Record numbers of Americans renounced their United States citizenship last year (officially, 2,999). Even more may end up doing so this year.
The Treasury Department reports quarterly on how many Americans have formally renounced. But by tax lawyer Robert W. Wood’s reckoning, “these numbers are under-stated, some say considerably.”
Americans giving up their citizenship is a trend that Independent Living identified in its early stages more than two years ago. Now it’s catching the attention of the mainstream media.
As CNBC reported (September 10, 2014), “The U.S. is the only country in the world which levies taxes on the basis of citizenship rather than residency… Expatriate Americans are renouncing U.S. citizenship in record volumes because of increasingly onerous tax-filing requirements – and the number doing so is likely to continue rising.”
Hikes Exit Fees by 422%
Faced with growing numbers of expatriates ditching their citizenships (along with all future tax liabilities to the IRS), the government has responded by jacking up the fees it charges for renunciation.
On August 28th, the State Department issued a rule raising the “administrative fee” for renouncing U.S. citizenship from $450 to a whopping $2,350.
State Department bureaucrats insist that they’re not being petty or punitive. Per their official notice to the public, they raised the renunciation fee by 422% to $2,350 in order to compensate for bureaucrats’ “time and labor” in processing requests. Some compensation for pushing paper!
On top of the hefty new fee, Senator Chuck Schumer (D-NY) wants to impose a punitive 30% exit tax on Americans who say goodbye to the U.S. for good. He’s been unsuccessful so far in getting legislation passed to that effect.
But his buddies in the Obama administration seem intent on making the process more expensive and more arduous at the bureaucratic level.