More American Expatriates Give Up Citizenship

The New York Times has a story that ought to cause concerns in Washington. Americans living and working overseas are beginning to increasingly renounce their citizenship because of double taxation issues and the fact that they are treated as would be terrorists in their financial dealings. And the story does not even get into the issue of LGBT Americans who are moving overseas so that they can be together with their partners who may be unable to remain in the USA. One would think that keeping hard working citizens would be a priority for the U.S. government, but it seems that such is not the case. Not only is the USA no longer the true land of the free where religious freedom is truly afforded to all citizens, but now its expatriates are getting screwed financially as well. Frankly, as third class citizens in Virginia (second class in the nation as a whole) the boyfriend and I have no strong compunction to remain in America once our elderly parents pass. Indeed, my children for the most part likewise recognize that the USA is a fraud in terms of legal equality for all. Citizenship is a two way street and not just about what citizens can do for a country, but also about what a country gives back to its citizens. Here are some story highlights:
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Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.
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“What we have seen is a substantial change in mentality among the overseas community in the past two years,” said Jackie Bugnion, director of American Citizens Abroad, an advocacy group based in Geneva. “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.”
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Anecdotally, frustrations over tax and banking questions, not political considerations, appear to be the main drivers of the surge. Expat advocates say that as it becomes more difficult for Americans to live and work abroad, it will become harder for American companies to compete.
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American expats have long complained that the United States is the only industrialized country to tax citizens on income earned abroad, even when they are taxed in their country of residence, though they are allowed to exclude their first $91,400 in foreign-earned income.
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Some U.S.-based banks have closed expats’ accounts because of difficulty in certifying that the holders still maintain U.S. addresses, as required by a Patriot Act provision. “It seems the new anti-terrorist rules are having unintended effects,” Daniel Flynn, who lives in Belgium, wrote in a letter quoted by the Americans Abroad Caucus in the U.S. Congress in correspondence with the Treasury Department.
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Kathleen Rittenhouse, who lives in Canada, wrote that until she encountered a similar problem, “I did not know that the Patriot Act placed me in the same category as terrorists, arms dealers and money launderers.”
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Relinquishing citizenship is relatively simple. The person must appear before a U.S. consular or diplomatic official in a foreign country and sign a renunciation oath. This does not allow a person to escape old tax bills or military obligations. Now, expats’ representatives fear renunciations will become more common. “It is a sad outcome,” Ms. Bugnion said, “but I personally feel that we are now seeing only the tip of the iceberg.”

Discrimination Results in $20,000 Bill In Rollback Property Taxes

Some time ago I did a post about a religious organization in New Jersey, the Ocean Grove Camp Meeting Association, which was facing the possible loss of its tax exempt status for real estate tax purposes due to its refusal to allow two lesbian couples to have their civil union ceremonies in the pavilion. That action has finally resulted in the tax exemption in fact being rescinded and the Meeting Association being presented with a bill for retroactive taxes in the amount of $20,000.00 (http://www.app.com/apps/pbcs.dll/article?AID=/20080223/NEWS/80223002/1004/NEWS01). Clearly, in this case discrimination has a price.

When I posted my earlier comments on this story, I received several e-mails from those who thought that it was an outrage that the Meeting Association had to participate in something it did not endorse in order to keep its tax exemption. I disagreed with their analysis then and believe the correct result has been achieved. The Meeting Association knew that in order to receive the exemption, its facility had to be open and available to all. By its own conduct the Meeting Association proved that such was not the case. Actions have often consequences. What I find most humorous and ironic is that those who supported the continued exemption for the Meeting Association - and others who continue to be outraged as the Boy Scouts are stripped of sweet heart deals due to the organization’s non-inclusive policies - is that these folks don’t like living by the standards they apply when the shoe is on the other foot.

A great example of this is what happened some years back when various artists were not being approved for funding by the National Endowment for the Arts based on the content of their art which some found (often correctly) offensive to some religious beliefs. At the time, the artists alleged they were being censored and that their First Amendment rights were being curtailed. In response Christianist types pointed out that the artists could do whatever they wanted with no impact on their freedom of speech/expression, just do not expect public funding to underwrite it. Yet, when the tables are turned and groups discriminate based on religious belief they somehow believe that the public should underwrite their discriminatory actions. True to form, they want a double standard – one for them and a different one for everyone else. At best this is intellectually disingenuous and at worst it is sheer hypocrisy. The correct view is that when one takes public, tax derived funding, there ARE strings attached, namely that one loses the right to discriminate or to produce religiously offensive art as the case may be. If you want to be free to do whatever you want, the answer is very simple: do not take the public funding, or in the case of the Meeting Association, the tax exemption. You do not get to have it both ways. Here are some brief story highlights:

OCEAN GROVE — The Ocean Grove Camp Meeting Association will have to pay about $20,000 in rollback property taxes for the boardwalk pavilion, the township tax assessor has determined. Assessor Bernard Haney said Friday that he calculated the pavilion's taxes to be about $6,500 a year for 2005, 2006 and 2007.

The pavilion had been part of the association's boardwalk and beachfront property that was part of a state Green Acres tax abatement program. The association has not paid property taxes on the property since the program was established. But controversy last year over the association's refusal to allow two lesbian couples to have their civil union ceremonies in the pavilion led the state Department of Environmental Protection, which oversees the Green Acres program, to re-evaluate the association's application this year. DEP commissioner Lisa Jackson decided that because the pavilion was apparently not open to all on an equal basis — a requirement of the tax abatement program — she would not allow the pavilion to be included.