By Amy Alkon
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donkeyrock shared this story from |
Who’s Renounced Their U.S. Citizenship And Why?
From the BBC. A couple of the 20 examples:
1. David Green, Ontario, Canada:
I was born and raised in the US. At the age of 30, I fell in love with a beautiful French girl whose profession was working in the French language. We moved to Canada (bilingual) where we have enjoyed life and we both could earn a living and contribute to life. I always paid my taxes to both the USA and Canada and seldom paid US taxes due to the higher taxes in Canada. But when you retire, hold on to your hats because the common deductions you enjoyed while working no longer apply. I ended up paying over $3,000 (£1,850) in taxes to the US when I retired. That is a significant amount of my retirement income. Since all my benefits come from Canada and the USA provides nothing but increased complications in tax laws and the ability to snoop into our personal lives (including my wife who is not a USA citizen), I renounced my USA citizenship in April of this year – for a fee ($450). I feel sad at the action I have taken but angry at the bureaucracy that caused this problem for so many to possibly catch so few.2. Pamela Schmidt, Germany:
I was an American citizen, and I have spent most of my time in Europe for the last 12 years. In 2006, I married a German citizen and applied for German citizenship in 2010. The German authorities do not allow dual citizenship; therefore, I had to take a decision of becoming German or remaining American. I thought about it for a while and chose to become German. As I have spent most of my adult life in Europe, I feel more European than American, and I would like to be able to play a more active role in politics in the country where I live, which are the main reasons for my decision. However, the bizarre financial rules in the US did make the decision easier. The American government with laws like Fatca [Foreign Account Tax Compliance Act] treats non-criminal citizens abroad like tax-dodgers and limits Americans’ financial situation when living abroad, as many local banks don’t want to deal with these regulations.8. Michael Hayes, Freigericht, Germany:
With its draconian penalties and inscrutable or non-existent filing guidelines, reporting into the US tax system has become a major financial risk for Americans living abroad. I decided to eliminate this risk to my family and well-being and simplify my life. Thus I became a German citizen and renounced my US citizenship.17. Alec, London:
I left the US at the beginning of 1993. Next April I will have lived in the UK for 20 years. I left America both because I’ve loved Europe since living in Germany for a year when I was a teenager, and because the increasingly reactionary drift of American politics and political thought since the ’70s made me feel more and more out of step with American values. The developments I’ve seen since I’ve left have only confirmed me in the wisdom of my decision. I held both British and American citizenship for several years, but when the IRS contacted me and told me that due to the Alternative Minimum Tax, I had incorrectly filed my taxes after a monetary windfall one year, and owed them over $2,000, I decided the time had come to give up my American passport. My only regret is not having done it much sooner – though visiting it for holidays and family is often pleasant (the shopping is great!), I’m always happy when I get on the plane to come home.
Hans Bader writes at OpenMarket:
The U.S., unlike many European countries, taxes its citizens on their worldwide income, regardless of where they make it. As the I.R.S. explains, “Your worldwide income is subject to U.S. income tax.” Romney, Obama, and others in fact pay such taxes on overseas income, which is listed as taxable income on their tax returns.
The empty-headed populist rage at Americans with overseas income has contributed to the passage of a law backed by the Obama administration called FATCA that makes life needlessly difficult for Americans overseas. At Reason, journalist Matt Welch, who once lived in Europe, describes how his family will be harmed by FATCA, which will result in the closure of a Swiss bank account that his wife needs because she earns Swiss francs doing “work freelance for various Swiss media outlets.” Similarly, he describes how thousands of “U.S. military veterans, dual-national citizens who haven’t lived or worked in America for decades, and panicked retirees . . . are getting bounced out of their existing Swiss accounts and denied new ones, even if they live and work in Geneva for one of the city’s many international non-governmental organizations.” As one American who works for the International Labor Organization in Switzerland noted, “Just since the beginning of the year, I have been informed by one of Switzerland’s two largest banking institutions that due to the fact that I am an American, I had to divest myself of all my investment holdings in their financial institution. Another bank agreed to accept my investments; then, just this month, on the day that I went to sign the papers, I was informed that the authority to do this had been withdrawn.”
Obama’s IRS Snoops Abroad,” by William McGurn in the WSJ in 2012:
Within the United States, almost no American has heard of it. Save for the occasional article, it’s gone largely uncovered. And just like ObamaCare, the nastiest, job-killing aspects will not hit until after this November’s election.
It’s called the Foreign Account Tax Compliance Act, and it’s a doozy. With little debate, Fatca was tucked into the Hiring Incentives to Restore Employment Act of 2010–a jobs bill dominated by tax breaks designed to get businesses to hire unemployed Americans.
Fatca was the revenue side of that bill. The theory was that we would pay for the tax breaks by making fat cats hiding money in their overseas accounts pay their “fair share.” The reality is that the tax breaks did little to dent unemployment, and the legislation’s penalties may end up killing more U.S. jobs than all the call centers in India combined. Delayed once already, Fatca is set to take effect in January 2013.
Strictly speaking, Fatca isn’t a new tax–it’s a new requirement for reporting overseas financial accounts, backed up by heavy fines. It requires foreign financial banks, investment houses, insurance companies, etc. to identify any Americans among their customers and turn over information about their accounts to the IRS (or to the local government, if that country has a sharing agreement with Uncle Sam).
At the individual level, Americans are now required to report foreign accounts at thresholds beginning at $50,000. Failure to file, or filing incorrectly, means a heavy fine. Among the most wicked aspects of this legislation is that a taxpayer can rack up tens of thousands of dollars in fines even if he or she doesn’t owe the IRS a dime in actual taxes.
Source: Donkeyrock_BlurBlog
