Bye, Bye American Pie!
More Americans than ever have recently decided to renounce their U.S. citizenship, according to new government data reported on the International Tax Blog.
Last year, 3,415 Americans terminated their long-term U.S. residency. This year, the third quarter alone brought 1,426 recorded expatriates — the highest number ever recorded for a single quarter.
If the trend continues, 2015 will likely surpass the total from last year. Only 195 more fleeing Americans are needed for a new record. If that happens, it will be the third consecutive year that the number of Americans giving up their citizenship has increased.
Who are all these deserters of the great democracy and why are they doing it?
Some of the increase can be traced to the surge in Canadians with dual-citizenships rushing to surrender their U.S. passports. Taxes can get complicated for folks with dual residency.
But the increase is also coming from the 7.6 million Americans living abroad. The U.S. taxes its citizens on all income regardless of where it is earned or where you live and tougher tax regulations designed to crack down on tax evaders have only made matters worse, reports CNN Money.
“The Foreign Account Tax Compliance Act requires individuals to report certain foreign assets, and for banks to disclose all foreign accounts held by Americans. The new law comes on top of another rule that requires Americans to disclose foreign bank holdings above $10,000,” the report says.
So this clearly isn’t just about the one-percenters trying to lower their tax bite — which coincidentally, is illegal in the U.S.
Other individuals make the decisions for family reasons, like my friend who married a Japanese citizen and bid farewell to the U.S. forever.
Letting go of your American roots isn’t cheap. In the U.S., it costs $2,350 to lose your citizenship, the highest rate of any country, according to data from Movehub.com. Second in line is Jamaica, which at $1,010 is more than 50 percent lower.
Are your taxes so bad that you would ever consider leaving the U.S. for good?