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Why More and More Americans are Abandoning Their US Citizenship
The Daily Reckoning ^ | 07/03/2012 | Eric Fry

Posted on 07/04/2012 7:11:39 AM PDT by SeekAndFind

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07/03/12 Laguna Beach, California – In November, millions of Americans will trudge to their local polling places to cast votes in the hope of improving their lives here in the USA. Between now and then, a few hundred Americans will vote with their feet in the hope of improving their lives outside the USA.

Last year, nearly 1,800 Americans surrendered their citizenship. In a nation of 300 million folks, 1,800 émigrés is hardly a rush for the exits. But the recent trend is, nevertheless, intriguing.

Number of Americans Per Year Who Renounced Their US Citizenship

As recently as four years ago, only 200 people checked out of America for good. Back then, surrendering US citizenship would have seemed as unthinkable to most Americans as declining a free vacation to Hawaii to pay for a vacation in Newark. It would have seemed as crazy as:

Giving up citizenship would have seemed as incomprehensible as…go ahead, create your own simile.

Bottom line: Surrendering US citizen was absolutely unthinkable. But not anymore. Now it is “thinkable,” albeit still relatively rare. The absolute numbers are still tiny, but the trend conveys a very large message: Discontent is on the rise.

Increasingly, the used LeSabres and Augusta Municipals are winning the contest. And probably not because they are so alluring, but rather because the “Aston Martin” is starting to sputter like a used moped and “Augusta National’s” fairways are starting to sprout more weeds than its deep rough.

To be clear, your California editor remains an American citizen with a valid American passport…and no pending petitions in any American embassies to surrender his citizenship. His observations, therefore, are not personal…but they are heartfelt.

When Americans begin abandoning the “Land of the Free” to seek greater freedom elsewhere, it is time to sit up and pay attention; it is time ask yourself, “Why? Why are they leaving? What’s wrong?”

Is it just a “tax thing” or are other forces in play? Is it because folks don’t like:

Who knows the exact reason why 1,800 Americans chose to leave last year — nine times as many as left four years earlier. Certainly, each one of them had their reasons. But like a corporate insider that sells his own stock, there’s one thing you know for certain about his motives: he is not selling because he believes the stock will go up. Maybe he doesn’t believe the stock will go down, but no one sells a stock they believe will go up.

Likewise, Americans who bail on their country may not think things are going to get any worse any time soon, but they clearly do not believe things are going to get better. So far, the pitter-patter of footsteps heading for the exits is barely a murmur…but the murmur is getting louder.

Eric Fry
for The Daily Reckoning

Author Image for Eric Fry

Eric Fry

Eric J. Fry, Agora Financial’s Editorial Director, has been a specialist in international equities for nearly two decades. He was a professional portfolio manager for more than 10 years, specializing in international investment strategies and short-selling.  Following his successes in professional money management, Mr. Fry joined the Wall Street-based publishing operations of James Grant, editor of the prestigious Grant's Interest Rate Observer. Working alongside Grant, Mr. Fry produced Grant's International and Apogee Research —  institutional research products dedicated to international investment opportunities and short selling. 



TOPICS: Business/Economy; Society
KEYWORDS: americans; citizenship; expats; renouncecitizenship; uscitizens

1 posted on 07/04/2012 7:11:48 AM PDT by SeekAndFind
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To: SeekAndFind
A considerable spike since 2009.

I wonder what the driving force behind that is?

2 posted on 07/04/2012 7:20:16 AM PDT by EGPWS (Trust in God, question everyone else)
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To: SeekAndFind

Going to live in another country is one thing....giving up your U.S. citizenship is another,
Good riddance.


3 posted on 07/04/2012 7:21:33 AM PDT by nuconvert ( Khomeini promised change too // Hail, Chairman O)
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To: SeekAndFind

This is mainly Americans working abroad. Part of this trend is because the US is the only country which taxes income earned in foreign countries. I think one of the more recent driving issues is that now foreign banks have been given extremely burdensome new reporting requirements for Americans working abroad to the point where many are now refusing to provide service to US citizens.


