Americans are giving up US citizenship — but why?

Expatriation figures hit a six-year high as politics, taxes and an 80% fee cut all enter the picture

More Americans appear to be cutting their formal ties with the United States, with the latest expatriation figures reaching their highest level in six years.

And while Donald Trump and his political agenda have been blamed by some Americans who have chosen to leave, the reasons appear to be considerably more complicated.

The numbers are rising

A total of 5,790 names appeared on the US government's expatriation list over the past four quarters, according to an analysis of Federal Register data by Greenback Expat Tax Services.

But there is an important catch.

The figure does not mean that 5,790 Americans simply walked into a consulate and renounced their citizenship.

The government list also includes certain long-term residents who have lost their US status, and records when the Treasury Department receives information about a change rather than necessarily when the person actually expatriated.

Even so, the increase is striking.

Between April and June alone, 1,781 names appeared on the list — 68.5% higher than the same quarter last year.

The first-half total reached 3,243, an increase of 38.5% year on year.

Trump gets some of the blame

For some Americans living abroad, politics is clearly part of the story.

People who have previously renounced US citizenship have cited opposition to Trump and dissatisfaction with the country's political direction as factors in their decisions.

But it would be misleading to suggest that Trump is responsible for the entire increase.

Americans living overseas have faced another issue for decades: US tax rules follow them around the world.

Unlike most countries, the United States generally taxes its citizens on worldwide income even when they live permanently abroad.

Foreign tax credits, exclusions and treaties can reduce or eliminate some of the resulting liability, but the system can still create a substantial administrative burden.

The tax problem

The Foreign Account Tax Compliance Act, known as FATCA, has added another layer of complexity.

Foreign financial institutions can be required to report information about accounts held by US taxpayers, making some overseas banking arrangements considerably more complicated for Americans.

For someone who has lived abroad for decades and has little practical connection with the United States, continuing to comply with American tax and reporting requirements can become an increasingly unwelcome burden.

Then came an enormous fee cut

There is another rather important development that could help explain the latest surge.

In April, the State Department slashed the fee for renouncing US citizenship from $2,350 to just $450.

That's an extraordinary 80% reduction.

And the timing is interesting.

The increase in expatriation figures accelerated around the same period the new fee came into effect.

That does not prove that the cheaper fee caused the increase — but it has made the decision dramatically less expensive for anyone who was already considering it.

It isn't an easy escape

Giving up American citizenship is not something that can simply be done with a form and a postage stamp.

Applicants generally have to appear before a US diplomatic or consular officer, complete the required paperwork and formally take an oath of renunciation.

There can also be significant tax consequences.

Certain people classified as “covered expatriates” may face special expatriation tax rules depending on their wealth, tax history and compliance with previous US tax obligations.

And there is an even more fundamental issue.

Someone who gives up American citizenship without already holding another nationality could potentially become stateless.

So why are they leaving?

The available data do not establish one single reason for the increase.

For some, Trump and American politics may be the final straw.

For others, it may be the continuing burden of US taxation and financial reporting while living abroad.

And for some people who had already been considering leaving, the decision suddenly became much cheaper when the renunciation fee fell from $2,350 to $450.

Whatever the combination of reasons, the numbers show that more Americans are now formally cutting their ties with the United States.

And with the price of doing so having just fallen by 80%, it will be interesting to see whether the trend continues.

SOURCE

It's a personal decision.

First you need a decent new oassport.

Personally I would want to have two decent new passports before I gave up the US as a backup.

The US taxation and reporting thing is a major PITA.

Politically I have more or less given up on the US as being a real democracy and respectable international player for my lifetime so yes because of the damage by Trump.

My government now loves Russia and hates Canada.

That is not America to me.

Edited 14 hours ago14 hr by Jingthing

I think it should be free and promoted.

Good riddance

1 minute ago, Yellowtail said:

I think it should be free and promoted.

Good riddance

Yeah that would be the white Christian nationalist maga fascist POV.

1 minute ago, Jingthing said:

Yeah that would be the white Christian nationalist maga fascist POV.

And would the Marxist anti-American totalitarian pinko POV to stop people from leaving.

If they do not like it in the United States, why would you want to stop them from leaving? That's what your hero Gavin Newsom's trying to do in California, yes? Sounds pretty fascist to me.

1 minute ago, Yellowtail said:

And would the Marxist anti-American totalitarian pinko POV to stop people from leaving.

If they do not like it in the United States, why would you want to stop them from leaving? That's what your hero Gavin Newsom's trying to do in California, yes? Sounds pretty fascist to me.

Straw man garbage.

I'm in favor of making it easier for Americans to cancel their citizehship.

It's quite hard now.

I can't though as I only have the US passport.

Just now, Jingthing said:

Straw man garbage.

I'm in favor of making it easier for Americans to cancel their citizehship.

It's quite hard now.

I can't though as I only have the US passport.

You are the one spewing strawman garbage, not me.

Plenty of country where it is reasonable easy to get citizenship.

