WSJ Column on US Citizenship Renouncement

Here it is:

http://online.wsj.com/article/SB10001424052702303592404577362050670738024.html

My first observations are the comments left are for the most part not at all negative towards those who do so.

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28 thoughts on “WSJ Column on US Citizenship Renouncement

  1. excellent article. He definitely points out clearly the whole point of extra territorial taxation and the spurious reasoning that is behing “horizontal equity”, which is to make sure that you don’t succeed. I doubt that anyone residing outside of America and is actually fairing worse could ever use the argument of “horizontal equity” as a basis to ask for a direct U.S. subsidy.
    I think here about disabled people who live in Canada and receive better health care then they would in the States and who can benefit from Canadian Registered Disability Savings Plan contributions, that will provide for them in their old age. The IRS basically penalizes these plans, even though the U.S. government has no skin in this game, by taxing away their benefit and requiring expensive form submissions. I guess that this is what they mean by horizontal equity. Even the disabled in other countries can’t have a better life than those disabled who are cursed with the unfortunate happenstance to live in the U.S.

  2. I would have to take issue with the subtitlte which reads;
    America is no longer as attractive to highly successful as we like to think.
    This is because it once again paints us all who live abroad as rich and part of the intellectual elite which, due to our non U.S. residence, is a class of citizen that Americans love to hate.

  3. Pretty good article, but disappointed the author used the “official” number of renunciations of 1,800. As we all know here, that number is by logic alone MUCH higher.

  4. This is a good article with interesting comments.

    @Petros

    You should contact the author and see if he might be interestd in doing a “follow up” focusing on people who are renouncing and why. In fact one comment suggested this would be a good idea.

    How about it?

  5. @recalcitrant,

    The WSJ article and the accompanying video = an excellent commentary for the US homelanders (I agree — wouldn’t it be loverly if it didn’t again paint us all as extremely rich and successful instead of including ordinary folk, but… those headline writers have to earn their pay).

    Thank you for your comment, recalcitrant, regarding what all this does for the disabled person in countries outside the US. You pointed out well that trapping these persons within the US tax system keeps them at the same benefit level as those in the US, excluding them from the benefits their countries of residence provide.

  6. I hate seeing that “1,800” number. I’m with Zuccero and I think that figure is complete BS because there are lotsa people on here that say they were never on any list.

    The situation is pretty bad when you have professional tax advisers telling people they better avoid getting US Citizenship or a green card.

  7. This article is the holy grail of stories for the US person living abroad, at least for me. I particularly like the canary in a coal mine analogy. A pretty little bird killed by an insidious gas.
    I’ve sent an email to Brian Knowlton (partially via David Jolly) of the NYTimes that reference some postings on Brock (thanks Eric) that provide evidence that the US may be misrepresenting expatriation numbers. Mr Knowlton also contributes to the International Herald Tribune. I’ve been told by Mr Jolly, that Mr Knowlton is working on a story regarding US expatriations. I haven’t heard back from Mr Knowlton, but I believe he has been speaking with another occasional Brocker, but I don’t know whether he will angle the misrepresentation issue in his story. His coverage of our issues has been favourable and we should expect more in the next week.

  8. @all- I’ve reposted some of the comments that I made on the International Herald Tribune (NYT) sight to this Wall Street Journal article and so far I have received four comments in response.
    It seems like a pretty active readership community. More of us may want to post here also.

  9. I like the article because it makes it clear that the USA, not we are on the begging end of the equation. Too many Americans believe that having a US passport gives the holder magical powers abroad, as though it can turn every foreign street into gold irregardless of the person holding it. My personal experience is that, if that was ever true in Germany in the last 30 years, it certainly isn’t now. The Germans could care less. This archaic thinking might even give them a reason to abuse an US passport holder more 😦

  10. @Badger, I’ve posted on that article, thanks! 🙂 Here I requote…admit, I’m mainly having a rant but felt it was good to get my legitimate complaints on there about my own personal experience.

    ”I have spent all my adult life in the UK, married to a British citizen and now have dual citizenship. I was only a student when I first came here so hadn’t understood about all the filing and reporting requirements. I went native and invested into local mutual funds like a Brit. Last year, I learned about FBAR and how the the tax treaty still allowed for double taxation for US persons. I wound up having to pay a five figure sum in phantom capital gains taxes on holdings in my mutual funds due to obscure US tax rules. I felt particularly screwed because these were held in tax free accounts and had assumed that I could invest like my fellow Brits and hadn’t realized about this double standard.

