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A Journey Into Paradise

Expats Giving Up American Passports

12 September, 2012

The New York Times reported,this week,that a small but increasing number of Americans living abroad are giving up their U.S. citizenship.

Many American expatriates live south of the border in Mexico. More than a million Americans are already estimated to live full or part-time in Mexican towns and resorts and experts say the number could grow to as many as 5 million,by 2025.

The Big Apple daily said that tax and banking problems were driving overseas Americans to renounce their U.S. passports.

Jackie Bugnion,director of American Citizens Abroad,told the paper,"What we have seen is a substantial change in mentality among the overseas community in the past two years. Before,no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now,it is an openly discussed issue."

According to U.S. government figures,502 Americans living abroad gave up their U.S. nationality in the last 3 months of 2009,more than twice the figure for the whole of 2008.

The New York Times said,"frustrations over tax and banking questions,not political considerations,appear to be the main drivers of the surge".

The United States has been accused by expats of "double-taxing",since it is the only industrialized country to tax citizens on their overseas earnings,even if they have already been taxed once by their country of residence.

The newspaper pointed out that expats are able to discount the first $91,400 of their income abroad,but this still means that for high earners the tax burden is considerable.

One ex-American citizen living in Switzerland told the paper,"having lived here [in Switzerland] 20 years and having to pay and file while seeing other countries’ nationals not having to do that,I just think it’s grossly unfair ... It's taxation without representation."

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Visit the New Yorks Times website to read the full story or visit our advice pages to find out more aboutliving in Mexico.

 

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