The Tax Man Drives American Citizens Away—David Frum

In April of 2010, I wrote a piece for FrumForum about how the burdens of double taxation were forcing a record number of Americans living abroad to renounce their US citizenship. In 2009, 743 expatriates gave up their citizenship according to the State Department (the IRS which has its own figures).

Fast forward to 2012, and the numbers seem to have only gotten larger:

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.

…The National Taxpayer Advocate's Office, part of the IRS, released a report in December that details the difficulties of filing taxes from overseas. It cites heavy paperwork, a lack of online filing options and a dearth of local and foreign-language resources.

For those wishing to legally escape the filing requirements, the only way is to formally renounce their U.S. citizenship. Last year, IRS records show that at least 1,788 people did, and that's likely an underestimate. The IRS publishes in the Federal Register the names of those who give up their citizenship, and some who renounced say they haven't seen their name on the list yet.

The State Department said records it keeps differ from those published by the IRS. They indicate that renunciations have remained steady, at about 1,100 each year, said an official.

While there are some discrepancies in the numbers, a trend towards more renunciations is still distressing.

The double-taxation of foreigners is one of the few tax policies I can think of which has actually had the affect of making Americans "Go Galt" and go out of their way to (legally) stop paying taxes to the US government.

Update: I should clarify. Americans try to find ways to legally reduce their tax burden all the time. Renouncing your citizenship means you have no obligations to pay any American taxes at all.