4 posted on 07/04/2012 7:21:51 AM PDT by microgood
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To: EGPWS

We are a nation of 315 million. These numbers, less than 2,000 a year are statistically meaningless. The numbers are infinitesimal.


5 posted on 07/04/2012 7:24:59 AM PDT by kabar
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To: SeekAndFind

6 posted on 07/04/2012 7:28:21 AM PDT by Hotlanta Mike (Resurrect the House Committee on Un-American Activities (HUAC)...before there is no America!)
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To: EGPWS

I wonder what the driving force behind that is?


I suspect it has to do with double taxation on income.

When I was working in Switzerland in the 80’s I had to still file with the IRS every year and report foreign earned income. At that time I believe anything over $75,000 per year was taxed again by the US federal government.


7 posted on 07/04/2012 7:31:24 AM PDT by Hotlanta Mike (Resurrect the House Committee on Un-American Activities (HUAC)...before there is no America!)
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To: nuconvert

But where to go? Europe is a basket case, the ME a smoldering mess, no decent place in Africa (including SA), and leftist governments in most of S. America.


8 posted on 07/04/2012 7:32:00 AM PDT by expat2
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To: SeekAndFind

Its not like American citizenship means anything anymore.


9 posted on 07/04/2012 7:34:24 AM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: Hotlanta Mike; EGPWS

I am willing to bet that ALL of these Citizen renuoncers are WEALTHY folks (AKA the 1% ).

The USA is one of only 2 countries I know ( the other one being a small African country I can’t remember ) that taxes you based on your citizenship REGARDLESS of where you earned your income.

Germans who work in America and make money here are NOT taxed in Germany for the money made here. But Americans who make money in Germany are taxed IN GERMANY *AND* America.

There was a time when an ex-pat could open a Swiss account and deposit their money there without having to inform the IRS. Not anymore. America bullied Switzerland to inform the IRS of ALL American bank accounts and the Swiss CAVED.


10 posted on 07/04/2012 7:36:29 AM PDT by SeekAndFind (bOTRT)
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To: cripplecreek

RE: Its not like American citizenship means anything anymore.

Aren’t we still the land of the free and the home of the brave?


11 posted on 07/04/2012 7:37:30 AM PDT by SeekAndFind (bOTRT)
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To: expat2

RE: But where to go?

Does Facebook co-founder Eduardo Saverin know something we don’t?


12 posted on 07/04/2012 7:39:14 AM PDT by SeekAndFind (bOTRT)
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To: kabar

FWIW,there is an entire system of statistics of rare events, which (probably) would show that the increase in abandonment of citizenship are “significant,” and worthy of further study.


13 posted on 07/04/2012 7:40:12 AM PDT by Chaguito
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To: kabar

FWIW,there is an entire system of statistics of rare events, which (probably) would show that the increase in abandonment of citizenship are “significant,” and worthy of further study.

http://en.wikipedia.org/wiki/Poisson_distribution for example.


14 posted on 07/04/2012 7:41:31 AM PDT by Chaguito
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To: Chaguito
I don't think it is significant. There are plenty of factors and variables that could contribute to this "trend."

For example, the U.S. adds one international migrant (net) every 36 seconds. Immigrants account for one in 8 U.S. residents, the highest level in more than 90 years. In 1970 it was one in 21; in 1980 it was one in 16; and in 1990 it was one in 13. In a decade, it will be one in 7, the highest it has been in our history. And by 2050, one in 5 residents of the U.S. will be foreign-born.

Perhaps our growing immigrant population will result in some wishing to return back to their home country. We recognize dual nationality, but perhaps their home country does not forcing them to make this decision.

One would have to analyze who is in the 1,800 and see where they came from, their age, their income, etc. At this point, I see these data as virtually meaningless.

15 posted on 07/04/2012 7:49:21 AM PDT by kabar
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To: SeekAndFind
Aren’t we still the land of the free and the home of the brave?

That's debatable but I'm thinking more of the non citizens taking a larger and larger piece as the line between citizen and non citizen becomes blurred.
16 posted on 07/04/2012 7:50:16 AM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: Chaguito

I would have to agree with you. If you take the net worth of those former American citizens and look at it in the long term it will have a serious effect on the USA’s bottom line.

