It all goes back to the Civil War.
by
The number of Americans renouncing their citizenship rose
to a new record of 5,411 last year, up 26 percent from 2015, according
to the latest government data.
Why?
It all goes back to the Civil War, and to a tax meant to deter potential draft dodgers from leaving the U.S. Today, the goal is to make sure that all of the income of U.S. citizens, whether they live and work in the U.S. or not, is reported to the Internal Revenue Service.
The rules got trickier in 2010, when, in an effort to
cut down on tax evasion, the Foreign Account Tax Compliance Act
(fabulously, Fatca, for short) was passed into law. It basically said
foreign institutions holding assets for U.S. citizens had to report the
accounts or withhold a 30 percent tax on them if the information wasn't
provided. That led some foreign banks to shy away from opening accounts
for expats.Since Fatca came into being, annual totals for Americans renouncing citizenship have reached their four highest historic levels, as shown in the chart below from Andrew Mitchel LLC and its International Tax Blog.Why?
It all goes back to the Civil War, and to a tax meant to deter potential draft dodgers from leaving the U.S. Today, the goal is to make sure that all of the income of U.S. citizens, whether they live and work in the U.S. or not, is reported to the Internal Revenue Service.
Source: U.S. Treasury Department via Andrew Mitchel LLC
