August 8, 2013
Makarska, Croatia
A massive 1,131
individuals renounced their US citizenship last quarter, according to data
that has yet to be officially released (though I was able to procure an
advanced copy).
This is a HUGE jump.
Compared to the same
quarter last year in which 188 people renounced their US citizenship, this
year's number is over SIX TIMES higher.
Not to mention, it's
66.5% higher than last quarter's 679 renunciations.
This brings the total
number of renunciations so far this year to 1,810.
While still embryonic,
it's difficult to ignore this trend-- more and more people are starting to
renounce their US citizenship.
After all, the number
of people who renounced citizenship this past quarter is roughly the same
as the number of people who renounced for the previous four quarters
COMBINED.
This movement shouldn't
be that surprising for a species that began as nomadic hunter gatherers, or
for a society that was founded by foreigner settlers in search of a better
life.
Yet, in a rather
anomalous twist, the emotional ties we have for our passports are
incredibly strong.
It doesn't matter where
you're from-- the United States, Sweden, New Zealand, or Venezuela... many
people all over the world are inculcated from birth with a sense that their
country is 'better' than all the others.
We grow up with the
songs, the flag waving, and the parades until the concept of motherland
becomes deeply rooted in our emotional cores.
Not to mention, when so
many of our friends and neighbors unquestionably fall in line, it's a
powerful social reinforcement that only strengthens the bond.
We come to view our
nationalities rather ironically as a big piece of our core individuality. I
am an American. I am a Canadian. I am an Austrian. Instead of-- I am a
human being.
It has taken decades...
centuries even... to reach this point. So the fact that more and more
people are making the gut-wrenching decision to ditch their US passports is
truly a powerful trend.
So what's driving it?
Taxes... and the search for liberty.
For many, their tax
bills constitute a financial breaking point. Particularly for people who
spend most of their time outside of the United States and are constantly
hamstrung by worldwide taxation and information disclosures, the burden for
many of them has just become too much to bear.
The US government
figured this out some years ago and began charging an exit tax to certain
high income / high net worth expatriates seeking to renounce.
This applies to anyone
whose average US tax liability over the last five years was about $150,000
(the equivalent of roughly $500,000 in taxable income in 2012 dollars),
and/or has a net worth of at least $2 million on the date of expatriation.
Curiously this net worth figure does not adjust with inflation.
The ironic thing is
that in the "Act of July 27, 1868", the United States Congress
declared that "the right of expatriation is a natural and inherent
right of all people, indispensable to the enjoyment of the rights of life,
liberty, and the pursuit of happiness."
Yet I would expect that
as the number of expatriates continue to grow, this exit tax will become
more and more onerous as the government tries to trap people, and their
wealth, in the country.
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- Hear from Tim
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- We're reviewing banking in Norway as an
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1 comment:
I have researched this and the only drawbacks are, if you renounce, you will still be liable for any back taxes for the next ten years to the U.S. plus, you will not be allowed back in the U.S. if you renounce your citizenship. It is America's way of saying kiss my ass to any citizen who want's to leave. I say...America can kiss MY ass, if things do not change back to the Republic form of law and Government.
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