Why Are So Many People Renouncing United States Citizenship?

241px-United_States_penny,_obverse,_2002There’s been a massive amount of fretting over the ethics of Facebook co-founder Eduardo Saverin’s renunciation of his U.S. citizenship (which the Brazilian native gained roughly 15 years ago).

Various scandalized headlines have mentioned that he’s just one of 1,800 other Americans to give up citizenship last year, up from 235 in 2008, while others have speculated that it’s a cynical move to avoid taxes resulting from a massive capital gain when Facebook shares become publicly traded. Saverin has been savaged in the media and on the social web, but in fact it turns out that this cannot be a tax-saving move. Any ideas as to why Saverin and the other ex-Americans gave up the benefits of Uncle Sam’s protections?

Tom Worstall explains why Saverin will actually owe more taxes in Forbes:

Eduardo Saverin, one of the founders and major shareholders in Facebook, has renounced his US citizenship just before the company’s IPO. However, contrary to many media reports this is not going to reduce his current tax bill: far from it it will increase his current tax bill. It will obviously reduce his future bills, but he has to pay tax as if he liquidates his entire portfolio on the day of his renunciation.

Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.

The specific rules are laid out here. None of the exemptions will apply to Saverin…

[continues in Forbes]

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37 Responses to Why Are So Many People Renouncing United States Citizenship?

  1. JohnFrancisBittrich May 12, 2012 at 2:40 pm #

    Shit, why aren’t MORE people leaving America? If I had dual citizenship I would have left a long time ago…

  2. sunre May 12, 2012 at 2:51 pm #

    There is now a 450$ fee for revoking citizenship, for the first time in history, Americans are not free to leave. It’s not just the wealthy who are leaving. A lot of people are leaving for the lack of Individual Rights, and the debt slavery that the wealthy and their govt. in Washington DC are creating to keep themselves in power. 

    • Robert S May 12, 2012 at 3:19 pm #

      Wow, that’s just amazing.  We have become what we used to fight against.   

      • Anti_Secret_Squirrel May 13, 2012 at 2:09 pm #

         We have become what we really used to hate! What the constitution was talking about!

      • sunre May 15, 2012 at 8:23 am #

        yeah man… when i was little, and you too.. they used to tell us all about the Soviet Union and hoe a small number of elites controlled everyone.. and we trusted the people who used the corporations to get a hold of government and they did the same thing.

        • SPET67 May 17, 2012 at 12:52 pm #

          Right on all counts.   

    • BuzzCoastin May 13, 2012 at 11:10 am #

      about a year ago, while adding pages to my US passport in China
      I noticed that there was a $3500 fee to renounce US citizenship
      now there is info about doing so
      but the fee is not published
      http://travel.state.gov/law/citizenship/citizenship_776.html

      unless the renunciate is picking up a British or EU passport in exchange
      they aren’t gonna get the privileges that game riggers passport provides
      and the benefits of the Big Blue Passport are considerable when traveling the world

      (Michelle Bachman just became a Swiss Citizen, is that legal?)

  3. Josh Robinson May 12, 2012 at 3:20 pm #

    Im learning mandarin…. peace…

    • MoralDrift May 12, 2012 at 8:26 pm #

      good luck with that man, China has its high points but its low points reach just as low as America’s albeit in mostly different ways. I hope you come check it out, its good for you nonetheless

      • Monkey See Monkey Do May 13, 2012 at 4:08 pm #

        China’s low points go lower than America’s. Internally at least.

  4. D351 May 12, 2012 at 3:24 pm #

    Someone needs to post an article on how one goes about renouncing citizenship who doesn’t have dual citizenship.

    • Haystack May 12, 2012 at 5:07 pm #

      It doesn’t really get you anything. You still have to pay taxes, obey laws, etc.; you just lose the legal protections, voting privileges, and such. Really, it’s the last thing anyone should do right now, since US citizenship is about the only thing that makes it the slightest bit difficult for them to throw you in a gulag. 

  5. Scruffy May 12, 2012 at 4:32 pm #

    Creepy uncle Sam.

