Land of the flee: why, despite Obama's re-election, Americans are renouncing citizenship in droves

Our writer, an American expat, loves her country too much to say goodbye to it forever. But an increasing number of US citizens are turning way from Uncle Sam. Why?

Share

Not all Americans wrapped themselves in the flag last week, as the world watched our presidential election unfold. Despite shows of hysterical patriotism broadcast on election night, a growing number of citizens have renounced their home country, which they see as having an increasingly anti-expatriate government that’s only interested in collecting cash and giving virtually nothing in return. 

Since President Obama took office in January 2008, nearly 5,000 people have voluntarily surrendered their American passports, according to data made available by The United States Office of the Federal Register. Last year alone, nearly 1,800 US citizens went rogue, compared to about 230 four years ago. Renunciation figures shot up shortly after the UBS scandal of 2008, when the Swiss bank was caught helping thousands of Americans evade taxes, a revelation that led to tighter restrictions on overseas bank accounts. Many in the expat community believe that the US government has gone too far in its monitoring of foreign bank accounts and taxing on assets and worldwide income. And for the defectors, financial freedom has become more important than heritage.

Under US law, Americans are required to pay taxes on worldwide income. Even if they live and earn money outside of the borders of the United States, US citizens must pay taxes on assets and income. The Internal Revenue Service allows for a foreign tax credit to offset the cost of paying taxes in an expatriate’s country of residence. However, the credit only works out favorably if the taxes paid in the resident country are equal to or more than that of the US. But, if the tax bill in the resident country is less than that which would be owed in America, the difference must be paid to the US government.

Resentful

Even more unnerving than paying taxes and receiving virtually no benefits, are invasive reporting edicts, also known as Report of Foreign Bank and Financial Accounts (FBAR), which have turned the term offshore into a dirty word. US citizens must report to the Department of Treasury any foreign financial accounts in which they have an interest or signing authority, if the value of the foreign accounts exceeds $10,000 (£6,000) at any time during the year, according to the IRS. Breaking the rules could result in steep financial penalties or criminal charges.

“There’s this belief that the US is a club that everybody else in the world wants to belong to, and if you’re leaving it, there must be something wrong with you,” said one American-Londoner who asked to remain anonymous because he is still in the process of renouncing his citizenship. “It’s a real pain in the ass to have an American passport nowadays, with the additional requirements of opening a bank account and having a business. I guess there is some bit of me that is resentful that I have to pay taxes in a country that I don’t benefit from the structure that the taxes go to.”

As an American expatriate, I dislike the stress of filing tax returns and financial forms, but I would never renounce my citizenship because I simply love my country too much and am too deeply tied to my Yankee roots. However, living abroad on-and-off for the past seven years has shaped my perspectives on America and the idea of leaving her, and I empathise with my compatriots who feel forced to either pay-up or pack-up. Like most countries in the world, the United States could avoid losing thousands of people by loosening the chokehold on expatriates and allowing us to suspend our tax burden on income earned offshore.

“There isn’t any common sense applied to the law,” said Tristan Brandt, an entrepreneur and dual British and French citizen who renounced his American birthright earlier this year. “You either comply with no upside or you’re in breach of the law. You end up having to take that judgment call. Do you want to be on the wrong side of the law and hope they don’t catch you? The way technology is going, it could be a mine you don’t expect to step on but that blows you up in the future.”

Brandt, 41, who has an American parent, was born in Britain and lived in the United States for about five years after graduating from university. He decided to give up his citizenship after he returned to London as a young adult and started making money and buying property. It wasn’t until he built up some relative wealth that he realised the high cost of maintaining his US citizenship. In the end, he spent about $20,000 (£12,000) to rid himself of it.

Toxic

Aside from the actual duty paid, just keeping compliant demands hours of administrative work filling out forms and thousands of pounds spent each year on professional tax preparers. This hassle factor compounds the anger felt by many long-term expatriates fed-up with the unrequited love from their mother country. And like most parent-child relationships, the situation is complicated—fiscally, administratively and emotionally.

“My father died two years ago, and I didn’t really pursue [the renunciation] until after he died,” said the anonymous American, who has lived abroad for nearly 30 years but grew up in the Southeastern United States and played American football at his university. “I think he would have been disappointed. If I reversed the rolls, I would have felt the same way he did. He grew up and spent his whole life in the real American century at a time when we were truly leading the world.”

A toxic combination of frustration, financial burden and fear of further regulations has created a new anti-American movement among our own people. For those defectors, bitterness has replaced any shred of nostalgia for the United States. If a compromise solution were available, especially for those citizens who intend never to live in the United States, there would be less fleeing and more flag-waving Americans making an impact across the globe.    

“I really remember feeling quite a strong emotion of unhappiness when I was in the consulate having to renounce because I was aware that my affiliation to the US was ending there. I found that to be quite annoying and disappointing,” said Brandt.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

English Teacher

£120 - £140 per day: Randstad Education Group: English as an Additional Langua...

Nursery assistants required in Cambridgeshire

£10000 - £15000 per annum: Randstad Education Cambridge: Nursery assistants re...

History Teacher

£60 - £65 per day: Randstad Education Liverpool: Job opportunities for Seconda...

** Female PE Teacher Urgently Required In Liverpool **

£120 - £140 per day: Randstad Education Liverpool: Job opportunities for Secon...

Day In a Page

Read Next
Photo issued by Flinders University of an artist's impression of a Microbrachius dicki mating scene  

One look at us Scots is enough to show how it was our fishy ancestors who invented sex

Donald MacInnes
Oscar Pistorius is led out of court in Pretoria. Pistorius received a five-year prison sentence for culpable homicide by judge Thokozile Masipais for the killing of his girlfriend Reeva Steenkamp  

Oscar Pistorius sentence: Judge Masipa might have shown mercy, but she has delivered perfect justice

Chris Maume
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album