If the trend continues to increase then the effect becomes more obvious over the short term.


17 posted on 07/04/2012 7:52:34 AM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: SeekAndFind
The USA is one of only 2 countries I know ( the other one being a small African country I can’t remember ) that taxes you based on your citizenship REGARDLESS of where you earned your income.

It's just never enough.

Other people have a right to an individuals labor and the US being a nation of rights and all....

18 posted on 07/04/2012 7:53:14 AM PDT by EGPWS (Trust in God, question everyone else)
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To: SeekAndFind

“....Aren’t we still the land of the free and the home of the brave?...”

Ummmm.....no. That all died in Nov. 2008 and is so passe’.

The recent SCOTUS decision on odongocare put the final nail in the coffin. Also, old odongo had to do a world-wide tour to apologize to the entire wide world for our “braveness” over the recent course of modern history, but its all cool...he got everything straightened out for us. /s
But hey, there are a few of us trying to throw the rotten, slimy, commie bums out of office in about 126 days or so in order to try to restore a modicum of freedom to the common American. The brave part, well, the republicans are still working on that one....they’ve got a long way to go, but a couple of us on here still have some balls.


19 posted on 07/04/2012 7:53:52 AM PDT by lgjhn23
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To: kabar

The US imports a much larger percentage of third worlders than in 1970 and immediately go on the dole. How is that affecting America in a positive way?


20 posted on 07/04/2012 7:55:19 AM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: Jack Hydrazine

I am not defending our immigration policies. 57% of immigrant headed households with children are on at least one welfare program. 25% of the adult legal immigrants who enter this country annually lack even a high school diploma. We bring in 1.2 million legal immigrants a year, far more than we need. Our immigration policies are destroying this nation.


21 posted on 07/04/2012 7:59:16 AM PDT by kabar
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To: lgjhn23
That all died in Nov. 2008

It died a lot longer ago than that by decades. We'll have to turn the clock back by at least 50 years to see a truly noticeable change.
22 posted on 07/04/2012 7:59:54 AM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: kabar

Just yesterday, Michigan governor Rick Snyder virtually signaled encouragement for resident aliens to vote. That’s a lot of foreign students and H1B visa holders.

http://www.freerepublic.com/focus/f-news/2902511/posts


23 posted on 07/04/2012 8:03:58 AM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: expat2

Loss of liberty, being microchipped under obamacare...


24 posted on 07/04/2012 8:10:26 AM PDT by aMorePerfectUnion ("I'm comfortable with a Romney win." - Pres. Jimmy Carter)
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To: kabar

What I am trying to point out to you is when you have the rich leaving America with their wealth and the poor from third world countries coming in and adding to our debt via our various entitlement programs it financially is insane.

As America continues to rush toward third world status you can see the signs of it by the increasing amount of tyranny by the Feds and States, a national debt spiraling out of control, taxes going sky high (especially after the first of this upcoming year), a debasement of the currency like Zimbabwe and the ancient Roman Empire, refusal to enforce our border laws, more regulatory burdens on business, ever-increasing entitlement spending, etc., etc., etc.

It is insanity at its finest. I think of America as a boat where there are a very small few who are drilling holes into the hull and letting water in. At one point in our history we dealt with them and stopped it for the most part. Now everyone is too scared to deal with the next generation that doing it. Those that have the means are jumping off and swimming over to other boats. And the ones doing the drilling are bringing in others who will do the same. At some point the bilge pumps won’t be able to keep up and the boat will sink. From what I see the bilge pumps lost that ability back between 1970 and 1980 and we are taking on water at an ever faster rate.


25 posted on 07/04/2012 8:16:23 AM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: expat2

Europe has a big problem with maintainng populations because of their abortion/birth control polices.. In a few years, many of them will be asking americans to move their country to maintain populations espeically when they get overrun with muslims.


26 posted on 07/04/2012 8:42:37 AM PDT by scbison
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To: scbison

Problem is: they are further down the road to serfdom than the US.


