Wednesday, April 25, 2012
Last year, nearly 1,800 American expatriates renounced their citizenship, according to Treasury Department figures.What gives?
The cheap answer is to blame Barack Obama. After all, during his tenure, the number of Americans renouncing citizenship has taken a sharp upward turn, from an average of 482 per year under George W. Bush to 742 in 2009, to 1,534 in 2010 and to 1,788 in 2011. At the least, his calls for hiking taxes on the wealthy can't be doing anything to discourage this trend.
The other cheap answer is to blame the ever unpopular IRS—instead of the tax code itself. ... [W]hen it comes to the global inefficiencies of our tax code, these 1,800 ex-Americans are canaries in the coal mine.
Our tax code—and especially the onerous reporting requirements that come with it—is turning U.S. citizens into economic lepers. Many foreign banks refuse us as customers; some investment ventures no longer want us as partners; and some business opportunities that would have benefited Americans now benefit others. For successful foreigners, our global tax regime tells them this: Avoid entanglements with America.