Last year Laura Snyder asked visitors to the Isaac Brock website to participate in a survey about FATCA and the taxation of US citizens living overseas.
In addition, in early December the report will be the subject of a presentation at a conference in Prague on the subject of diasporas. Snyder’s conference paper that specifically addresses the myth of the wealthy American expat is available here .
The survey report corroborates and complements the results of other surveys demonstrating that US citizens and green card holders living outside the United States experience a wide range of hardships as a result of US non-resident taxation and banking policies.
Further, as discussed in detail in Snyder’s conference paper, the new survey data dispels the myth of the wealthy American expat whose principal purpose in living overseas is to avoid US taxation.
Notably, among the 602 survey participants living in 47 different countries:
– 67% have an income of less than $70,000 per year and 90% have an income of less than $150,000 per year;
– 39% left the United States to join a romantic partner in another country, 28% left to pursue professional opportunities, and 2% were born outside the United States and have never lived in the United States; just one participant reported leaving the United States in order to avoid US taxation;
– 48% of those with annual income of $21,000 to $40,000 and 41% of all participants pay significant fees for professional tax preparation despite owing nothing in US taxes;
– 32% of those with annual income of $1 to $20,000 and 38% of all participants are unable to reconcile the US tax system with the system of their country of residence, with the result that their investments and retirement vehicles are harshly penalized by the US system;
– 37% of those with annual income of $41,000 to $70,000 and 30% of all participants have been unable to open one or more bank accounts because they are a US citizen or green card holder;
– 19% of those with annual income of $1 to $20,000 and 13% of participants overall have been removed from one or more joint accounts with their non-US citizen spouse because the survey participant is a US citizen or green card holder. With respect to unemployed participant, the number experiencing this problem jumps to 26%.
Perhaps especially telling are the number of participants who reported not having any problems. Just 12% of the survey participants gave this response with respect to US taxation and 15% gave this response with respect to FATCA. This means that for the overwhelming majority of the survey participants—88% and 85% respectively—US taxation and FATCA create multiple hardships.
The survey included a small number of open-ended questions to which participants could respond as they saw fit. Many survey participants took advantage of this opportunity. The survey report collects their comments into a full 92 pages.
Anyone engaging in just a quick perusal of these comments cannot help but be struck by the strong emotions the survey participants, and notably those with low incomes, experienced and expressed. Examples include:
– Fear and worry: “[When I first learned of my US tax and banking obligations] I was in shock and have been operating since then in a state of extreme anxiety.” (American woman living in Australia, annual income $21,000 to $40,000).
– Stress, frustration and confusion: “I am faced with either destroying my livelihood or becoming a tax violator.” (American woman living in Canada, annual income $21,000 to $40,000).
– Vulnerability: “I have been removed as a joint holder from my husband’s accounts […] I pray that I die before [him]. I know that if he dies first, my life as a US citizen living outside the US will become a living hell.” (American woman living in France, annual income $1,000 to $20,000).
Please don’t hesitate to share links to the survey report and the conference paper on social media and with policymakers in the United States and the country where you live.