27 posted on 07/04/2012 8:45:04 AM PDT by expat2
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To: SeekAndFind

Yes, I think you are correct with this assertion of the situation. American citizens are taxed by the USA, wherever in the world they live and earn their livelihood.

The AARO (Association of Americans residing overseas) has been criticizing this anomaly for quite some time now, if I remember correctly.

Unfortunately, I don’t know whether any bill has been introduced to Congress in order to rectify the situation for Americans living abroad. At least not yet...


28 posted on 07/04/2012 9:05:01 AM PDT by Roadgeek
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To: cripplecreek

A disgrace. If citizens cannot depend on the integrity of our voting system, then our Republic is lost.


29 posted on 07/04/2012 9:07:07 AM PDT by kabar
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To: SeekAndFind

Abandon your citizenship........lose your gun rights. No Thanks.


30 posted on 07/04/2012 9:08:42 AM PDT by MachIV
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To: Jack Hydrazine; kabar

Yes, that is this humble outsider’s opinion of America’s immigration policy as well.

It seems to me now vastly out of sync with America’s national interest, and this was already one of the conclusions drawn in the Congressional Jordan report from the mid-nineties.

It seems to me that the situation is even worse now :-(


31 posted on 07/04/2012 9:14:52 AM PDT by Roadgeek
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To: Jack Hydrazine
What I am trying to point out to you is when you have the rich leaving America with their wealth and the poor from third world countries coming in and adding to our debt via our various entitlement programs it financially is insane.

How many of the 1,800 are rich? There is no doubt that we are importing hundreds thousands of the poor and uneducated into this country annually. And they will use our welfare system to further bankrupt us. They will also vote Democrat. Milton Friedman said that, “You cannot simultaneously have free immigration and a welfare state.” We have both.

The nation’s immigrant population (legal and illegal) reached 40 million in 2010, the highest number in our history. The U.S. immigrant population has doubled since 1990, nearly tripled since 1980, and quadrupled since 1970, when it stood at 9.7 million. Of the 40 million immigrants in the country in 2010, 13.9 million arrived in 2000 or later making it the highest decade of immigration in American history, even though there was a net loss of jobs during the decade. Growth in the immigrant population has primarily been driven by high levels of legal immigration. Roughly three-fourths of immigrants in the country are here legally. With nearly 12 million immigrants, Mexico was by far the top immigrant-sending country, accounting for 29 percent of all immigrants and 29 percent of growth in the immigrant population from 2000 to 2010. The median age of immigrants in 2010 was 41.4 compared to 35.9 for natives.

I am less concerned right now about the rich leaving Amnerica. Our out of control immigration policies--a product of the 1965 Immigration Act--have rapidly changed the demographics to the point that the Dems will soon become the permanent majority party.

87 percent of the 1.2 million legal immigrants entering annually are minorities as defined by the U.S. Government and almost all of the illegal aliens are minorities. By 2019 half of the children 18 and under in the U.S. will be classified as minorities and by 2042, half of the residents of this country will be minorities. Generally, immigrants and minorities vote predominantly for the Democrat Party. Hence, Democrats view immigration as a never-ending source of voters that will make them the permanent majority party.

Since the 1965 Immigration Act, our pro-population growth immigration policies have fueled major demographic changes in a very short period of time. In 1970, non-Hispanic whites comprised 89 percent of the population; today they are 66 percent; and by 2042, they will be 50 percent. The Democrats, under the banner of multiculturalism and diversity, have forged a political coalition that depends on individuals coalescing around racial and ethnic identities rather than the issues. The continuing and increasing flow of minority immigrants, mostly poor and uneducated, provides a natural constituency for the Democrats, which see them as their principal source of political power.

Currently, 1.6 million legal and illegal immigrants settle in the country each year; 350,000 immigrants leave each year, resulting in a net immigration of 1.25 million. Since 1970, the U.S. population has increased from 203 million to 314 million, i.e., over 100 million. In the next 40 years, the population will increase by an additional 130 million to 440 million. Three-quarters of the increase in our population since 1970 and the projected increase will be the result of immigration.

32 posted on 07/04/2012 9:22:55 AM PDT by kabar
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To: kabar

Yes, you are probably right. I only posted about the chi-squared distribution to point out that “significant” depends on the question you’re asking. We’re asking different questions.


