STAFF NEWS & ANALYSIS
Thousands of Americans renounced their citizenship. Again
By Simon Black - November 09, 2017

Via Sovereignman.com

Every quarter the United States government publishes a list of individuals who have chosen to renounce their US citizenship.

The latest list came out yesterday, and 1,376 people are on it.

That might sound like a small number, but the total for 2017 is projected to be more than 20% higher than 2016… and 2016 was 26% higher than the total number from 2015.

In fact the number of Americans renouncing their citizenship has been rising dramatically for years.

The primary driver behind this is taxes, plain and simple.

The Land of the Free is one of the ONLY countries on the planet that taxes its citizens on their worldwide income, EVEN IF they don’t live in the United States.

You could be an ‘accidental’ US citizen, i.e. one of your parents is American, but you live your entire life overseas. It’s possible that you’ve never set foot on US soil or even speak English.

And yet Uncle Sam will still demand his fair share of your worldwide income. Plus interest and penalties.

Beyond that, the cost and hassle of maintaining tax compliance has grown worse ever since the US government passed the Foreign Account Tax Compliance Act (FATCA) back in 2010.

I’ve written about this a number of times, calling FATCA quite literally the worst piece of legislation in US history.

The idea behind FATCA was to uncover any hidden money that Americans might be hiding overseas… so the law included countless rules that were thrust upon foreign businesses, banks, and governments.

It was the height of arrogance– the US government extending its jurisdiction to the entire world and commanding everyone to follow its laws.

Imagine if the government of Saudi Arabia decreed that US grocery store chains were forbidden to sell pork products to any Muslim in the United States… and then forced those US businesses to report back to Riyadh on what every single customer (Muslim or not) was purchasing in the checkout line.

Crazy, right? But that’s basically what FATCA does.

Every bank in the world, regardless of whether or not they have US customers, has had to enter into an information sharing agreement with the Internal Revenue Service.

This has become absurdly expensive.

In 2014, the Telegraph (British newspaper) estimated that the cost of implementing FATCA compliance in the UK would cost 500 pounds PER FAMILY.

In other words, British families are paying 500 pounds so that the IRS can sniff out US tax dodgers.

The Swiss-American Chamber of Commerce estimated that the worldwide cost of complying with FATCA would be between $1 to $2 trillion. And many other organizations echoed this analysis.

Yet the US government’s best estimates on the amount of tax revenue generated by FATCA are less than $20 billion.

Think about that– $1 to $2 trillion in costs, $20 billion in benefit. It’s genius!

On top of that, FATCA has created a culture where banks around the world are terrified to do business in the US, and US banks are terrified to do business overseas. It’s amazingly short-sighted.

Most of all, though, FATCA created debilitating rules for certain taxpayers living abroad, to the point that many of them were driven to renounce their US citizenship.

When you go to renounce your citizenship at a US embassy overseas, State Department officials are required to debrief you and conduct an exit interview to find out WHY.

If there’s even a hint that you’re doing it for tax reasons, they can throw all sorts of penalties at you, including barring you from entry to the United States forever.

So naturally nobody ever says “taxes”. Or “FATCA”.

People give all sorts of reasons– I even knew a guy once who told the consulate that his wife (a foreigner) threatened to divorce him if he didn’t renounce his US citizenship.

But the government’s own data is very clear: post-FATCA, renunciations soared. And they continue to climb.

Sadly, a repeal of FATCA is conspicuously missing from the proposed ‘comprehensive tax reform’ that was announced this week.

I honestly have a difficult time even calling it comprehensive tax reform.

All they’re really doing with this tax plan is changing some rates, throwing out a few deductions, and (hopefully) making things a bit simpler. But it’s hardly anything revolutionary.

Real, true, honest to goodness COMPREHENSIVE reform would entail throwing out the tax code entirely.

The current tax code as it exists was written more than three decades ago… in a world dominated by the cold war and heavy industry.

The Internet didn’t exist. Globalization on this scale didn’t exist. Most of today’s biggest industries didn’t exist. And neither did most of the largest companies in the world that exist today.

This proposed plan still essentially jams a 21st century world into a 20th century tax code. It just doesn’t fit.

Real reform would be throwing out the ENTIRE tax code and starting from scratch… beginning with a clear determination of strategy and what they need to accomplish with the tax code.

And if they needed some inspiration or advice, there’s no shortage of countries that have smart tax codes and just happen to be awash with cash: Estonia, Singapore, Hong Kong, etc.

So this is shaping up to be a pretty big missed opportunity to create a sensible, 21st century tax code that no longer forces thousands of Americans to renounce their citizenship in droves.

Fortunately there are still sound alternatives.

Anyone even thinking about renunciation ought to seriously consider Puerto Rico.

