to comment as well.
_______________________________________
How interesting and how full of mis-information.
The US is unique (apart from Eritrea) in taxing its Diaspora … indeed the US goes further and labels all sorts of person “US Persons”. This (often referred to as Citizenship Based Taxation “CBT”) is a legacy from the US Civil War which needs to be repealed. Its intent is to track down and capture (tax) “escaped slaves” … that is persons who did not wish to participate in the Civil War and who then voted with their feet and departed the US. This CBT was to be their punishment for non participation in the War. The World (excluding the US and Eritrea) uses Residence as the basis for determining who is taxable and who is not and taxes (all, part or none as the case may be) the world wide income of those who are RESIDENT in their country.
The money that the IRS is reporting as having received so far is NOT primarily tax as I understand it but a wicked set of penalties (sometimes exceeding the capital in US owned accounts around the world) and interest …. mostly these are FBAR penalties which I understand START at US$10,000 per account per year … but, if the IRS is of the opinion that the accounts were willfully not disclosed to the Treasury Department Financial Crimes Division then the penalties accelerate to the GREATER of US$100,000 per account per year OR, if greater, 50% of the maximum balance in each account in each year. A system clearly designed as legalized theft. As the Retired Judge in the article said, he had never heard of FBAR (very few people have) … yet that is where most of these penalties originate. Having looted these accounts once, there will be very little left for the IRS to rip off on an ongoing basis. The Congressional Budget Office estimate that FATCA will give rise to additional Income Tax collections of some $870 Million per year. The major banks in Toronto have already said that they have collectively spent in Toronto more than $750 Million to get themselves into a position to be able to comply … and the costs do not end there. Such costs are being incurred worldwide … and not only in the Private Sector but as additional burdens on the Finances of all nations.
FATCA was at its essence a declaration of War. FATCA starts with the premise that because the world uses the US$ as its Reserve Currency and the denominating currency for most of world trade, it has the power to sequester these funds as every transfer has to be cleared through a US Bank. This FATCA starts by saying that the US Banks will deduct a tax of 30% on every transfer of funds out of the US even if the funds are merely transiting the US Bank UNLESS the Financial Institution to which the money is being transferred has agreed to disclose whatever information about its customers that the US determines from time to time. This of course is contrary to the Laws and Constitutions of every country in the world (for all practical purposes) and is the subject of litigation now in Canada where brave people have launched a test case. See adcs-adsc.ca for information on the Litigation and read on the subject in depth in the archives at isaacbrocksociety.ca
To comply with the foregoing the Banking Industry have been put into a box of bricks … comply and they breach the laws of their individual countries or do not comply and get hammered by the IRS … and by the way pass on to their customers (whether or not they are defined as “US Persons”) the very substantial cost of compliance. The “fix” was to invent a document called an Intergovernmental Agreement (“IGA”) – an illegal document in itself. The IGA purports to document an understanding and arrangement between the US and other countries that those other countries will collect the data required under FATCA (from all financial institutions as defined by the IRS in the country’s jurisdiction) and report same to the IRS … thus eliminating the disobedience of the Banks with National Laws. Problem. Those IGAs purport to circumvent our Laws and Constitution and Charter of Rights …. and even on the US side have not been approved by Congress nor have they been approved in the Senate as International Treaties which they indeed are. There is Litigation commencing in the US to stop this.
Gosh – this comment is far too long now yet there is so much else to say. Do read extensively in the archives at isaacbrocksociety.ca and help support the Litigation at adcs-adsc.ca
Finally. A word of caution to all JAMAICANS and other Non US Persons. Do not get involved with any business (or matrimonial) partners who are defined as “US Persons” or allow such people to serve as Directors of your enterprise (or Charity Organization or other Community based organization) nor as senior employees such as might have cheque signing authority on your business bank accounts …. to do so is likely to open your JAMAICAN entity up to costly harassment by the IRS. Better to avoid dealings with US Persons or US Investments or US Investors if you do not want to be involved in a web of costly harassing interlocking foreign booby traps. Indeed I would go further and suggest that people start to source their goods and take vacations in countries OTHER than the US as who knows what complications might arise there. Certainly, people like Canadian Snowbirds who often own houses in warm states like Florida and spend winters there need to urgently rethink their lives. The complications and costs of compliance with this growing web of form filling are just not worth it.
The G20 “GATCA” initiative is bad but not so bad as FATCA … why ? because no other country (except Eritrea) considers its “People” living around the world as escaped tax slaves. Indeed the US is reportedly obstructing and is reluctant to participate in GATCA as It considers that FATCA serves its purposes.
Besides. Despite what is written in the IGAs, US Law does NOT allow for the reciprocity in information supply to foreign countries by the US or US entities. Please read extensively on the subject. This is a con. Such reciprocity if given will hit the US Banking industry hard … and damage Delaware (the home of nominee ownership), South Dakota (massive trusts administered there), Nevada, Florida and New York … which, believe it or not, are recipients of massive deposits and other (“safe haven” ?) investments much of which is evading tax or other laws (like Exchange Control) from around the world.
Imagine if Canada treated Senator Ted Cruz (born in Alberta Canada) as an escaped Tax Slave as the US would do if his circumstances were reversed. IMagine if Kenya or Indonesia or Ireland were to lay claim to President Obama as a Taxable Person in those countries (Son of a Kenyan, Adopted Son of an Indonesian, Descendent of Irish people) . The scope for chaos is great ….Columbia has already indicated that it is now going to tax the US assets of Colombians (25% if declared now, 70% if discovered later) and some West African countries are considering similar things. If this continues, I can see that the US will become the target of tax grabs from around the world as every country on earth seeks to tax their diaspora living there.
