Tax changes spur Americans abroad to give up citizenship

[Judi Lynn]

Dec. 24, 2006, 12:44AM
Tax changes spur Americans abroad to give up citizenship
U.S. is the only developed nation that assigns a levy to those overseas

By DOREEN CARVAJAL
New York Times

PARIS — She is a former Marine, a native Californian and now an ex-American who prefers to remain discreet about abandoning her citizenship. After 10 years of warily considering options, she turned in her U.S. passport last month without ceremony, becoming an alien in the view of her homeland.

"It's a really hard thing to do," said the woman, a 16-year resident of Geneva, Switzerland, who had tired of the cost and time of filing yearly U.S. tax returns on top of her Swiss taxes. "I just kept putting this off. But it's my kids and the estate tax. I don't care if I die with only one Swiss franc to my name, but the U.S. shouldn't get money I earned here when I die."

Historically, small numbers of Americans have turned in their passports every year for political and economic reasons, with the numbers reaching a high of about 2,000 during the Vietnam War in the early 1970s.

But after Congress sharply raised taxes this year for many Americans living abroad, some international tax lawyers say they detect rising demand from citizens to renounce ties with the U.S., the only developed country that taxes its citizens while they live overseas. Americans abroad are also taxed by the countries in which they live.
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http://www.chron.com/disp/story.mpl/nation/4422524.html

[Infinite Hope]

1. That's seems like a crime. Though there's something important to look at...

I believe they're receiving the benefits of U.S. citizenship in programs and, if in danger, the military would be there to rescue them and take them out in an emergency - this comes with an expensive price take. So it's a touchy issue.

[sarcasmo]

3. "Benefits of U.S. citizenship" I am curious as to what benefits you speak of.

The Military rescuing someone is almost laughable.

[Sam1]

4. Haven't Been any since the Slaughterhouse cases

[Lydia Leftcoast]

5. The problem, as the article says, is that most countries do not tax

citizens who live abroad. Americans are required to file income tax returns indefinitely, even if they never or rarely visit the U.S., and even if they have to pay taxes to their country of residence. (There's a form you can file to have your foreign taxes dedcuted, but it's complicated--I know, because I tried it and decided that getting credit for the small amount of Japanese tax that had been witheld from one of my payments wasn't worth it.) There's an exemption, but expats can easily top it. One of my expatriate friends turns down work, even though he could use a supplement to his income, because he'd then have to pay U.S. taxes in addition to Japanese taxes.

[maddezmom]

2. We're expats on our third assignment

But for us it's always been short-term so it's not something we'd consider.