Rather than pay ridiculous taxes, Americans renouncing citizenship
Dropping citizenship can allow former Americans to save on taxes.
Some Americans are moving overseas to work and renouncing their citizenship as they go. The reason isn't because they hate their country, but they despise its tax code. The byzantine tax code and onerous reporting requirements for citizens living overseas is makes compliance difficult.
For a few Americans, it is easier to renounce their citizenship and escape the burden.
According to records, over 1,000 citizens living overseas renounced their citizenship in the second quarter of 2013. While this is only a fraction of the more than one million Americans living and working abroad, it is the highest number ever reported.
The primary motivation is the Foreign Account Tax Compliance Act, which requires foreign employers to report the overseas assets of American citizens. The goal of the law is to find individuals who may be trying to evade taxes by one means or another. By knowing what they hold overseas, as reported by a third party, the government can keep individual taxpayers honest.
According to the Wall Street Journal, overseas tax evasion costs the government $100 billion a year.
However, Americans living overseas say they are weary of the paperwork and burdensome requirements. Most countries have lower tax rates and caps, which make it more attractive to become citizens elsewhere. Some citizens only retain their American passports for travel purposes, which makes the document very expensive.
If you're only retaining citizenship for ease of travel, there may be other, less expensive options for expatriates.
According to the WSJ, Americans living in Hong Kong and Singapore are renouncing their citizenship to take advantage of the lower taxes assessed in those countries.
As the paper suggested, the American system does little to encourage overseas living and working.
It's acceptable for a nation to pursue taxes which citizens rightfully own and should pay. However, imposing burdens that make them want to give up their citizenship suggests something is fundamentally wrong with the system.
© 2014 - Distributed by THE NEWS CONSORTIUM
Pope Francis Prayer Intentions for March 2014
Respect for Women: That all cultures may respect the rights and dignity of women.
Vocations: That many young people may accept the Lordís invitation to consecrate their lives to proclaiming the Gospel.
Rate This Article
Leave a Comment
More U.S. News
- Interview With Cardinal SeŠn Patrick O'Malley Gives Insights into the Heart of Pope Francis
- Deal W. Hudson: Why Social Conservatives Should Become Cultural Conservatives
- CORPORATE SPY: Engineering consultant accused of stealing secrets from DuPont for Chinese
- 24th season of Defending Life Premiered March 5th on EWTN
- Justina Pelletier: Massachusetts DCF Running for Cover Under Legal and Media Pressure
- Matt C. Abbott On a New Book, The Seven Big Myths About Marriage
- Deal Hudson on Culture and the Death of God
- 'Ag gag' bill passes in Idaho; filming at farms now prohibited
- Man becomes first married Catholic priest in the United States with Vatican blessing
- Fr. Paul Schenck: Finding Living Faith on Catechetical Sunday
- The Movie Yellow: Incest as 'Normal' and Cassavates's Slides Into the World of Woes
- The Chicago School Teachers Strike Reveals the Need For School Choice
- The Sexual Barbarians and the Dissolution of Culture
- The Happy Priest Challenges Us to Ask: Who is Jesus to Me?
- Michael Coren on Canadian Public Schools: Teachers, leave those kids alone
- We Cannot Ignore Our Consciences: Cardinal Dolan On Religious Liberty
- In the Face of Danger, Successor of Peter Travels to Lebanon as a Messenger of Peace
- Reflections on the Dignity and Vocation of Women: Who or What?