Many of you may have seen this article over Yahoo News. The title is “The risks of renouncing your U.S. passport.”

In summary: there’s been an increase of Americans that live outside of the country, turning in their citizenship, mostly to avoid dealing with US taxes (presumedly they are paying taxes in their country of residence).

Once upon a time, an American could earn just about $100K, (federal) tax free. It’s been cut back to about $80K nowadays. Your local foreign bank account wasn’t really looked at. Then, in the late 90’s, the IRS realized a lot of fat cats were stashing away minor fortunes. The tax rules changed, Swiss accounts were shared with the US, and US revenues increased.

That’s not my focus. As the title goes, what do you get for your money? If you’re living / working overseas, you’re dependent on the local infrastructure. Common logic suggests you pay into that system for the benefits you (potentially) receive. But what, if anything, do you receive for your taxes paid to the US? The right to vote. The use of embassy consulate services if you get into a bind. Anything else? As an expatriate, you’re subject to the laws and rights of the country you reside in (well, maybe not all rights). Presumably, you’re not paying local income tax, a good enough reason not to have full rights. Point is, you pay as you go, and pay as you use.

Whenever there appears to be a problem with (any) governance, follow the money. Having a citizen on a county’s balance sheet increases revenue. Not having to support that citizen with basic services increases profit. From the individual’s view, does it matter which nation / state / club they belong to?

Being a citizen in America carries financial and civic responsibilities similar to any other citizen-country pairing. Seems simple enough for an individual to accept that. So, why does a government encourage formal immigration while penalizing emigration?

Follow the money.

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