  6. Majestic May 12, 2012 at 5:17 pm #

    There’s an interesting post at PandoDaily entitled “What Eduardo Saverin Owes America (Hint: Nearly Everything)”. Opening lines:

    When Eduardo Saverin was 13, his family discovered that his name had turned up on a list of victims to be kidnapped by Brazilian gangs. Saverin’s father was a wealthy businessman in São Paulo, and it was inevitable that he’d attract this kind of unwanted attention. Now the family had to make a permanent decision. They hastily arranged a move out of the country. And of all the places in the world they could move to, the Saverin family saw only one option. They took their talents to Miami.Would it be too much to say that America saved Eduardo Saverin? … http://pandodaily.com/2012/05/12/what-eduardo-saverin-owes-america-hint-nearly-everything/

  7. Dirk May 12, 2012 at 5:22 pm #

    If I had the opportunity, I would definitely renounce my citizenship, though not quite yet. This country is definitely at a crossroads. We are pretty far down the path to a full blown, fascist police state. That can all change, but I don’t think it will. Why? Well, most Americans are too stupid and wrapped up in pointless things like materialism and reality shows. I have been to 15 countries and lived and worked in two of them long term. I find I have a lot more in common with foreigners than your typical Nascar, NFL, etc sports freaks, Walmart shopping, Dancing with the Morons watching, Kardashian loving, official 9/11 story believing, morbidly obese, tattooed American. I go out and about and see these blobs of human flesh who seem like they are in a total trance, completely unaware of how badly they are being corn holed on every level. You can lead a fat, brainwashed American to water but can’t make them drink it. Maybe I should lead them to a cheeseburger.

    • Maggie May 12, 2012 at 10:46 pm #

      Don’t think that the rest of the world is free of materialism and reality shows. I work in retail that caters to international customers and they are as materialistic, obnoxious, abusive, obese, cheap as their american counterparts.

    • Anti_Secret_Squirrel May 13, 2012 at 2:08 pm #

       Yes, I do agree! Idiocracy here I come!

    • Georges May 14, 2012 at 12:57 pm #

      I travel all the time and you explained exactly how I feel. 

      In America, everything said on TV is the truth and any opposing theory or evidence is a conspiracy. 

  8. Redacted May 12, 2012 at 6:04 pm #

    If I renounced my citizenship would I be an illegal immigrant?

  9. Kurt Webb May 12, 2012 at 6:16 pm #

    We might have an emmigration problem.

  10. smooth_operator May 12, 2012 at 7:58 pm #

    Even the illegal immigrant traffic-flow from Mexico has dropped considerably. That’s when you know shit is bad.

    • Victor R. Franca May 13, 2012 at 8:10 am #

      I’m staying a Permanent legal resident for “legal” reasons for now, but I do not want a US citizenship. To me there is something Spiritual or Occult behind the ceremony that I can’t quite put my finger on. But its there, standing under a sacred geometry dome in a political building, reciting some magickal incantations disguised as patriotic jargon, no thanks. I read my fare share of occult lore to know what it looks like. I’ll pay my taxes and keep things simple but I’ll pass on the citizenship. I do like the USA tho, the geography  of the land, most of the culture, most of the people. I have been here since I was 8, but my community is full of Brazilians and other immigrants so it was not really heart land USA but you go to the suburbs and you find the white picket fences. The US government and its corporations and military are very very sinister when there is no need to be sinister, and that’s what scares me.  People being sinister when peace and prosperity are right under their noses. Analogous to a wealthy serial killer, that kills for fun. There is certainly  a hidden agenda to collapse the country and make it rise out of its ashes like the phoenix as a total police/spartan state.   I was born in Brazil and I approve this message :)

      • Anti_Secret_Squirrel May 13, 2012 at 2:12 pm #

         Uh one word for yah, THE REPUBLIC OF NORTH AMERICA!

      • Robert S May 14, 2012 at 1:24 am #

        So, I gather you believe that the citizenship ceremony is the casting of some sort of spell, correct?  

        I’m no expert on the occult, so I can’t comment on that. But, I wonder, what do you think is the purpose of this spell?  I mean, they must be trying to accomplish something, correct?  

