Rising numbers of Americans are opting for a permanent life abroad and choosing to give up their US citizenship and passports for good.
A new report issued by the Federal Register in the United States of America, indicates that Americans are no longer relocating overseas on a temporary basis but are, instead, choosing to relinquish their US citizenship permanently. The report revealed that during 2009 a total of 502 expatriate US passport holders choose to give up their citizenship for good and take permanent residency in their host country. This was double the 2008 number of 235 citizens.
Speaking in the New York Times, Jackie Bugnion, director of Geneva based advocacy group American Citizens Abroad commented: “What we have seen is a substantial change in mentality among the overseas community in the past two years.
“Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”
One of the biggest causes for renunciation appears to be the strict tax laws of the US, which dictate that even citizens living overseas are forced to pay tax to the US government. This entails that many expatriates face tax bills in both their home country and their host country. One Swiss based executive speaking in the New York Times said of this:
“Having lived here 20 years and having to pay and file while seeing other countries’ nationals not having to do that, I just think it’s grossly unfair.
“It’s taxation without representation,” she added.
A further cause of the willingness of US expatriates to give up their citizenship is attributed to the banking regulations laid out in the USA Patriot Act. This act dictates that people who wish to hold a bank account in the USA must have a US address and the intention of the law is to prevent money laundering and the flow of funding to terrorist networks. However, for the average law abiding US citizen, the law entails that US citizens living abroad cannot technically have a US bank account and therefore cannot access financial services.
Andy Sundberg, also from the advocacy group American Citizens Abroad, discussed this: “These banks are closing our accounts as acts of prudent self-defense.” The result, he said, is that expats become “toxic citizens.”
Relinquishing US citizenship is straightforward for those expatriates who wish to do so. US citizens can give up their passport by visiting the US consular in their host country and signing an oath. Expatriates who do relinquish their passport will still be liable for any outstanding tax bills or military obligations.
Read the full article: http://www.nytimes.com/2010/04/26/us/26expat.html