1 minute ago, Yellowtail said:

You are the one spewing strawman garbage, not me.

Plenty of country where it is reasonable easy to get citizenship.

That's debatable.

But I live in Thailand so not here.

Most Americans ...

Might want to look up 'most' in a dictionary. Most is not ...

... 0.00165429% of the population, about 350M ...

Of the 5790 people listed, many weren't even born in the USA 🙄

Only those that can afford to, means a minute amount. Would think, to avoid any more future tax burden to a country they decided to leave, in the first place.

For those 'headline only' readers ...

... "he list covers US citizens who have lost their citizenship as well as qualifying long-term residents whose US residency has ended under the relevant expatriation rules. It also reflects when the Treasury Department receives information about a change in status, rather than necessarily when the individual expatriated." ...

Edited 12 hours ago12 hr by KhunLA

Aside from their own tax burden, those that marry, their foreign spouses income, amount & source of, becomes an issue, that many wish to avoid.

So few renounce, as you need to be a citizen of another country, and I'd think, not such an easy task,

2 hours ago, Yellowtail said:

I think it should be free and promoted.

Good riddance

5,000 misfits out of a population of 350 million.

3 minutes ago, Yagoda said:

5,000 misfits out of a population of 350 million.

And they were probably more harmful than the illegals that won't self deport themselves. I hope this article is true and that they continue to leave to greener pastures aka socialist nations

3 hours ago, Jingthing said:

Yeah that would be the white Christian nationalist maga fascist POV.

What's the Muslim nationalist view of all this?

You can live abroad as an expatriate without denouncing your citizenship. Rather silly to burn that bridge even if you have a second passport.

8 minutes ago, connda said:

You can live abroad as an expatriate without denouncing your citizenship. Rather silly to burn that bridge even if you have a second passport.

Many countess don't allow dual citizenship. Now you know.

59 minutes ago, TedG said:

What's the Muslim nationalist view of all this?

Not a thing in the US. Too small a group.

4 minutes ago, Jingthing said:

Not a thing in the US. Too small a group.

Bigger every day, and they are getting elected.

A number of bickering /inflammatory remarks removed,

8 hours ago, Jingthing said:

That's debatable.

But I live in Thailand so not here.

If you applied & qualified, Thai citizenship awaits.

As most countries do have a path to citizenship. Or so I read, and actually surprised me, as I also ignorantly thought the opposite.

1 minute ago, KhunLA said:

If you applied & qualified, Thai citizenship awaits.

As most countries do have a path to citizenship. Or so I read, and actually surprised me, as I also ignorantly thought the opposite.

As I moved to Thailand on retirement visa, I have exactly ZERO chance of becoming a citizen of Thailand.

I'm very aware of global new passport options. I can't think of even one I would call easy. Some places sell them. Never cheaply.

OK, for me there is one exception. Israel. But I don't want that and for an American that's like out of the frying pan into the fire.

Edited 5 hours ago5 hr by Jingthing

2 minutes ago, Jingthing said:

As I moved to Thailand on retirement visa, I have exactly ZERO chance of becoming a citizen of Thailand.

I'm very aware of global new passport options. I can't think of even one I would call easy. Some places sell them. Never cheaply.

Buying is easy if you have the dough.

Just now, Yellowtail said:

Buying is easy if you have the dough.

Agreed.

Most people in the world don't have that kind of money to spend on a passport so for most people not even possible. So not easy at all.

If I really wanted a new passport, I know of some countries where it would be possible usually after about five years residence.

But I don't want a new passport that badly.

Some Americans do. Again a personal choice.

Edited 5 hours ago5 hr by Jingthing

7 hours ago, KhunLA said:

Aside from their own tax burden, those that marry, their foreign spouses income, amount & source of, becomes an issue, that many wish to avoid.

So few renounce, as you need to be a citizen of another country, and I'd think, not such an easy task,

There are ex-Americans living stateless lives. Harmon Wilford was a whistleblower to expose alleged corruption during the resolution of the 1980s and 1990s savings and loan crisis. He sought asylum in New Zealand around about 2001. In 2005 he renounced is US citizenship, rendering himself stateless. He started a process to gain NZ citizenship, but has not been granted it.He's been on overstay since 2004. NZ started a process to deport him in 2011, but found that the US refused to issue travel documents, which is slightly ironic in the current climate (one of the impediments to deporting illegal immigrants is that the country where they claim they are from doesn't want them back. And guess what sovereignty means.....)..

In a strange case, Thomas Jolley was a Vietnam War protestor. He fled to Canada, and renounced his citizenship, but didn't become a Canadian citizen. Some time later, he re-entered the US, and was found working in Florida.. The American government wanted him deported, and a complex court case found that he was deportable. But to be deported, a third country had to accept him. Canada didn't want him. He died in his 70s, as a deportable alien in the country of his birth. The reason, predictably, why this state of affairs exists, is because of American exceptionalism; the US refuses to ratify the 1954 Convention relating to the Status of Stateless Persons and the 1961 Convention on the Reduction of Statelessness.