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NEW JERSEY, DEC 17 - More than 500 Americans living
abroad have given up their citizenship, after Congress
sharply raised taxes this year for American citizens and
aliens working overseas.
President Bush signed into law a bill that sharply raises
tax rates for Americans abroad with incomes of more than
$82,400 a year. The legislation also increases taxes on
employer-provided benefits like housing allowances.
And, according to the New York Times, some international tax
lawyers say they detect rising demand from citizens to
renounce ties with the United States - for tax reasons.
At the American Embassy in Paris, applications to renounce
citizenship are on the rise, said an official to the
newspaper who spoke on condition of anonymity
The United States is the only developed country that taxes
it citizens while they live overseas. Americans abroad are
also taxed in the countries where they live, unless there
exists a tax treaty avoiding double taxations.
Historically, small numbers of Americans have turned in
their passports every year for political and economic
reasons, with the numbers reaching a high of about 2,000
during the Vietnam War in the early 1970s.
But so far this year, the Internal Revenue Service has
tallied 509 Americans who have given up their citizenship,
said Anthony Burke, an I.R.S. spokesman in Washington. He
said complete figures were still being calculated, reported
NYT today.
For some expatriates, motivations for renunciation are mixed
and complex, involving social concerns, political
displeasure with the American government and other reasons.
But it is clear that taxation plays a large role for many,
even though few are willing to admit that publicly 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
continue filing tax returns for a decade and forbidding
Americans who renounced their passports for tax reasons from
visiting the United States. |
