Though it’s a tiny percentage of the over 5 million Americans the State Department says live abroad, the number is more than twice the total for all of 2008, when just 235 people gave up their citizenship. And, reports the New York Times, “waiting periods to meet with consular officers to formalize renunciations have grown.”
It’s not a decision made lightly, and it’s not, as some might imagine, usually motivated by politics. But more and more expats abroad are giving up their U.S. citizenship, often fueled by frustrations over tax and banking questions.
The U.S., for example, is the only industrialized country to tax its overseas citizens on income earned abroad. That income is often also taxed in the country where it is earned, which means the incoming stream (or in my case, trickle) is dipped into not once but twice.
Double taxation is not the only financial problem for American expats abroad. New banking regulations have made it harder for expats to keep bank accounts in the United States and in some cases abroad. The regulations are intended to curb tax evasion and (under the Patriot Act) to help prevent money from flowing to terrorist groups. “Some U.S.-based banks have closed expats’ accounts,” according to an article in the New York Times, “because of difficulty in certifying that the holders still maintain U.S. addresses, as required by a Patriot Act provision.”
What about you?
Are you a U.S. citizen living abroad? Have you ever considered giving up your U.S. citizenship?