Who Renounces Their American Citizenship?
Sunday, Vermont's Independent Senator Bernie Sanders tweeted, bright and early, that "Today, the 400 richest Americans are now worth a record-breaking $1.7 trillion-- more than 5 times what they were worth just 2 decades ago." I guess you can still make the kind of fortune in America that gives you the opportunity to dominate society and call the shots. These people even have their own political party-- the GOP-- and pretty much control what the Democrats do as well. I have some kind of foggy recollection about the Founding Fathers opposing the whole notion of the formation of the kind of great intergenerational wealth that gives birth to one of the worst of all governing systems, the plutocracy. It's why democracies have estate taxes. Even if Republicans don't Conservative Winston Churchill and robber baron Andrew Carnegie were very much in support of holding the development of plutocracy and oligarchy at bay with a strong inheritance or estate tax. From Chris Hayes' Twilight of the Elites:
Across the world 1,781 Americans renounced their citizenship in 2011 compared with just 231 in 2008, when US tax laws changed, although it remains unknown how many are adopting British rather than any other nationality.
Many decide to give up their American citizenship after tiring of the lengthy US tax return process, which requires them to pay tax on their total income regardless of where they live.
“There’s no question that the number of people renouncing their US citizenship is increasing,” said Diane Gelon, a US tax and immigration lawyer based in London.
“I probably get a dozen cases a year now when before 2008 when the tax laws changed it was just three or four.”
...Even if a US citizen earns all their income in Britain they are liable for tax in their home country which can lead to unusual tax situations arising, said Ms Gelon.
For example, US citizens are expected to pay capital gains tax to the US government if they sell a property in Britain which is their main residence, even though a similar tax is not imposed by the British Inland Revenue.
The US rules make concessions for tax paid overseas but there is still a risk that their citizens will be hit with a large tax bill, she added.
“Actually giving up your citizenship is dead easy-- once you have an appointment with a consular official it takes a matter of minutes.
“But getting an appointment in London can take three months and that is largely because of the tax issues,” she said.
“It can be an emotional thing, to give up one’s citizenship. I’ve had clients cancelling their appointments at the embassy on the day they were due to renounce because they just couldn’t go through with it.”
Susan McFadden, another London-based US attorney who specializes in immigration matters, said: “I’ve definitely seen a surge. In the last few years it’s gone up threefold and I see through about two dozen cases a year.
“The US Embassy in London has responded to that demand-- and quite a long queue for renunciation appointments-- by streamlining the process.
“We are told they have trained additional officers to reside over renunciation processes.”
The 2011 census found 177,185 people living in England and Wales were born in the US. All American citizens are required to file a tax return on their world-wide income. The rule applies even if they have not visited the US for decades.
The US Internal Revenue Service is likely to discover tax returns have been missed in a number of different scenarios. For example, it may come to light if a citizen applies to renew a passport, is named as a beneficiary in a will or their foreign-based bank complies with new legislation which requires them to notify the US government about all American customers.
Nearly a century later, in 2004, that same fate befell Yaser Esam Hamdi, a US citizen captured in Afghanistan in 2001. The Bush Administration imprisoned Hamdi in Guantanamo bay as an "an illegal enemy combatant," but made no formal charges for three years. Under pressure from human rights groups, Bush’s officials agreed to deport Hamdi to Saudi Arabia, as long as he renounced his citizenship. When Hamdi refused to give up his passport, the Justice Department revoked it anyway.
And then, in 2007, Rice’s State Department released a list of new “potentially expatriating acts,” including treason.
Negotiators for the European Parliament and EU states said they reached a preliminary deal on a measure that would forbid bonuses that exceed a bankers' fixed salary. Flexible pay could increase to twice fixed salary, but only with explicit shareholder approval.
The initiative, part of a broader law that forces lenders to build up more-robust financial cushions, is designed to reduce incentives for the type of risky behavior widely blamed for contributing to the 2008 financial crisis.
The EU push comes as Swiss voters will indicate on Sunday just how deep their resentment of big executive paychecks runs when they vote on a controversial plan that would give shareholders sweeping authority over executive compensation.
The 24 items contained in the Swiss referendum, dubbed the "rip-off" initiative, would allow shareholders to block salaries, ban so-called golden handshakes and parachutes-- forms of guaranteed parting packages-- and require greater transparency on loans and pensions to executives and directors. The measure includes fines and prison sentences for violations.
The moves in Brussels and in Switzerland, if successful, would represent the most intrusive intervention yet into how banks and corporations compensate employees and executives-- an issue that was for years considered an internal corporate matter.
The EU pay limits would apply to all European banks, including their operations abroad, as well as U.S. and other foreign banks' subsidiaries in the EU, officials representing both member states and the Parliament said. That provision may be reviewed in a few years' time, they added.
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