33 posted on 07/04/2012 12:08:04 PM PDT by Chaguito
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To: SeekAndFind

Each American now personally funds abortion and the 4th of July.

The American Enigma.


34 posted on 07/04/2012 12:46:29 PM PDT by NoLibZone (We must get down on our knees each day and thank God that McCain/Palin didn't win in '08. Right?)
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To: MachIV

Depends on which country you will go to...


35 posted on 07/04/2012 12:58:40 PM PDT by aMorePerfectUnion ("I'm comfortable with a Romney win." - Pres. Jimmy Carter)
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To: aMorePerfectUnion
Depends on which country you will go to...

Actually, Malta would be a very nice place to settledown. They do not permit abortion or divorce in their country. They do have an income tax, and VAT but no property tax.....and to top it off island in the Med.

36 posted on 07/04/2012 1:05:42 PM PDT by mware (By all that you hold dear on this good earth, I bid you stand, Men of the West)
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To: kabar

Do you really think the Feds are going to give the data about the net worth of those who drop their citizenship and leave?

Yes, at this point the out of control immigration policies and border patrol are more of a concern because of the change in the demographic shift, but we are at a tipping point our ship is taking on a lot of water to the point that those with the means are getting out of dodge.

People in Germany as early as the 1920s saw trouble coming and started getting out. At that point the numbers were very, very minuscule compared to the numbers leaving in 1938 shortly before the gates closed.

How long will it be before America does the same?


37 posted on 07/04/2012 1:19:36 PM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: mware

And speak english


38 posted on 07/04/2012 1:20:45 PM PDT by aMorePerfectUnion ("I'm comfortable with a Romney win." - Pres. Jimmy Carter)
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To: SeekAndFind

Very few are are the very wealthy. With the US putting the heat on foreign banks to report Americans (even green card holders). There are a fair amount of ‘Americans’ who became citizens while living in the US but have since moved back to their country of origin and are now subject the reporting requirements but have little or no connection to the US.

The reporting requirements also include disclosing the accounts of a foreign spouse which many are loathe to do.


39 posted on 07/04/2012 4:07:22 PM PDT by bjorn14 (Woe to those who call good evil and evil good. Isaiah 5:20)
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To: aMorePerfectUnion

If you renounce your citizenship, you forfeit your gun rights. Period. Read the questionare on the federal firearms form 4473 that has to be filled out when purchasing a firearm from a licensed dealer in the U.S. If you renounce your citizenship which is a “yes” answer on the form, you walk with no gun. It’s federal law.


40 posted on 07/05/2012 3:23:19 PM PDT by MachIV
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To: MachIV

You are right.

Of course, if you are renouncing your citizenship, staying in the USA is pointless.


41 posted on 07/05/2012 4:47:30 PM PDT by aMorePerfectUnion ("I'm comfortable with a Romney win." - Pres. Jimmy Carter)
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To: MachIV
Title 18, USC Chapter 44, Section 922

There are exemptions for "loans" or rental for lawful sporting purposes even by aliens and citizenship renouncer's, you would have to have a valid nonresident hunting license to loan or rent a gun. There are also exemptions for corporations of person who have a corporation in the state they wish to purchase said fire arm if one owned a corporation in a state that does not prohibit foreign owned corporations of person then there is an exemption that such a corporation even if majority owned by a renouncer could still transfer a fire arm. This is the same loop hole that LLC use to get around the chief law officer requirement for class 3 tax stamps, Corporations are individual entities in the code so the former citizen is not in possession nor purchasing the firearm the corporation is and that is perfectly legal. The code is long but its all in there. There is some legal debate about if a corporation allows a person disqualified under part 5 which includes former citizens to posses for more than temporary legal sporting use. The whole thing is mentalmasterbation as if your going to give up your passport why would one remain stateside? Your are right that under the yellow form a former citizen is disqualified but there are many ways around that form I just showed the most common 2.

42 posted on 07/06/2012 5:58:45 PM PDT by JD_UTDallas ("Veni Vidi Vici")
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