Expatriate vs. Citizen, Why Americans bother less to give up their citizenship?
- Kiran Chaitanya
- Nov 12, 2019
- 4 min read
As you can see in the title Expatriate vs. Citizen, the word ‘citizen’ has taken a secondary place. So is the priority of thousands of Americans living in other countries. Americans living abroad, few with a heavy heart, prefer being an expatriate and are renouncing their American citizenship in record numbers.
Stats
According to the data from the US Treasury Department, 2017 had the highest number of American citizens renouncing their citizenship. Analysts believe that numbers for 2017 could go up to 7000 citizens. This is an alarming number according to the analysts and the US Government. These numbers have witnessed a mind-blowing surge, especially in the past three years. The last two year average of increase in this percentage is consistently hitting close to 26% compared to their respective previous years.
According to the stats, 5411 people have renounced their American citizenship in 2016 and close to 7000 in 2017. Only in the third quarter of 2017, as much as 1400 citizens have given up their American citizenships.
Reasons
American citizenship is one of the most desired brands in the whole world. These record numbers are supposedly a big shock to the desirers of the country and the ‘brand’. Due to the open statements of renowned personalities in social media, residing Americans think it is because of the Trump presidency.
However, the real reasons contributing to the renouncements seem different and a little distressing.
These renouncements can be traced to various reasons like the ones mentioned below
American Taxation policies
Taxation policies of the Americans living abroad are the most significant of the reasons that contribute to these renouncements. Americans living abroad face taxes from the USA (where they hold the citizenship) and also from the country that they reside in.
Thanks to Obama. It was during his administration the FATCA (Foreign Account Tax Compliance Act) bill became law. The primary objective of this act is to restrain tax evasion of US citizens living or working abroad. This act requires the foreign establishments that hold the assets of the American ex-pats to report the account or face a tax of 30%. However, this act has had adverse effects on middle-class Americans living abroad. The adversities can be well understood from the letters written by American citizens to the Obama family here[k1] .
Political reasons and safety
While the Trump presidency may not be an ultimate contributor to the renouncement of citizenship, the role of it can’t be denied. There have been facts which suggest that US citizenship holders in Canada and in the US wanting out, citing the Trump residency [k2] as the reason. This fright is being supplemented by numerous attacks on minorities and immigrants which are directly or indirectly motivated by Trump’s campaign. These incidents have made the rest of the world question the safety quotient of America.
This may not be an official or factual reason for renunciation. But can be perceived as a reason based on the recent events happening in the US.
Better countries
Post Second World War, the USA, and USSR emerged as superpowers. During the 1970s, the USA was the only superpower in the world with substantial development and opportunities in every field. These facts made American citizenship the most desired one amongst the rest of the world.
However, the situation is not the same now. Canada and many Scandinavian countries are the most preferred destinations and are the desired citizenships now. In the past 4 decades, these countries have witnessed commendable growth with sustainable development and also preserving the ecological balance of geography.
Many European countries are considering abolishing cars that run on fossil fuels.
Sweden has implemented a six-hour workday.
Sweden and Norway are battling against each other to import garbage from all over the world to generate energy.
These developments in other countries have made the American dream and its citizenship not a fancy one anymore.
Dual citizenship holders
One fact that can’t be ignored is that a certain amount of people who consider renouncing citizenship are dual citizenship holders. It means they have an option otherwise. These dual citizenship holders are giving it up when they realize that they cannot afford it anymore. Or don’t consider it a luxury statement. Anymore.
Let us look at the classic case of Mr. Eduardo Saverin – Co-Founder of Facebook, who is of Brazilian origin, was holding an American citizenship. But he moved to Singapore in 2009 where he is driving his Bentley and investing in promising startups.
He renounced his US citizenship in 2012 just weeks ahead of Facebook’s massive IPO.
Although he doesn’t claim the renouncement’s reason to be tax, it is believed that it was a move to avert unnecessary tax payments to the US Government. For him, American Citizenship doesn’t seem to be a ‘keeper’ considering his situation.
Whether or not, the US Government is planning to do anything to minimize the number of people giving up American citizenship is still unclear. One clear fact is that the renouncement is a costly issue that can swipe away $ 2350 or more if one considers giving it up.
[k1]Hyper link the given links here.
[k2]This can be hyper linked here if necessary
http://vancouversun.com/news/local-news/u-s-tax-laws-politics-pushing-more-dual-citizens-to-renounce-citizenship
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