    But going forward, it’s the ongoing costs of compliance that will really wear me down. My tax situation is simple locally and I can e-file my UK tax returns without having to rely on a professional; but I will have to budget at least $2000 if not more each year for a specialized US accountant. I may still suffer some double taxation as well due to difference in how passive income and future pension income will be taxed.

    This is onerous, especially when I am not seeking any US government services. I have had to move all my investments into a US-compliant account which has higher charges and thus lower income. I have to rely on my accountant because I’m so frightened of potential penalties for possibly filling the complicated tax forms incorrectly. Of course, it’s in her interest for things to stay the same, as she earns a living from people like me who hadn’t understood the rules. There’s a whole industry being created around all this but it’s not serving our best interests longterm.”

  11. A Canadian passport while traveling abroad will get you much better treatment than a US one … and this is before FATCA. Imagine how much better it will be now.

    I have a relative who has both passports and purposely uses her Canadian one when traveling overseas. She lives in the US.

  12. Besides leaving a comment on the WSJ story, you can also email the author thanking him. I did.

    william.mcgurn@wsj.com

    William

    Right on point. Thanks for highlighting this story at the WSJ… What is Citizenship worth!

    Tax complexity, FATCA and misguided IRS compliance initiatives (so called voluntary disclosure programs) chasing Americans away…

    There was an interview on the IBC network this weekend about one of the Canadians that have renounced their citizenship. It got attention as there was a case of mistaken identity between two Peter Dunns. One of them is Pete-the-Planner who has a radio financial talk show who was mistakenly thought to be renouncing his citizenship as Reuters reported here…

    You might be interested..

    Here is is..

    The two Peter Dunns
    http://isaacbrocksociety.com/2012/04/22/the-peter-dunn-x2-interview-uploaded/

  13. “I hate seeing that “1,800″ number. I’m with Zuccero and I think that figure is complete BS because there are lotsa people on here that say they were never on any list.”

    I wonder if the state department is not passing all the names on to the IRS.

  14. So True North…. for those on the WSJ comments that don’t think it is significant, or think it is no BIG loss, why don’t you insert an alternate view? I agree, it is probably understated, but ultimately the number is less important than the trend. For the whatever the number reported, the numbers that are now thinking about is is many many times that number, I would think. It is something that would not have even crossed my mind 3 years ago.

  15. @North, I think the Department of State is BLATANTLY withholding the names, or not passing them. Based on this site alone, 1,800 is too few people. If it WERE only this number, why would you have a waiting list in some places? If they said 5,000 or 10,000, it would hurt their image. IMHO, even 5-10 renouncing should prompt themselves to start questioning their practices. Alas, the US is the US, and they still think they are the only country in the world that matters.

    @Justme – so true. I feel like great progress has been made these past few weeks. It’s encouraging, but the underlying queston, “Is US Citizenship REALLY worth it?” keep coming to the forefront, at least in my line of thinking.

  16. I think it is odd that many mainlanders seem to picture people leaving the US just for tax purposes. They don’t seem to understand that many have already gone, many years earlier. Maybe I am not getting something?

    I like the article but think it may not clarify the difference between tax vs penalties for FBAR.

    I am not yet comfortable using my own name so am not going to comment on wsj.

  17. Interesting article, I’d have to agree that the tax code needs to be radically simplified, and if we’re going to insist on citizens keeping the IRS abreast of what they earn/own we should at least make it easy to report, like a website with online forms or something that does exchange rates automatically. The Government can spend $18 million on recovery.gov but the IRS website is like a maze.

  18. They wondered where I went? Haha, ohh I’m popular, lol

    No didn’t scare me away haha, just busy times and went on vacation. I didn’t see the interview I’ll check it out now.

  19. @WhoaIt’sSteve

    A Lot has happened on the news front while you were on vacation. You might want to review some of the post while you were out. Glad to have you commenting here. Contrarian views are welcome, and we won’t flame you or call you names…not even Whiner! LOL 🙂 It is good to be challenged. Makes me refine my thought processes and see things from different angles.

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