Zinnia

I recently read an article about U.S. citizens living abroad who are renouncing their U.S. citizenship because they don't want to pay U.S. income taxes since they aren't living/working in the U.S on a full-time basis.

Would you ever renounce your citizenship?

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greenjumper

I don't think I ever would. (I don't like to say *never*). But I doubt it. Maybe if I was 100% sure that I'd never come back or if the United States did something super horrible to me. That's unlikely though. I know many Japanese Americans received a ton of backlash when they renounced when all the concentration camp stuff went on...

I'm not currently a citizen of any other nation besides the U.S. ...so I'd be sovereign and I don't think I like the idea of that. I also wouldn't be able to vote in elections. I haven't done a ton of research on being (a?) sovereign but I know a lot of people say there are benefits of it (although most of the people say it in a way that makes it sound like they are just trying to "beat the system"). Although, I'm sure there are legitimate reasons. I just haven't done the research.

I really don't like the idea of "beating the system". I feel like people who don't pay taxes still get to enjoy all the benefits that other taxpayers are paying for. I don't think that's fair. If you are able to pay, then pay. If someone feels like the system is wrong, I believe they should work on getting laws changed instead of being covert about it. Just my opinion

And, even though the people aren't living in the U.S. I pretty sure they still have certain benefits that come with being a U.S. citizen.So, they really need to think hard about what they are giving up. Plus, if they ever wanted to come back...wouldn't it be a hassle to get citizenship reinstated?

Idk, to each their own.

BlackAngelPlayah

I don't think it should have to come to that. Why are they making them pay income tax when they aren't living in the US OR working there? Sucky policy, but not enough to make me give up my citizenship.


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NetG

I can't foresee a situation where I personally would, but I can see doing it if living elsewhere with a new citizenship and no intention of ever getting social security or any other sort of US benefit. I have a friend who lives in England now and is likely to eventually relocate to his wife's home country, never returning here. If he didn't have some ties he does to the US (he owns land and is a tribe member) I don't see why he wouldn't consider it.

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damsel_fly

I wouldn't renounce my Canadian citizenship.

Once a person renounces their citizenship, they should never be able to get it back.

claudine19

I'd miss voting.

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midgi

As much as I love the thought of living somewhere else, I don't think I could renounce my citizenship. Not sure why, really, but that's my gut reaction.

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mad scientist

YES!! For exactly the reason that the OP mentioned in the first post.

The US is the ONLY country that taxes based on citizenship rather than on residency.

I am a US citizen by birth. I moved to Canada when I was 9 months old. I have lived in the US for less than 5 years of my life and I have never earned one penny of income in the US. I have absolutely no financial ties to the US.

And yet, by American law, I am required to file US taxes every year on my income that was earned entirely in Canada. I have to report all my bank accounts, which I hold jointly with my Canadian husband to the Department of Treasury because the US government sees them as "off-shore accounts" held by a US citizen. We are talking about my local chequing account and any account for with I have signatory power (ie. a charity account, if you do payroll for your employer etc...). The threated fines and penalties for NOT disclosing such information are draconian ($10,000 per account per year).

There are millions of "accidental Americans" like me who have been caught up in an extremely stressful situation. We are not tax evaders as the US congress would like you to believe. I pay a much higher level of tax in Canada than I ever would in the US. But the fact that US feels that they have any business in my financial affairs and those of my wholly Canadian family is absolutely ridiculous.

Unfortunately renouncing US citizenship is not easy either. You have to be given permission to renounce and there is a wait list of years to do so. And there are concerns that as an ex-citizen you may have difficulty entering the US, which is a difficult position for me to be in as I have to travel sometimes for work and I live 10 miles from the US border. So I'm stuck in limbo.

Anyways, thank you OP for starting this thread. Ive been wanting to bring up this point here for a while because I don't think most Americans realize how much the IRS is attempting to overstep its boundaries and is royally pissing off other governments with its demands.

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NorahBugg

No, they shouldn't be allowed back in if they do that. It sounds like a Republicanesque cheat tactic or something. (No offense to Republicans.) MSNBC should check into it.

mad scientist

I don't know how old you are, but lets say you decide to go to England for a year for school. You meet an English guy and decide to stay, get married and have kids. Fast forward 10 years down the road, do you think that you should still be paying taxes to the US on your UK income? You and your English husband start a small local business in the UK. You would need to file a US tax return for that business. Your retirement savings accounts or educational accounts for your kids which are not taxable in the UK may still be taxable in the US. So you lose your retirment savings advantages.

