Saturday, September 07, 2013

The drastic expat solution

In this instalment of Yahoo’s “Who Knew?” video series, they look at the record number of Americans renouncing their US citizenship. Record, yeah, but still a pretty tiny number.

Part of the reason it’s so low may be that the USA makes it difficult. However, the bigger reason may be the implications: Once citizenship is renounced, ex-Americans need travel visas to visit the USA, just as all foreigners do, and they can’t stay very long or work there. Also, apparently the fact that one has renounced their US citizenship pops up on computers at the border when an ex-American enters the US, which could make them subject to “heightened scrutiny”.

The video says the increase is mostly because of draconian new tax laws in which US expats’ overseas assets (including their home) can be taxable under some circumstances, and requiring foreign banks to report the balances of some cash accounts of US citizens, even when the amounts are relatively small. I’ve seen anecdotal reports that some non-US banks are refusing to open accounts for US citizens because the compliance costs are too high.

There are ongoing negotiations about this, as are attempts to find a solution in Congress. But there isn’t much of a political will to treat US expats fairly, so I’m not optimistic that there will be changes any time soon. My impression is that Republicans, controlled, as they are, by their xenophobic teabagger faction, seem to regard expats as being somehow “less American” than people who live within the USA, so, by extension, we “deserve” to be treated badly. I get this mainly from their rhetoric on immigration reform in the USA, as well as their rhetoric about immigrants generally. At the very least, I’ve certainly seen no evidence that they value expat US citizens.

Ultimately, it will take Congressional action to sort this out, but if Republicans win control of Congress and the White House, the resolution could be in the opposite direction: Making things worse for expats, even outlawing dual nationality. On the other hand, if Democrats win, things could get very much better. Maybe.

In the meantime, US citizens living overseas will continue to renounce their US citizenship in order to live their lives in peace. That may be a pretty drastic solution, but some will feel it’s their only choice. I think that’s really sad. Let’s hope a solution is found before that “record number” really does become a big number.

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