This is a serious matter.
Others may choose to comment as well.
This is clearly a paid actor. The US needs support and this guy was their patsy. This is the only reasonable explanation for this article. Now really, can somebody really be this stupid?
http://m.bbc.com/news/uk-31475945
Boris is going to ask the US Ambassador for his help to renounce. Wouldn’t the US better off keeping people like Boris than driving them away?
It’s obvious Boris has employed his PR machine in his ‘ditch US citizenship’ bid, the story appears in all the UK major newspapers.
I think that it makes sense for him to renounce. It wouldn’t hurt his political chances in the U.K. and might even help. Even Britons I know who would never vote conservative think that his being presented with a U.S. tax bill is ridiculous. Maybe he is worried about being considered a covered expatriate given that he lost his cool on that radio show and complained about U.S. taxes?
Boris is going to ask the U.S. Ambassador for help? Where does he get off going straight to the top while everyone else has to get in line and figure out all the details for themselves.
It never hurts to know someone at the top! Personally, I wouldn’t criticize anyone for doing whatever they have to do to ditch their US citizenship ASAP. Anyone know what the waiting time is at the UK consulate? Maybe it’s a non-issue. (Or maybe he cut a deal; I’ll pay the CG on the house if you agree to fast-track my exit.)
The US government certainly has a vested interest in ushering Boris quickly and quietly out the door because all the attention on this case is making the US and it’s CBT look stupid. After they cut Boris loose things will settle down and they can get back to quietly screwing everyone else without all the media attention.
@ nervousinvestor
That Gleaner piece is pretty toxic, full of threats. An antidote is needed. I hope your comment gets through moderation.
Of course Tim Fernholz doesn’t even mention the people he claims renounced for tax reasons paid a hefty exit tax on gains they never actually received.
It seems our emphasis has been primarily on long-term emigrants renouncing US citizenship. You now have to wonder how effective this campaign against American abroad is effecting others who have and are about to make the decision to live in other countries, whether it’s through marriage, family reunification or long term career prospects.
I think if my mother had been aware of what her children’s births in the US would bring them later in life, she would have urged us to relinquish at 18, or on taking Canadian citizenship. Up until the last few years, US citizenship was not seen as a problem to be dealt with.
Related commentary on another failure of US journalism — not asking ALL of the pertinent questions Who, What, Where, When and Why for the 2005 New Orleans flood. http://www.huffingtonpost.com/harry-shearer/what-nbc-should-investigate-while-its-investigating-brian-williams_b_6684376.html
Which responsible journalists are asking all of the questions relating to *our* story?
Email I sent to Tim:
Tim,
I’m not wealthy enough to pay any DUHmerican taxes so that part of your ‘reasoning’ doesn’t apply.
I was born and grew up in DUHmerica so the second part of your reasoning doesn’t apply either.
The reason I left is rooted in the events of May 4, 1970. That’s the day DUHmerica lost me for ever. Its the day it became glaringly evident that everything I had been inculcated with prior to that fateful day was pure unadulterated USDA Prime bullshit. Its the day I began asking serious questions about DUHmerica and the further I dug the angrier I became.
I discovered that contrary to what my young mind had been filled with the truth about DUHmerica is its the biggest threat to the peace and dignity of the 94.5% of world population that are lucky enough not to be DUHmerican.
DUHmerica is undeniably the biggest warmongering terrorist regime ever to infest the planet.
I loath DUHmerica and will never step foot on DUHmerican soil ever again for any reason.
I avoid purchasing or consuming DUHmerican products or patronizing local companies that are even partially owned by DUHmerican companies.
The day DUHmerica collapses into the pool of its own economic demise is the day I’ll dance a fucking jig and drink an entire bottle of Zacapa.
@Tim Fernholz:
Your article reads: “the US has seen just .17% renounce citizenship in the four years since the law was enacted, and certainly not all of them for FATCA-related reasons.”
Here’s my calculation of renunciations and relinquishments of those “eligible” to expatriate.
Number of US citizens living outside of USA and territories: 7.6 million (DOS BCA May 2013)
Calculated number of US citizens who are dual citizens: 38.9% *
Number of US citizens “eligible” ** to renounce/ relinquish: 2.956 million
Number of renunciations only (but not relinquishments) per FBI NICS, last four years:
2011: 958
2012: 4,652 ***
2013: 3,128
2014: 3,433
Total: 12,171
Research by IBS shows that there is approximately one relinquishment for each renunciation. FBI NICS data is only for renunciations.
Total Renunciations and Relinquishments: 12,171 x 2 = 24,342
Calculated Percentage of Renunciations and Relinquishments of Dual Citizens living abroad:
24,342 / 2,956,000 = 0.82%
* – A calculated 38.9% of US citizens abroad have dual citizenship. This percentage was calculated from Eurostat data for 2013 for 24 European countries.
** – Although it is possible to do so, it is exceedingly rare that a US citizen gives up US citizenship without obtaining another citizenship. As calculated, only about 38.9% of US citizens abroad are in a position to give up their US citizenship.
*** – 2012 FBI NICS includes 2,900 entered in Oct 2012 to “clear a backlog” per Global News article by Patrick Cain, Jan 14, 2014, citing an FBI spokesman. This may include data from years prior to 2011, but further details are not known.