        • Calypso_1 May 14, 2012 at 2:50 am #

          In Georges Dumezil’s mythographic analysis of Indo-European sovereignty structures one pole of state apparatus is described as the ‘magician-king’, who binds through spells and making of oaths. 
          One attribute given to this mechanism of state is binding into voluntary servitude.  Seen through these concepts citizenship oaths/ceremonies, whether or not they might evoke any degree of occult force, find their origin in very ancient societal structures that do have relations to the idea of magical control of others.

          • SPET67 May 14, 2012 at 4:47 pm #

            thanks, that’s very interesting & pretty deep.  

  11. Jbar May 12, 2012 at 9:34 pm #

    I’m pretty sure I’ll end up an expatriate. I wouldn’t renounce my citizenship unless forced to, but I have no love for the U.S.

  12. Okarin May 12, 2012 at 10:23 pm #

    move to canada, there’s nothing but raccoons and beavers

    • Jbar May 12, 2012 at 11:33 pm #

      I like beaver…

  13. kcnickerson May 13, 2012 at 2:11 am #

    Thanks Eduardo Severin for giving us a classic demonstration of, the first, of Mahatma Gandhi’s “Seven Deadly Sins” – #1.  Wealth without work.

    • Aungsan May 13, 2012 at 4:34 am #

      I thought it was the financial mafia of Wall Street the ones doing that, unless you count ponzi schemes and bailouts as work. I also guess that fighting a brutal colonizer cannot be counted as a “real” profession, I would like to get a masters on fighting brutal oppression, not a real course, damn it.

      • Calypso_1 May 14, 2012 at 1:23 pm #

        In general I suggest coursework in forensic accounting. 
        Further fields of study available upon evaluation of CV. 

  14. Anti_Secret_Squirrel May 13, 2012 at 2:07 pm #

    I will be doing this soon.  I want to have the internet and computers but I want to live somewhere where I don’t have to have the government telling me what is right and wrong all the time.  I want to live somewhere where I do not have to have technology or a dependence on it for food, electricity, and entertainment.  I don’t want to live somewhere were martial law is a constant threat to our freedom and where terrorism is used to make you confused about who the real enemy is. I want to live somewhere where I don’t have to have a ‘constant’ boogieman lurking in the shadows of a shadow government ruled by the rich elite.  Freedom is total liberation of the mind and soul. I want to live on a farm somewhere off the beaten path. It is still possible!

    • Mcmenaminkyle118 July 1, 2012 at 1:37 pm #

      If I renounce my citizenship, am I able to drive without a license because I won’t get one?

  15. Anti_Secret_Squirrel May 13, 2012 at 2:08 pm #

     Not!

  16. Sweet 'n' Tender May 15, 2012 at 10:30 am #

    America stopped being the Country we know and loved a long, long time ago. A free Country? Not even close. In fact, we here in the states are much more open to federal and State government intrusion than most other Countries. We buy a house  and apiece of land and then the government tells us what we can and can NOT do in it, what we can do with it. In some extremes what color you can paint it. They force us to wear seat belts and helmets, which is a good idea but should be our decision, they tell us how and when to school our children… there are even laws on how to handle an intruder on YOUR property… The taxes we pay on our property certainly are not free, planting certain trees is not aloud… you can get high on man made alcohol, yet can’t  grow a weed that is free for all… You can’t use any mind altering substances in your own home or face jail time. The list is staggering to the things you can’t do as an adult, yet they love to call this Country free. It’s a crime, they have turned this Country into everything that the Founding Fathers were running away from in the first place…  and so much more. If these  people have the ability to get out of jail we call America and go somewhere truly free, God bless them.

  17. SPET67 May 17, 2012 at 1:06 pm #

    I’m not making any political statements here.  I’m not interested in discussing who’s to blame.  The people who started this whole mess are long dead.  

    If you think we’re in a recovery, well, that’s unlikely.  It’s much more likely that things are going to get much worse before they get better.  

    There are some who compare the rich leaving America to rats abandoning ship.  But, from their point of view, they know which way the winds blowing.  So, they’re getting themselves and their loved ones to higher ground.  

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