Americans are fleeing the country. For keeps. U.S. citizens are moving away and ditching passports in record numbers, saying goodbye to America.
Why? Taxes are screaming upward at a steep incline, socialism is creeping, and regulations are heaped on, to a backbreaking point.
The number of citizens renouncing citizenship is surging this year, soaring six-fold in the second quarter from the prior year, according to Bloomberg News. This piggybacks onto a “sevenfold increase in Americans renouncing U.S. citizenship between 2008 and 2011,” Time magazine reported. The number of exiting citizens is expected to set a record by the end of 2013. Worse, the government is introducing scorching penalties against Americans who have already had enough with federal socialism and are making the once-unthinkable decision to move to another country.
The United States is a rarity among countries in that is the only nation in the Organization for Economic Co-operation and Development that taxes citizens on worldwide income, according to Bloomberg. If they live and work in another country, they are double-taxed — they must pay U.S. taxes even though they don’t use U.S. government services.
Painfully, if these Americans renounce their citizenship, the U.S. imposes an expatriation tax to penalize them — including taxes on deferred compensation, on expatriates’ estates left to children who remain U.S. citizens, and a 15 percent extra tax on any gain from the sale of property when leaving the country, unless an exemption is warranted.
Part of the spike in renunciations of American citizenship is due to the Foreign Account Tax Compliance Act, which imposes inflexible requirements against all U.S. citizens who live outside the country. The law requires them to report all the money they have in foreign accounts and all the money they earn and keep overseas. What goes unstated by the mainstream media is that estimates of the additional revenue raised from this enormously complex act will be heavily outweighed by the cost of implementing the legislation. Wikipedia says the law will raise $792 million more in taxes each year over the next 10 years. But compliance costs to the government and financial institutions are estimated at $8 billion a year, about 10 times more than the amount of estimated revenue.
Where does the U.S. government get the arrogance to think it has the right to any earnings produced by Americans anywhere else on the globe? Our federal government is the only OECD government that imposes such a burden on its citizens, and that includes undemocratic countries like China. That dubious stature also violates the “benefits principle” of taxation, a pay-for-what-you-get approach that says you shouldn’t be obligated to pay more in taxes unless you benefit more.
This oppressive behavior by our government, and its jacked-up taxes, are forcing Americans to renounce citizenship. Remember the American Revolution rallying cry, “No taxation without representation”? Taxing Americans who live abroad, most of whom do not vote in U.S. elections, violates that founding mantra. A just cause of the American Revolution was rebuking a British government that taxed American colonists overseas on the basis that they were British subjects. Those colonists rebelled, and rightly so.
We have arrived at a point where citizens of many foreign countries have more freedoms than Americans. At least most foreign citizens can work, conduct business and open bank accounts outside their nation without interference. Americans are restricted by the Foreign Account Tax Compliance Act.
So what do we have here?
A government that penalizes a citizen’s freedom to give up citizenship when faced with confiscatory tax policies imposed by that same government, or who have parted ways with the policies of that government;
A government with the attitude that it has the right to monitor, control and tax citizens who live or work anywhere abroad, and to punish them for looking out for their own interests by avoiding taxation;
A web of overly burdensome, costly rules that amount to a continuous nightmare for Americans operating abroad.
In short, more Americans are renouncing their citizenship because of the actions of a tax-greedy, freedom-suppressing U.S. government.