US On-Track for Another Record Year of Expatriation
The latest US government data shows a record number of Americans renounced their citizenship in the first quarter of 2015. A total 1,337 Americans gave up their passports during that time. That’s almost 40% of the 3,415 in the entirety of 2014. That 2014 figure was an all-time record, following a record 2013 with 2,999 expatriates.
It’s no mystery why Americans living abroad are choosing to sacrifice their citizenship. United States tax laws are extremely onerous. The US is one of the few countries that forces its citizens to pay taxes on income earned abroad, no matter where the individual permanently lives. On top of that, the tax paperwork is extremely complex.
Part of that complexity is due to recently enacted regulations that supposedly challenge tax evasion. But as CNN Money puts it, the rules of the Foreign Account Tax Compliance Act (FATCA) are bewildering:
But the [FATCA] campaign is making life difficult for the 7.6 million Americans living abroad. As financial institutions rush to understand FATCA, some banks have even kicked out American citizens. If a bank mistakenly fails to report accounts held by Americans outside the U.S. — even checking and savings accounts — they can face steep penalties.”
Peter Schiff’s March Gold Videocast addressed this very issue. Watch it now:
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