“The depth of an individual’s patriotism is inversely proportional to his/her wealth.”
Back in 2010 Helena Bachmann wrote a fascinating article in Time Magazine about Americans who feel guilty when considering giving up their U.S. citizenship. Nevertheless, many return their passports despite any misgivings. 502 of these expatriates turned their backs on the country of their birth in the fourth quarter of 2009 – that’s twice as many as in the whole of 2008. And there are many more queuing up at US embassies around the world. In the second quarter of 2013, that’s right in just three months, no less than 1131 US citizens jumped ship.
No guesses as to why? The IRS! Expats are sick and tired of having to pay taxes on income and wealth earned outside of the US. And it’s not just about the money. The sheer complexity of the regulations means they have to spend huge amounts of time filling in labyrinthine forms – and time is money. Furthermore, it’s so easy to make mistakes, and then they face possible fines, or at the very least yet more time is wasted sorting out problems.
It’s not just a simple matter of handing over the paperwork to an accountant – they too are becoming wary of involvement because of the implications of even the smallest error on their business. Those who choose to represent expatriates can be expected to charge ‘an arm and a leg’. The same is true for non-US banks – American clients are more trouble than they’re worth, for they bring with them a raft of paperwork, and horrendous implied liabilities.
As the date for filing tax returns approaches an aura of hysteria blankets the globe. The more money the expat has/earns, the bigger his headache. Some Golden Geese will decide that the sheer scale of the time and money equation has become ludicrous, as the cost of their commitment to the US stands out clearly in profile. They have reached a tipping point. Angell’s Law of Patriotism comes in to play. Many will choose to fly away. The higher the taxes, the more complex and intrusive the regulations, the more will join the exodus.
Some of the escapees interviewed said that the only thing that initially held them back was the reaction of their families; they were made to feel like traitors. But they gave up US citizenship anyway. And what’s so virtuous of unquestioned patriotism anyway? I’m with Dr. Samuel Johnson: “Patriotism is the last resort of the scoundrel”. Despite the snide and sanctimonious rebukes from the self-righteous scoundrels in their families, you can bet those very same relatives wouldn’t have the principles to turn down any largesse from the newly-untaxed and much richer ex-patriot expatriates.
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