Why I gave up my US passport (opens in new tab)

I grew up loving the philosophy and values I learned about America -- Jefferson, Adams, Thoreau, King, Edison, Feynman, ... welcoming Einstein and so many others. Young as the country and its culture is, we've produced some greats.

As I've matured and times have changed it's been impossible to miss other parts of America grade schools don't teach -- increasing division between rich and poor, decreasing social mobility, corporate control of the government, entrenched racism, sexism, jingoism, needless wars based on lies, ... I could go on. Anyone could.

I haven't lost faith in my country -- such vague words could mean so much in this context -- but I don't like how the powerful are influencing the processes that led to it flourishing so long, even taking into account its colossal mistakes (Prohibition?), nor how those without power aren't taking responsibility to gain power like they (we) could. I'm impressed with the love many foreigners have for much of our freedom, which I share.

I tell myself living in Manhattan is like living outside any country. Legally New York City may be part of the United States, but culturally it's its own world.

Still, I find it valuable to look at where you live sometimes with rose-colored glasses because life feels better when you love your home, but regularly to evaluate it warts and all. How else can you change it if you feel you can, or escape before the need becomes desperate, should the need arise?

(Here is where people often ask where it's better or point out places it's worse. I don't argue against asking those questions, but we don't have to jump to comparisons with others, which distracts from evaluating it from what it could be. Or once professed or aspired to be.)

It is hard to fathom the complexities you face when overseas as a US citizen due to the US tax code, which is basically the only code of a major developed country to tax its citizens wherever they may live worldwide, regardless of their source of income.

There is a system of tax exemptions and credits within the code to offset the double taxation this would imply when living in a jurisdiction which imposes its own income taxes, as most countries in fact do. The difficulties arise in reconciling the US tax liabilities with those owed to the foreign country, calculating the applicable credits, etc. In practice this requires expensive tax professionals in most cases - and they get really expensive if you're an entrepreneur with an overseas corporation, which is pretty much a nightmare to deal with on several levels - different accounting standards, controlled foreign corporation tax reporting, paying estimated taxes when having no clue what the result of a complex tax calculation process will be, etc.

Besides income taxes, there are also bank account reporting requirements (TDF 90-22.1 form) which have made many people's lives difficult. The penalties for not reporting any foreign bank account are draconian even if you live overseas and need an account where you live (you will). Even worse, foreign banks are reluctant to deal with US citizens because of the reporting they in turn are required to do on their behalf, resulting in frequent difficulties opening and maintaining bank accounts overseas if you are a US citizen.

Finally, as a US citizen overseas you are still entitled to social security payments from the US government, but get no benefit from your contributions to Medicare, which only covers you within the USA proper. For that matter you also get no benefit from most of the residual income taxes you pay to the USA that you can't offset with tax exemptions/credits. It's not like those taxes will be used for any of the infrastructure etc. you use overseas.

Last year I was a contract worker for a US company while living in Japan. In addition, I had some side income earned, and all this was taxed as a Sole Proprietor in Japan. The paperwork was about 5 pages worth of just filling in boxes with the numbers from my books.

My situation was pretty complicated on the US side, so I enlisted the help of a professional to get everything kosher on my US return. I have never seen such a complex tax return in my life. In the end, it was 40 pages long, and that is not including the FATCA I did seperately. And all that just to show that I owe $0 for US taxes.

However, we are considering moving back to the US, if even for just a year, so I keep my US citizenship for now.

I haven't renounced yet, but it's so very tempting. The arrogance of the US's dual-taxation bullshit is enough of a reason to consider it.

What I'd be more interested in is if there is harassment for doing so. My daughter is an American citizen unfortunately (happenstance of birth), but won't be living in the US for any foreseeable reason. She'll be burdened with tax and reporting issues all her life if she doesn't renounce. But if she does renounce, will they hassle her when visiting family? What about if she does do some temporary work in the US, will they deny visas?

I wonder what is going to happen to all those US citizens living abroad with the new health insurance requirements.. Will they be forced to pay even they can't benefit from the services ?

( Specially if they are already covered by their host country healthcare system. )

If a US-born citizen (as opposed to naturalized US citizen) renounces their citizenship, can they claim it again afterwards? Or is it forever gone?

Unfortunately the US gov could not care less.

I'd be inclined to say "well if you left, then fine", but with the dual taxation and the inability of Congress to pay their bills (it is not just Democrat money, by a long shot)...what exactly are we paying for and why should everyone be responsible for it?

Is there any historical examples of a representative democratic country simplifying its tax code? How was it done?

The United States have been around for centuries, and each elected governments and congresses have their own idea about how the tax code should look like. Probably that's why now we have very complicated system, because it's the aggregation of centuries' worth of ideas.

The logical step is to simplify it, but I don't think it's really possible with the current US political system. Each part of the complexity benefits some group, and every group will influence the lawmakers to keep their benefit/loophole.

I'll be able to apply for Paraguayan citizenship in about a year, and I plan to renounce my US citizenship immediately afterwards.

I'm so much happier here in Paraguay (even with all the cultural differences), instead of the US. I also can't say I feel happy about how things have progressed in the US over the last few years - regarding politics and economics. I really expect that Paraguay is the country where I will build my family and my future.

It used to be free to renounce U.S citizen ship, but I think it's $500 bucks to file for it now because too many people are lining up.

Current citizen, wife with dual citizenship. Long term we will probably end up in her country (an EU nation), we are already looking at strengthening some of those ties.

She had to divest some interests when she took up residence here, if we decide to go back over there (likely in the next 3-5 years), we will look carefully at whether or not staying in vested in the US makes sense. The US feels like it is trying to turn every benefit into something akin to a 401k -- HSA accounts, etc. Which isn't ideal, but they still aren't separating things from the employer based healthcare model...so in a sense many are getting the worst of both worlds.

Healthcare may actually be the motivating issue for us.

Here is a quick youtube issue summarizing the citizenship based taxation issue the USA has. Supposedly it came out of the civil war:

https://www.youtube.com/watch?feature=player_embedded&v=DKFE...

If corporations are people, why do they not need to pay taxes when they go all "ex-pat?"

I'm turning Japanese.

Some of the stuff the people in the article write is just plain stupid. If I could get US citizenship for my newly born daughter (born in Poland) after being in the US total just 5 years, why she couldn't get it done, is beyond me. People who have lived in EU complaining about US burocracy and pointing it as a reason for giving up on an US citizenship are beyond me too. US taxation system is a walk in a park compared with EU. All the people from the article seem to be carefully selected socialists big time who just couldn't wait to give up on the US citizenship no matter what. And for one each of them there are literally thousands foreigners who would rather live in the USA, including Germans, Canadians, etc.