Record Number of Americans Saying ‘Goodbye America’

Record Number of Americans Saying ‘Goodbye America’

#Americans #passports #expat #citizenship

Recently, President Trump hosted a naturalization ceremony at the White House, aired during the Republican National Convention.

You have earned the most prized, treasured, cherished, and priceless possession anywhere in the world,” he told the 5 new United States citizens. “It’s called American citizenship.”

Prized? Perhaps, but not priceless.

A record number of Americans are renouncing their citizenship. In 1-H of this year, 5,315 Americans gave up their citizenship. That puts the country on track to see a record-breaking 10,000 people renounce US citizenship in Y 2020. Until 10 yrs ago fewer than 1,000 Americans per year, on average, chose to renounce their citizenship.

The Big Q: Why are so many people abandoning the United States?

While many liberal Americans threatened to move abroad after President Trump’s election in Y 2016, rising renunciations are not directly attributable to election results. The trend began in Y 2013, midway through The Hussein Obama administration. That year about 3,000 Americans gave up their passports 3X more than the norm.

People are not fleeing the US because of the virus chaos.

The paperwork for the 5,315 renunciations completed so far this year began long before C-19 attached the country and made Americans global pariahs.

Most Americans giving up their US passport already live abroad and hold another citizenship. In surveys and testimonials, these people say they are dropping their US citizenship because American anti-money-laundering and counter terrorism regulations make it too onerous and expensive to keep.

In Y 2010, Congress passed the Foreign Account Tax Compliance Act, which requires foreign financial institutions to report assets held abroad by US citizens and Green card holders.

The law, intended to identify the non-US assets of all taxpayers, ended up strengthening a Y 1970 anti-money-laundering law, the Foreign Bank Account Report, which requires citizens to declare all foreign assets to the US Treasury Department.

Together, these 2 regulations represent a major burden for low-income and middle-income expats. Until Y 2010, they could ignore or remain ignorant of the Foreign Bank Account Report because there was little chance the US government would discover their noncompliance.

They were not avoiding taxes. Of the roughly 9-M US citizens living abroad, most do not earn enough to owe Uncle Sam a Buck. Only expatriates who make over $107,600 in foreign income are required to pay US taxes.

According to a 2018 survey by InterNations, an expatriates’ networking organization, the education sector is the largest employer of Americans living abroad, at 29%. Few educators make 6 figures. In the US, the average teacher earns $60-K. In most other countries, it is even less.

Still, all American expats, even those who have lived abroad for decades, earn no income in the US, and hold no US assets must submit an annual tax return to the Internal Revenue Service (IRS). Now, ever since Congress strengthened anti-money-laundering and counterterrorism financial reporting requirements, many have had to hire costly international accounting firms to do their taxes.

The consequences of noncompliance are severe: forfeiting up to 50% of all undeclared assets held overseas

Becoming American” is a favorite topic in US literature, popular history and the media.

There are entire sections of university libraries devoted to books and studies on the topic.

But, there is little written about becoming unAmerican.

Renouncing US citizenship is pretty complicated and costly. It involves 1 or 2 interviews with a consular officer, a $2,350 administrative fee, expensive compared to other wealthy countries and potential audit of the citizen’s last 5 yrs of US tax returns.

The process takes a yr. Once you have successfully become unAmerican, you need to submit a tax return to the IRS the year after renouncing. After that, your ties to the US government are severed.

The formal, bureaucratic process of becoming unAmerican resembles the process of becoming American.

Early in American history citizenship was clumsy, informal, and changeable.

Colonists during the Revolutionary War often switched their allegiance, declaring themselves Patriots or Loyalists, depending on personal circumstances or which army controlled their town at the time, according to historian Donald F Johnson in his forthcoming book “Occupied America.”

As history shows, the notion of American citizenship as the “most prized, treasured, cherished, and priceless possession is a relatively recent invention, and it may not be permanent.

With 10,000 US passports expected to be ‘canned’ this year and another 23% of American expats, about 2-M people now saying they are “seriously considering” renouncing citizenship, becoming unAmerican is starting to sound American.

Have a healthy week, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.