Why are Americans giving up their citizenship? – BBC News Magazine
The number of expatriates renouncing their US citizenship surged in the second quarter of 2013, compared with the same period the year before – 1,131 cases to 189 in 2012. It’s still a small proportion of the estimated six million Americans abroad, but it’s a significant rise.
The list is compiled by the Federal Register and while no reasons are given, the big looming factor seems to be tax.
A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don’t comply.
So the government is blackmailing the banks by withholding money that foreign banks should receive in order to get financial information in order to tax citizens living in other countries. I wonder if this is legal? Does it include military personnel?
Some say they are tracking down tax-dodgers. Those overseas say the existing filing process is to complicated, and it is costly to get others to do it – so they skip the whole process. Now with this new regulation, they are renouncing their US citizenship. Can’t blame them.