Yald Patrick Grote's Blog

Why the rise in renouncing united states citizenship

The New York Times has a fascinating article about US citizens renouncing their citizenship due to tax reasons. I had no idea the US requires citizens working abroad had to pay taxes to the US and the country they work in.

The article had a couple of great points. Here is one:

For some Americans abroad, motivations for renunciation are mixed and complex, involving social concerns, political displeasure with their government and other reasons. But it is clear that taxation plays a large role for many, even though few are willing to admit that because of penalties enacted a decade ago.

In 1996, Congress tried to address a wave of tax-driven expatriation by the wealthy by requiring former citizens to file tax returns for a decade and forbidding Americans who renounced their passports for tax reasons from visiting the United States.

Wow. Not only does our country force someone to pay taxes when working abroad, but they put in penalties for people renouncing their citizenship. Egads.

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