Puerto Rico has one of the most attractive tax incentive programs in the world; as an investor, you can generate unlimited income (subject to a few simple rules) and pay ZERO tax, either to Puerto Rico or to the IRS.

And as a business owner you can cut your effective tax rate to just 4%.

(Plus you don’t even need to live in Puerto Rico full time to qualify.)

That deal is hard to beat. And it’s a much less dramatic step than renunciation.

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Posted in STAFF NEWS & ANALYSIS
  • SnakePlissken

    Enjoy your low taxes in America’s 3rd world ghetto.

    • Boysie

      PRECISELY – WHO IS GOD’S GREEN EARTH WOULD WANT TO LIVE IN SUCH A HELL-HOLE – CERTAIN THAT I DON’T

  • Groucho_Lenin

    Guernsey and Sark in the Channel Islands are British protectorates but not in the UK or the EU. Both tax worldwide incomes. The extent of enforcement is not known.

    • You may be mistaken about that. My understanding is that non-resident Guernsey citizens, which is anyone other than residents, or those who are
      resident but not solely or principally resident, pay tax only on
      Guernsey-sourced income.

  • Varangian Guard

    GTF out and don’t come back. Even with the atrocities of the past 8 years the USA is still the finest republic in all history.

    Legal immigrants of which I am one we’re happy to take the oath and in turn serve the country. If you don’t to be here, we don’t want you here either.

    • Boysie

      ARSELOCH

      • Nailhead

        If you’re going to use the German language at least get the spelling correct! That’s spelled ARSCHLOCH. And just exactly how does that contribute anything of value to the dialog?

        • Boysie

          You are so very typically American –

          you have absolutely nothing to say –

          so you try to find the head of the pin –

          and ten you shout –

          Look This Pin Has No Head! –

          If you are such an expert on German Grammer – How come you spell the English word LABOUR – without the (U)

          Have you ever had anything of VALUE

          Can you describe it –

          What criteria makes it valuable ?

          Don’t bother to reply –

          Unlike you

          I have a life to live!

          • Nailhead

            Boysie – Pardon me for replying, it’s just that you gave me such a good laugh so early in the day and I wanted to say, thanks! “typically American”, my you’re so clueless. I am the very first American born in my family and I’m mighty proud of it too. Unfortunately for pissants like you, you are utterly lost because you’ve been down so long, rubbing two nickles together that the only thing you’re interested in is dragging others down to your level.

            And being an American means that I don’t have to answer to any debris from the third world like you.

            Now, after first changing your diaper, you’re free to go trolling elsewhere. Go f#*k off.

    • James Clander

      —— still the finest republic in all history.
      What nonsense – the facts speak for themselves.

      • Varangian Guard

        Your parents basement won’t open your eyes to the state of the rest of the world. And……if you don’t like it you are welcome to GTF our too.

        • Col. E. H. R. Green

          You would benefit from removing the statist propaganda and other related clutter in that mental basement between your ears and replace it with an active, soundly educated mind. Then you would discover what a liability US citizenship actually is nowadays, and why no person who has a healthy self-esteem and takes seriously his or her personal and economic privacy and freedom would want to keep it, or acquire it.

          I am a former US citizen, and I now enjoy a level of personal and economic freedom and privacy that used to be the norm in the US many years ago, but is unheard of there nowadays, for it has been outlawed.

          I am proud that I have been successful in changing the minds of several foreign nationals who had been contemplating becoming US citizens by helping them cut through the propaganda and pointing out to them how US citizenship is truly hazardous to their safety, and their legitimate individual rights.

          • Varangian Guard

            So former US citizen, is that “Colonel” a Kentucky Fried Colonel, or more a kernel of corn lodged in someone’s excrement.
            So in risk of being redundant – GFY.

    • Col. E. H. R. Green

      So you are an immigrant to the US, useful idiot ?

      Indubitably you are from a country that’s more statist than the US and left it because of its government’s intrusions upon your personal liberties, and you came to the US, took an oath to worship and serve the Great God State and thus support the very same intrusions that the US government at every level foists upon you and everyone else here, just merely to a lower degree–so far.

      It is YOU and your fellow statists, nominal Americans who have far more in common philosophically with Lenin, Marx, Guevara, Chavez, or Mussolini than you have with Jefferson, Locke, and Mises, who are responsible for screwing up the USA by supporting the US government’s attacks on personal and economic freedoms, pushing the government to usurp legitimate individual rights, including your own, who should “GTF out” !

      • Varangian Guard

        I’m a naturalized US citizen 35 years who served this country “Colonel”.
        So GFY.

