Weekend Economists: "So much to do, so little done, such things to be." April 20-22, 2012

[Demeter]

45. Taxes Prompt More Americans to Renounce Citizenship

http://www.cnbc.com/id/47064295

A year ago, in Action Comics, Superman declared plans to renounce his U.S. citizenship.

"'Truth, justice, and the American way' — it's not enough anymore," the comic book superhero said, after both the Iranian and American governments criticized him for joining a peaceful anti-government protest in Tehran.

Last year, almost 1,800 people followed Superman's lead, renouncing their U.S. citizenship or handing in their Green Cards. That's a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It's also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.

But not everyone's motivations are as lofty as Superman's. Many say they parted ways with America for tax reasons...There's also an "exit tax" for the very rich who choose to leave. During the last 25 years, a number of millionaires and billionaires have renounced their citizenship. Among them: Ted Arison, the late founder of Carnival Cruises (Costa Concordia, anyone?) , and Michael Dingman, a former Ford Motor director. But those of more modest means renounce, too. They say leaving America is about more than money; it's about privacy and red tape. On April 7, 2011, Peter Dunn raised his right hand before a U.S. consular officer in Toronto and swore that he understood the consequences of giving up his U.S. citizenship. Dunn, a dual U.S.-Canadian citizen who has lived outside the United States since 1986, says he renounced because he felt American citizenship had become more of a liability than a privilege. As an American, Dunn had to file tax returns and report all of his bank accounts - even joint accounts and his Canadian retirement fund. If he didn't, he would be breaking U.S. law and could face penalties of up to $100,000 or 50 percent of his undeclared accounts, whichever is larger. Dunn says he was tired of tracking IRS policy changes, and he had no intention of returning to the United States. Renouncing his citizenship, as he puts it, was "a no-brainer." ...Dunn, who blogs about expatriation, takes issue with being characterized as a tax evader. He says the taxes he pays in Canada are higher than what he would pay in the United States, and he says he had always complied with the IRS before renouncing. But, Dunn says, the IRS approach to enforcing compliance is misguided. "It's making life difficult for a lot of people," he says. "It's driving us away."

AND THERE'S SO MUCH MORE...WHICH LEADS TO THE NEXT LOGICAL STEP OF THE GOVERNMENT...