The cost of relinquishing U.S. citizenship

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My understanding has always been that if I applied to be a citizen of my husband's country, then I would automatically lose my American citizenship. An American cannot actively (as opposed to by birth, for example) become a citizen of a foreign country and still retain American citizenship. America doesn't allow that type of dual nationality.
That's what I've read on various government websites, unless I misinterpreted something.

You do not automatically lose U.S. citizenship, and now even
if your new country does not permit dual citizenship you still have to pay $2350 to relinquish U.S. citizenship.

Beneficii, the new country may not grant you citizenship until you give up your first citizenship. My father was in such a situation when he was younger.

I'm looking at the Foreign Account Tax Compliance Act (or FATCA, the abbreviation making it obvious this act is meant to reassure Americans they're going after "fat cats")...

Now personally I'd rather fund our government off tariffs and excise taxes but the cat is out of the bag as far as the 16th Amendment goes. I don't really believe in dual citizenry either, I think the US should make those born with 2 to choose in between US and whoever else's citizenry after age 18 or whatever as many in the world would do. That is what Japan does who is very strict in this regard, there shouldn't be accidental citizens.

As for this double tax, it's an issue with the foreign employer who should be paying the difference I think.(probably not a lot of mom and pop organizations) If you were able to simply travel abroad and make a bunch of money that wouldn't be taxed in this country then it would be a recipe for corruption and would obviously be used to evade.

$2300 isn't that bad to relinquish citizenship, I don't believe there are many people surrendering their US citizenship that can't afford that fee and to be honest I think it should be a lot higher for those with lots of assets. Perhaps you could put different fees for different income brackets, I dunno. I really doubt their are very many lower-middle class ex-pats, I think $2300 isn't enough for the real fat cats.

In addition to voting, proponents of citizenship taxation review many other benefits retained by nonresident citizens. Take, for example, diplomatic, consular, and emergency assistance. Kirsch cites the example of the U.S. evacuation of its citizens from Lebanon in 2006 as helping to justify worldwide taxation of citizens. A serious problem with pointing to the possibility (not entitlement) of emergency evacuation as helping to justify worldwide taxation under the benefits theory is that the U.S. government seeks reimbursement from citizens for evacuation. Logically, government services financed through fees cannot form the basis for a benefits tax. For this and other reasons, Kirsch concluded that the United States should not charge for crisis assistance. Similarly, the United States charges fees for other overseas services, such as passport renewal and departure assistance services, and nonresident green-card holders must purchase a reentry permit if they reside abroad for a period longer than a year.

Other countries that provide similar benefits to their nonresident citizens apparently conclude that such benefits do not warrant worldwide taxation of nonresidents. For example, it should not surprise us that other countries—countries without citizenship taxation—also evacuated their people from Lebanon. Similarly, other countries also provide diplomatic and material aid to their citizens abroad. Self-interest and the need to signal strength motivate countries to protect their citizens abroad. Moreover, resident citizens may demand that a country act to protect nonresident citizens. Some countries’ constitutions even require the government to safeguard emigrants.

The United States appears to be dragging out the renunciation process, said Kevyn Nightingale, a tax partner at MNP LLP in Toronto, whose firm has done tax filings for nearly 200 clients giving up their U.S. citizenship. “There are a lot of consular services being provided to Americans abroad. Nothing takes this long,” he said.

U.S. officials may be embarrassed that their efforts to crack down on wealthy tax cheats has instead triggered an exodus of frightened middle-class Canadians, Mr. Nightingale suggested. “It does not look good to have a lot of Americans renouncing their citizenship because of stupid rules – rules that don’t generate significant revenue,” he argued.

Dear Mrs. Obama:

I gave up my U.S. citizenship this year, so I cannot vote. And if I could, I wouldn’t vote Democrat. It’s not that I hate liberals. I am one. And the Republicans honestly make me sick. The bottom line is America has lost its way in this world, and neither party, in my humble opinion, is going to make any headway in making it better.

I have lived abroad most of my life. This is my 46th year in Canada. I married Canadian, my kids are Canadian, not American, I have worked my entire life in Canada. I invest here, and will retire here. I am Canadian, but as you are likely aware, giving up that USA brand is not easy. I have many relatives living in the 50. I used to love to visit them. At the moment, I couldn’t care less if I ever cross that border again.

This brings me to my main reason for handing in my passport: you are still taxing me. I hope you continue reading, as I get the sense that homelanders typically shrug off our complaints as sour grapes and tax avoidance. It is anything but. My issues are fundamental. My issues are based on American values and the Constitution. Since those values and the Constitution have failed me, I am gone, as are thousands of others. It is a national disaster, that in my opinion, will be a black mark on your husband’s legacy.

I want you to consider the duty to file and pay taxes based on citizenship. It sounds patriotic, and all red, white, and blue, but I’d like to reword it for you: “citizens shall pay taxes to the United States because the U.S. owns them.” They do not have the right to walk away from this obligation, despite what the United Nations proclaims, because the U.S. owns them.

They are chattel. They are economic slaves. I am being treated as a slave. I live, work, and pay taxes in Canada, yet my master needs his payment. The concept is against everything I consider American.

Consider also sovereignty of foreign nations, something I can’t claim the U.S. has ever respected. The U.S. does not allow foreign countries to step in and tax its businesses and its citizens at home, its economic contributors. America’s practice of taxing its citizens abroad is basically what Mr. Trump accuses Mexico of doing: sending its citizens to America to generate dollars to send home. It is a despicable concept which the Democratic Party has rightly laughed at. Yet this is what you do with citizenship-based taxation, FBARs, and FATCA.

You tax monies earned abroad by your citizens. You tax capital gains on private homes in the UK. You apply Social Security and Obamacare taxes on mom & pop businesses operating overseas. You tax lottery winnings considered tax-free economy boosters in foreign lands. Your actions pirate money from foreign economies, and you pretend it is okay because we victims are American.

We are not the only victims. Our families, our communities, and our host nations all suffer from your syphoning. You steal funds, jobs, and debt. America is the biggest tax cheater of them all. The fact that you justify it based on patriotism is disgusting to me, and to almost all of the 8.9 million citizens abroad.

I could write all day about how I am personally abused. I cannot invest in mutual funds. I face invasions of my privacy and my family’s privacy. I cannot save for retirement, cannot open the financial accounts my neighbours can, etc. America upping its fees to prevent us from leaving is nothing more than extortion. The American government is nothing more than a disgusting bully. If I could still vote, I’d vote for the worst of the opposition, because I hate what your husband and his cabal are doing to American citizens like me.

Sincerely,

A Canadian, no longer American, in New Brunswick, Canada

If fat cats leave America to avoid paying taxes, then in my humble opinion, they should have their property nationalized, and told to enjoy life without taxes.

We should cut to the chase and just nationalize their property either way

There are better ways to prevent avoidance and abuse that are practiced by other developed countries. They are detailed in the Mason article on pages 231 to 236. Here's a rundown of some of the ways:

- Only tax citizens for, say, 3 years after leaving. This is the Finnish policy.

- Tax U.S.-based assets and income.

- Don't cut them loose from U.S. taxes until they establish tax residence in another country.

- Use an exit tax for people moving abroad.

These preposals aren't mutually exclusive and they allow us to lift these excessive burdens off the shoulders of middle-class and working-class Americans who have permanently settled abroad while keeping wealthy high-rollers from abusing the system. Our current system, flat out, does not work and puts many Americans abroad into untenable situations. The sooner we realize and deal with this, the better.