Last week I had a woman in here
who came in here completely gung-ho about relinquishing her citizenship
and she came in with her young daughter. By the end of it
you know there were tears rolling down her cheeks because
her 10-year-old daughter is an American but who's never lived in the United States.
you know and trying to explain, you know, what that means to be an
American was really quite moving
but she's so emotionally tied to
that being part of her identity, yet for tax reasons it so completely made
sense to her.
Sad that she felt that she had to be in this position to relinquish her citizenship.
If you have a US passport, if you have US citizenship
you're taxed on all your income worldwide regardless of where you live
regardless of your domicile. As if wherever you're living is like the 51st state.
The consensus is that there are
three countries that base tax purely on citizenship:
the United States, Eritrea and North Korea.
This is something we jokingly refer to as the Tax Axis of evil.
FATCA is very complicated legislation.
FATCA is a piece of legislation that was put in place by the US
it's legislation it's actually aimed at banks and financial institutions.
If you want to continue to do business with the US then you
essentially have to name names, you have to name who your American clients are.
So it was a pretty easy decision I think for a lot of financial institutions because
if they wanted to deal
with the US they had to become compliant.
Every bank in the world had to report their American citizens
to the United States, and this created an enormous amount of
headache and cost for banks, and so many European banks decided that they weren't
going to have any American clients.
There are a number of banks now, say in the UK, who are actually writing
to their client base asking if they're an American.
Because the onus is on them, is on the banks and financial institutions
to provide this information and if they don't provide this information
they can be heavily fined.
So it's really a way that the IRS is strong-arming non US institutions into double checking for them
who the Americans are, so they can match those up with tax records they have on file.
And there are seven and a half million Americans living abroad,
it would be the 13th biggest state. That's bigger than Louisiana, Nebraska.
We don't have anybody particularly in Congress who looks after
our interests as Americans abroad.
We don't have anybody in in the senate.
I would love to know how many people in congress speak other languages,
how many have passports and how many actually ever lived abroad because
the way rules are written right now Americans abroad are treated
like second-class citizens in terms of the onerous
legislation that affects them and so
the more burdensome it gets, the more complex it is, the more people
are going to renounce, it's that simple.
Individuals who give up US citizenship or expatriate from the US are reported
in a document that congress produces, it's called
the Federal Register. You can see that the number of expatriates
is at the highest level that it's ever been.
So many people renouncing American citizenship, they're not doing it to avoid taxes
they're paying higher taxes in Sweden, or Britain...
it's more to
get rid of the headache and the fear that they might be
violating one of the hundreds of thousands of pages of the US tax code.
I mean I've had clients where their parents were graduate students,
they were born in the United States
and then they moved back here, never completely fully understood
of course because they didn't grow up in a US household.
They didn't understand what it meant to be an American in terms of tax.
I have a deep appreciation and love for America, I grew up thinking I was American,
but the truth is I've lived almost all my life abroad and if America wants to
make it extremely expensive and difficult for me to be American,
then sadly I'll be British.
I had to pay two thousand three hundred fifty dollars for the pleasure
of renouncing my US citizenship, and it used to be four hundred dollars a year ago.
but I paid it and there are other people renouncing as well
yesterday, and the numbers have gone up and they will continue to go up.
When you get caught between two systems you don't get the benefit of either system,
and that becomes where the problem is for Americans living abroad.
No one renounces, that I know of,
because they don't love America,
or they in any way dislike America, I think the great hope is that somehow congress can
fix this.