As many current and aspiring expatriates of the United States are aware, the number of Americans renouncing citizenship has been on the rise over the past decade or so.
Once the blue passport was sought by people worldwide, and flashed with pride by its bearers. The nations of the world recognized its holders as those who perhaps enjoyed more freedom and prosperity. Many nations opened their arms, banks readied their vaults and various business opportunities unfolded before them.
However, as the citizenry began to wake up to the fact that the state perceives them as property, the brilliant blue cover of a US passport lost much of its luster. The ominous taxes that continued to be imposed along with reams of draconian regulations took their tolls. Being only one of two countries in the world (Eritrea is the other) that requires its subjects to report and potentially pay taxes on all international income has certainly helped to build the resentment from both citizens and the international community alike.
Internationally, warmongering and imperialistic pursuits didn’t help. This, along with the narcissistic attitudes of many Americans and the eventual impositions of the IRS and other alphabet soup agencies that form the long arm of US injustice and arrogation wore down once strong, vibrant and mutually beneficial relationships.
Blessing or Curse
Today, many banks shun the little blue book. If you are from just about any other country, they open their arms to new business. But the penalty exacted by the strength of US banks, the IRS, the caving of various governments to the political pressure of the US and the asinine FATCA invasion have resulted in banks closing their doors to US citizens.
As a result, more of them are leaving the US each year. Some just leave and work elsewhere for vocational reasons. Others want to live somewhere specifically, so go for it. But an ever growing number find ways to leave the confines of the US Inc in order to escape the insanity of the state imposing on their every move. They’re tired of the over-regulation and seemingly endless taxes on every move they make, unless it’s illegal, of course. A growing number of these are renouncing their citizenship.
As recently as seven years ago (2008), there were only 235 who renounced. That more than tripled the following year, then doubled again in 2010 to 1485, the year FATCA was implemented. Interestingly, it was that year that the US decided it should be charging to permit people to escape its clutches. The fee that year was $450. This resulted in an increase of only about 300, to 1,781 in 2011.
Something odd happened in 2012. Numbers are supposed to be reported quarterly, but two quarters were missed, so the total came out to 932. However, those lost numbers were apparently reported the following year, resulting in 2,999 reunciations. That year also saw the fee increase to $990.
So, how did a 220% increase in the price for freedom from the US affect renunciations? The following year, 2014, saw an increase to 3.415 citizens willing to pay for the keys to their US tax shackles. Incidentally, when getting grilled by the consulate over why you’re renouncing, stating that it’s for tax purposes is inadvisable. They may deny you. Of course, they may deny you because they have indigestion too, but most who’ve I’ve read about found the process fairly straightforward, other than the onerous fees. But it gets better.
Last year the fees were raised to an astounding $2,350, ostensibly because that’s what it costs to do the paperwork. Yet that year saw the most dramatic increase in renunciations so far, at around 6,000.
When is Being Owned NOT Slavery?
Make no mistake – this is the blatant pricing of freedom. When a person who is forced to be a tax slave, regardless of where they live and the source of their income, then it is clear that the extorting agent is claiming ownership. Just how much is your freedom worth? According to US Inc, $2,350 will remove your shackles. Of course, if you’re worth more than about $2,000,000 or have had a decent income over the past few years, you will be rewarded with paying an expatriation tax on top of any taxes you have already paid. If you haven’t kept current with your filing, it could get much worse.
If you expatriated on or after June 17, 2008, the new IRC 877A expatriation rules apply to you if any of the following statements apply.
- Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than a specified amount that is adjusted for inflation ($151,000 for 2012, $155,000 for 2013, $157,000 for 2014, and $160,000 for 2015).
- Your net worth is $2 million or more on the date of your expatriation or termination of residency.
- You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.
A Threat to Freedom of Speech = A Veiled Offer of Freedom?
There was recently a string of tweets and articles from the PEOTUS regarding the burning of flags. Such a right is guaranteed by the Constitution, but we all are well aware that regulations haven’t bowed before constitutional law for decades. Even though the Supreme Court has ruled that it is someone’s protected First Amendment right, many continue to strive to meet out punishment for any who would be so traitorous as to burn the emblem of those who would claim to own them. One of these would-be oppressors is Hillary, who introduced legislation in 2005 that would require a $100,000 fine and one year in prison for anyone burning an American flag.
Apparently the president elect has similar ideas, but with a very interesting twist. He was quoted as stating:
Nobody should be allowed to burn the American flag – if they do, there must be consequences – perhaps loss of citizenship or year in jail!
You mean, that’s all it will take? Then you get a choice?
This, of course, prompted an interesting string of comments around the interwebs. Peter Schiff was all over it.
If all that is required to lose U.S. citizenship is burning a flag, there are Americans all over the world who would gladly burn one if it gets them out of paying the $2,350 filing fee, or for wealthier Americans paying the far more onerous exit tax!
So, I did some looking around. You can buy a 3’x5′ American flag for just $15.55 on Amazon.
Of course, you can buy one for about any price you want to pay. But this seemed like a pretty reasonable price and substantial enough to actually catch flame visibly enough to make sure the evidence is irrefutable.
#Satire aside (kinda), I really have no desire to burn the flag. To me, it’s just senseless noise. But neither do I desire to continue to be considered a tool of the state. Renunciation is a distinct possibility for my future.
Depending on your goals, you may require another passport before renouncing. In most cases, that means at least five years as a half-time resident in the country you choose. In other words, you’d need to spend at least 185 days of each year there in order to satisfy the local requirements. This varies from country to country, but it seems somewhat standard with many South American countries.
There are services that will sell you instructions and respond to email questions regarding permanent residency (not including a passport) in their country for about $500-$1,000. If you know the language, or have someone that can help, and are pretty confident in your ability to navigate, this might be a great option. This is particularly true if you don’t have much in the way of expendable cash.
For those who would rather have someone either walk them through it or take care of most of the legwork for them, the sky is really the limit. However, if you’re paying more than about $5,000 for really good service, depending on additional options, then you’re probably paying too much. Perhaps there are countries where higher fees are merited, but in most countries the work required isn’t really worth more than a few thousand bucks. The process usually takes a little over two years, depending upon bureaucratic hurdles.
Once you have permanent residency, you’re on the road to getting your passport, if you care to. Again, this will take about five years.
You don’t have to get a new residency or citizenship though. There is provision for renunciation as a stateless person as well. Of course, you are warned by the US government that doing so is inadvisable because you would no longer enjoy the protection of any government.
A final note on this: I’m no law expert, but it appears that the charging for renunciation may in fact be illegal. For those who want to dig further, you might start at the U.S. Department of State – Bureau of Consular Affairs and with Cornell’s Legal Information Institute.
Remember, it’s on you to do your own research. Due your own due diligence and caveat emptor apply, especially when dealing with international laws. These are the apparent options before you, but often we find hidden gems to help us along our way. And, whether you seek to renounce or pursue another path, may you enjoy freedom of both mind and body.