    • Angelica

      You are an immigrant to the US? Do you still file tax returns to the country you came from? Do you have difficulty getting a bank account in the US because you are still a citizen of the country you came from? If you do have a bank account in the US, does that bank send detailed reports of your banking activities back to that country (under threat of large penalties if they don’t?) Those are the problems Americans overseas are dealing with, so think about that for a while before ranting…

      • Varangian Guard

        Naturalized US citizen 35 years who served this country. You’re really an angry person ya know?

        • Angelica

          Angry? Not really – can’t imagine where you came up with that. Unless you are a troll, which is exactly what you seem to be. And since you didn’t answer any of my questions, let me do that for you: Q1, you’re an immigrant? According to you, yes. Q2, 3 and 4: no, you do NOT file tax returns back to your birth country; no, you do NOT have trouble getting a bank account in the US because you’re still a citizen of another country; and no, your bank does NOT send detailed information about your banking activity (and that of your spouse/joint account holders/business associates) to your birth country. There – I answered for you. Now go ahead and attack me again but it will have no effect since you lost any credibility with your previous ‘response’.

    • Number 6

      Because as we all know Governments with greater powers to tax and spend and that give all the money and power to a greedy selfish minority and their useful idiot, economically illiterate minions ie socialist governments, are the most prosperous aren’t they ohhh hold on a minute its the exact opposite isn’t it ie the more socialist a country is the poorer it is, as history and common sense clearly attests

      0% tax MAXIMUM incentive for everyone to trade and make money = prosperous country.

      100% tax ZERO incentive to trade and make money = poor country.

    • DualNational

      You may watch your mouth (or finger). There are good reasons why US citizens are living outside the US. Dual nationals might have never resided stateside – possibly due to the bad working conditions or high college fees provided stateside in comparison to other countries. Such individuals may not even consider to follow your path and burden their lifes. Even tough I am a US citizen from birth, I never wanted to life in the US. I never received any benefit from the US. Why do I have to pay taxes to the US and be subject to limitations abroad? And why do I have to pay $2,350 to renounce the burden of US citizenship?

      • Varangian Guard

        You can leave too. You are just another whiney little schitt. If you don’t want life in the USA no one is better equipped to change that than YOU. If you stay that is on you too. If you get arrested for tax evasion it’s on YOU. If you live here there are infrastructures in place you use.
        I HAVE been many places in the world and there is NO BETTER.
        Everything has an opportunity for improvement. Nothing is perfect, the USA is the best opportunity. Life in the USA has a big draw back with people like you. Technology has made life easy and people like you SOFT. You whine and complain sayin “I had no choice”. Well you have more choices here than anywhere else, not enough? GTF out. We obviously don’t need you as you have no contribution. You are zip, zero, nada and irrelevant.
        May no one remember you and may you be the schitt you are in someone else’s stall.

  • Jeff L. Wright

    America is a fast-eroding Republic with fewer and fewer benefits for citizens of an increasingly autocratic and liberty-stifling business infrastructure, driving people out. The “America right or wrong” (and wrong again) crowd will scream, “THEN LEAVE!” Never realizing that the answer doesn’t lie there.

    Time for revolution, not acquiescence to xenophobes and jingoists…….

  • Libertarian Jerry

    The Income Tax has very little to do with revenue raising. There are many other ways that the federal Government could raise revenue more efficiently without an Income Tax. The income Tax has mostly to do with control. That is controlling the value of the fiat currency we call money by taxing back purchasing power and thus controlling inflation and by controlling people by prying into their personal financial lives and financial privacy. Once the Income Tax was installed back in 1913 that was they death knell for property and privacy rights in America. Is it any wonder that the Second Plank of the Communist Manifesto calls for a heavy progressive income tax.

  • Samarami

    Arguing about “The-Tax-Code” is one classic example of asking the wrong questions — so answers become superfluous. Varangian Guard may just be right — except for a rather foul attitude. This place they’ve been calling “The-US” ain’t really that bad — it’s just that the predators have gained a substantial foot-hold on the place. But that happens all over the world.

    Ya can run.

    But ya can’t hide.

    Fight. And abstain from beans.

    Sam

    • Angelica

      No this particular issue is NOT happening all over the world – Eritrea and North Korea (whose citizens are not free to leave) are the only countries in addition to the USA whose citizens are taxed no matter where they live in the world. That’s why so many Americans are renouncing.

      • Samarami

        No fight here. My stance is merely that the brainless abstraction called “government” crops its ugly head everywhere. Where there are groups who call themselves “the state” there will be theft operating under the euphemism “taxation”.

        Those groups appear because the vast majority seem to want them to appear. Once a critical mass come to their senses the “states” will disappear. Sam

  • NobodysaysBOO

    MULTI-MILLIONS of the ANGRY US CITIZENS WILL renounce the BOGUS ALIENS HERE as FAKE US CITIZENS and TOSS them OUT with a WALL or OVER IT! with TRUMP or NOT!!!

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