Do you make an extraordinary amount of money? Are you tired of having your wealth slowly sucked dry by the American tax system? If so, there’s a simple solution to this problem: Renounce your citizenship. Move to another country, relinquish your passport, and officially become an expatriate. It may sound like an extreme solution to a problem most of us will never have to deal with, but it’s an increasingly popular way to save some money.
The United States is the only country in the Organization for Economic Cooperation and Development that continues to tax its citizens after they relocate to another nation. In order to escape taxation and retain the meat of their bloated bank accounts, wealthy Americans living abroad are officially renouncing their nationality. The process, believe it or not, isn’t nearly as complicated as one might imagine.
According to Geneva’s Overseas American Academy, 1,780 Americans permanently coughed up their passports in 2011. That may not sound like a staggering number, but when compared to the 235 individuals who did the exact same thing in 2008, it’s quite significant. Instead of sticking around to be gouged by the IRS, wealthy individuals would rather cease being citizens of the United States. Presently, there are 6 million Americans living abroad, many of which are wondering why they continue to pay American taxes, I’m sure.
So how does one go about renouncing their citizenship, you ask? In Switzerland, a country frequented by rich folks looking for a tax break, the process is relatively painless. After attending a renunciation ceremony, potential ex-pats are asked a series of questions to determine that they thoroughly understand what happens when the process has been completed. One relatively small fee later, folks are officially cleansed of their American nationality. More importantly, they are no longer required to give away their money to the United States government.
And that, as they say, is a clean getaway.
How do you feel about renouncing citizenship to avoid paying taxes? Let us know in the comments section.