As more foreigners make their way to the U.S. in search for greener pastures, the number of Americans giving up their citizenship for good has steadily increased and risen to a record last year
Financial advisory company deVere Group reported that 3,415 people revoked their U.S. citizenship last year, that is 14 percent higher compared to 2013.
Tax concerns seem to be the main motivation for these citizens. The U.S. recently enacted FATCA or Foreign Account Tax Compliance Act, a tax law that makes it easier for authorities to tinker with personal assets. A recent survey conducted by deVere revealed that nearly four out of five of its clients, most of whom are American expatriates, would consider giving up their passports because of FATCA.
deVere Group founder Nigel Green credited FATCA for this phenomenon. “It can be reasonably assumed that this trend is in direct response to complying with the onerous, expensive and privacy-infringing FATCA, which finally came into effect on July 1 last year.”
FATCA, which came in full swing last year, imposes a mandatory reporting by foreign financial institutions about the financial holdings of their U.S. clients, otherwise a 30 percent withholding tax on a range of payments from the U.S. will be slapped onto them.
Although FATCA was meant to address tax evaders, it had been criticized for invading privacy and had a negative effect on middle-class Americans who live and do business overseas.
The U.S. Department of State’s Bureau of Consular Affairs estimates that there are 7.6 million U.S. citizens living abroad and more than 70 million Americans travel overseas on a yearly basis. Since the fiscal year of 2007, the Department has issued more than 109 million passports and passport cards. It is estimated that over 119 million valid U.S. passports are in circulation, and there are about 38 percent of Americans do have a passport (compared to 14 million back in 1991).
Meanwhile, those looking to try their luck in America continue to trickle in. As of fiscal year 2013, the Department has adjudicated almost 10.7 million non-immigrant visa applications and issued over 9.1 million non-immigrant visas, including a significant number of student and exchange visitor visas. The Department of Commerce estimates that international travelers contribute more than $152 billion to the U.S. economy. On the other hand, OpenDoors points out that international students contributed more than $22.7 billion to the U.S. economy in 2013.