The country just got done celebrating its independence this past weekend. With fireworks and all kinds of parties, Americans celebrated to show their appreciation for one of the greatest gifts they have: Freedom. Most Americans are very proud of their citizenship, even if they don’t always like everything the about the laws of the land. One of the topics that is often a sore spot is taxes, especially on the wealthy. With that in mind it’s no surprise that there is another report claiming that more of America’s wealthy are choosing to give up their American citizenship in order to avoid the high cost of taxes in the United States. It sounds like a broken record.
Saying Goodbye to the USA
It’s not that these citizens aren’t proud of their country, but rather they just can’t come to grips with the continued effort by the federal government to take so much of their money, simply because the earn more than others. According to reports, more Americans renounced their citizenship during the first quarter of this year, than during any other recorded quarter. Of course, the total number on record over that time period was only 1,335, which of course represents a mere drop in the bucket compared to the total number of American citizens. However, when compared to all previous years, 2015 appears to be headed for a record for the most total defections in a single year. Therefore the total number cannot be discounted as insignificant.
A Growing Trend
Likewise, the numbers continue to increase each year. The total number of defections has risen consecutively each year since at least 2012 and current numbers would indicate that the total for this year would surpass 5,000 people. Just last year the total number of defections was 3,415. According to several tax lawyers, there are indications that the numbers could continue to grow. Many lawyers say they have dozens of clients who ask about this option on a regular basis. In fact, according to one online survey done by a Hong Kong firm, nearly one-fourth (23 percent) of respondents said that they are “seriously considering” renouncing their citizenship because of taxes.
Losing the Wealthy a Cause for Concern
According to these same lawyers, the increasing number of defections is cause for concern, because most of the people who leave are wealthy. The reason these individuals are leaving is because the IRS requires all American citizens to report their income from anywhere else in the world and pay taxes on it, even if they didn’t earn the money in the U.S. and when they don’t even live in the country. That is a double whammy because these individuals must pay taxes in the countries where they live and earn the money, already. With so many other countries offering lower tax rates, more and more wealthy individuals are saying enough is enough and heading for the borders.
Farewell to Higher Taxes
It appears that as long as the U.S. continues to employ its international tax laws and require such stringent reporting and tax paying that more and more wealthy individuals will just decide to pack up and leave for good. It’s a scenario that could potentially cost the country millions because many defectors are counted among the nation’s wealthiest individuals.