Record number of Americans renouncing U.S. citizenship for tax reasons
This growing expatriation trend has nothing to do with offshore tax evasion that the U.S. is so keen to have stamped out because it actually reflects legitimate tax planning.
The problem is the U.S. is one of only two countries, the other is Eritrea, to tax their citizens on their worldwide income, regardless of where they live or work. Accordingly, dumping your passport can save you a lot of money if you are a U.S. citizen with financial or business interests abroad.
Other expatriation stimuli include exorbitant American inheritance taxes and new U.S. Treasury reporting requirements that put off many small and medium-sized foreign banks from dealing with American customers.
Many of those who dump their passports already have dual citizenship in countries like Switzerland and Canada. ■