WHY MORE U.S. EXPATRIATES ARE TURNING IN THEIR PASSPORTS
April 26, 2010
For U.S. citizens, cutting ties with their native land is a drastic and irrevocable step. But it's one that an increasing number of American expats are willing to take, says Time magazine.
- According to government records, 502 expatriates renounced their U.S. citizenship or permanent residency in the fourth quarter of 2009 -- more than double the number of expatriations in all of 2008.
- In addition, these figures do not include the hundreds -- some experts say thousands -- of applications languishing in various United States consulates and embassies around the world, waiting to be processed.
- While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriations is mainly because of taxes.
- Considering that an estimated 3 million to 6 million Americans reside abroad, the number of renouncements is small.
Expatriate organizations say the recent increase reflects a growing dissatisfaction with the way the United States government treats its expats and their money:
- The United States is the only industrialized nation that taxes its overseas citizens, subjecting them to taxation in both their country of citizenship and country of residence.
- Additionally, the U.S. government has implemented tougher rules requiring expatriates to report any foreign bank accounts exceeding $10,000, with stiff financial penalties for noncompliance.
- These stringent measures were put into place to prevent Americans from stashing undeclared assets in offshore banks, but they also make life increasingly difficult for millions of law-abiding expatriates.
And because the U.S. government requires other countries to abide by its banking and financial rules when dealing with expatriates, Americans living abroad are often denied services because of the increasingly complex legalities and logistics involved in serving U.S. customers, says Time.
Many U.S. expats report being turned away by banks and other institutions in their countries of residence only because they are American, according to American Citizens Abroad (ACA), a Geneva-based worldwide advocacy group for expatriate U.S. citizens.
Source: Helena Bachmann, "Why More U.S. Expatriates Are Turning In Their Passports," Time, April 20, 2010.
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