‘Why I’m Giving Up My Passport’
9th December 2014
Some 3,000 Americans gave up their citizenship last year, a tiny number that’s nevertheless been soaring. Yes, a few expatriates may be trying to avoid future taxes, as Senator Charles E. Schumer accused the Facebook co-founder Eduardo Saverin of doing two years ago, when Mr. Saverin, who lives in Singapore, surrendered his passport ahead of the company’s initial public offering.
But most, like me, are not tycoons. We’re responding to the burden and cost of onerous financial reporting and tax filing requirements that are neither fair nor just. (Living and working in London, I pay higher taxes, to Britain, than I would in New York.)
Some 7.6 million Americans live abroad — expats would be the 13th most populous state, if we were a state. Many are overseas temporarily, for work or study. But many others marry foreigners, start companies or have long-term overseas assignments. We are just like ordinary Americans — except that we lack representation.
The United States is an outlier: Its extraterritorial tax laws apply to American citizens and companies no matter where they are. We are the only country (except, arguably, Eritrea) that taxes all of its citizens on worldwide income rather than where the income is earned. Expatriate Americans have to pay taxes once, wherever they live, and then file again in the United States.