Your kids who may have never set foot in the US would AUTOMATICALLY be considered US citizens and would also have to file US taxes. Does that sound fair?

There are ways of separating legitimate tax cheats (and off-shore account holders) from the average no-longer-a-US-resident US citizens but so far the US congress has decided instead to paint everyone with the same brush. That's why people feel that they need to their US citizenship.

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Zinnia

You are welcome, Mad Scientist.

I have always wanted to live abroad and was quite shocked to read that I would have to pay U.S. taxes even after living abroad for many years.

The article made it seem so easy to renounce...just go to the local embassy and sign some papers. It is very interesting that it takes years to happen.

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mad scientist

There's been a lot of press about taxation by citizenship (which is a model on the US and Libya use, apparently) lately in Canada because we are home to the most US citizens outside the US. I had no idea that I was supposed to be filing US tax returns until last year. But the US is cracking down on "off shore accounts" and people like me have been entangled in the web.

If you google FATCA, you will find the reason why most expats like me are worried. The US govt has enacted a law that will forbid overseas banks to invest in the US unless they divulge the financial information of all US Citizen account holders. There are banks in Europe who are refusing to open accounts for people with US birthplaces because they don't want to get entangled in this issue. Its a law designed to catch tax evaders but its going to seriously hurt US business if it hinders foreign investment.

At the same time as they are beginning this witch hunt they are also reducing funding to embassies and consulates abroad. Many countries have only one embassy office which are overworked and understaffed. So depending on where you live, how close the nearest US embassy is and how well staffed they are, the waits can be long.

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Eilonwy

Are you talking about people who renounce US citizenship after becoming citizens of other countries? Or are people choosing to be stateless?

mad scientist

I'm assuming we're talking about dual citizens. Being stateless would be a BAD idea I think.

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NorahBugg

I'm a little too old to be thinking about that, but, in that situation, I would settle in England, become a citizen and have my U.S. citizenship revoked, if I did not want to pay U.S. taxes. I know it may take time, but that's a disadvantage to living in another country. The people that have the means to travel abroad and whatever have the means to pay dual taxes, I'm quite sure. If they don't, they should've thought about it first.

I'm thinking more along the lines of people who go back and forth, who own property and businesses abroad, but, also have homes in the U.S. and live there part-time or most of the time... I'm not sure what the difference is b/w renouncing and permanently giving up citizenship, but it sounds like tax dodging to me. Tax cheats are tax cheats. Don't mess with the IRS.

Sorry, I quoted the wrong post of yours before, mad scientist. I'm responding to the one you posted to me.

curlyarca

My thoughts on this issue are still developing. However, although I think the law is antiquated (agree it should be based on residency and not citizenship), I think renouncing your citizenship is kind of stupid and also a privilege that only the wealthy can afford. I also think if you renounce then you shouldn't be able to get it back, but maybe the door can be open for permanent residency status. It would cut down on the potential for game. For example the Facebook guy (Eduardo Saverin) renouncing bothers me because hypothetically he could just buy it back.

I don't see many poor people renouncing. Citizenship is more important when you don't have assets, e.g., your own private island to jet off to when stuff goes down.

If I had enough financial and physical security and another citizenship wherever I resided, I may consider renouncing, but that's hypothetical. Right now I am in no position to consider it.

Question: What do you guys think about entitlements? Should people who are citizens but not residents be allowed to collect entitlements?

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Speckla

No.

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frau

but if you are a u.s. citizen do you still get social security when you're old even though you've lived most of your life abroad?

Josephine

Never because I plan on living here in the long run. If for some odd reason I decided to settle down somewhere else and not return...I don't know..like someone else said, just a gut reaction not to but I would be logical about it. It would be a damn hard thing for me to do if it came down to it. It's who I am and would feel like I'm giving up party of my identity.

NetG

You get social security based upon what you've paid in.

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The pews never miss a sermon but that doesn't get them one step closer to Heaven.
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But at least the pews never attend yoga!