RUSCO (the Renouncing US Citizenship Organization) was created by International Affairs expert Trey Archer, to assist US citizens overseas with their financial planning and US passport holders renouncing or considering renouncing their citizenship.
RUSCO recently published an interesting article titled: “Not Just Taxes: Other Reasons Why Americans Are Ditching Their Passports.”
The world is certainly unpredictable. Just half way through 2016, we’ve already witnessed several major terrorist attacks, the UK leaving the European Union, and Portugal somehow winning the Euro Cup finals after they tied all three of their opening games. It’s madness!
Another not-so-noted news story is the continuing record-breaking number of US citizens relinquishing their citizenship. According to a recent Wall Street Journal article, 2015 was the third year in a row for record-smashing US citizenship renunciations. And guess what? 2016 is expected to be even higher than the previous year. This ever growing renunciation of US passports can definitely be classified into the “unpredictable” category, but when we look at the facts, it’s not as surprising as Portugal winning the Euros.
Ever since FATCA was enforced roughly three to four years ago, the number of renunciations took off. With so many Americans living abroad negatively affected by FATCA, there’s no wonder many dropped their passports – in many cases it makes complete financial sense. However, it’s important to note that there are other things that contribute to the growing statistic of those saying “see ya” to Uncle Sam that aren’t related to taxation. Listed here are three of the most prominent.
Deterioration of Law and Order
In this year alone in the US, there has been horrific attacks against minorities, homosexuals, law enforcement officers, and many others. Every time one of these gruesome atrocities occurs, it erodes America’s credibility. To illustrate this fact, while the US (rightfully so) condemns ISIS’s mass murders of homosexuals and minorities in the Middle East, then the same thing happens within its own borders, that sends a message to the international community and Americans alike that the US can’t enforce law and order within its own borders or, much less, abroad.
If there is no law and order, crime rises and people will not feel safe. If the masses feel threatened and violence continues, they will leave. History has proven time after time that people can only be pushed so far before deciding to pack their bags and leave. Now, that’s not to say that the situation in the US is as bad as it is in say, Somalia, but it doesn’t have to be. Since Americans are accustomed to having a relatively peaceful life, all that’s needed is a moderate downturn in safety levels to generate fear.
One word – TRUMP. There hasn’t been a more controversial presidential candidate in recent memory. Love him or hate him, the facts prove that many would consider leaving the US if he were elected. After Trump became the official Republican front runner, internet searches for Americans looking to move to Canada skyrocketed, while a poll by The Hill concluded that 1 in 4 Americans would consider leaving if Trump were elected. NY Daily News has also published an article that lists the best places for Americans to move to in case Trump is elected president. Ecuador, Singapore, Canada, and Mexico all made the list.
It’s important to mention that Trump isn’t the sole root of this grave political dissatisfaction. He’s merely a representation of what the political climate in 2016 America is like – divided, controversial, polarized and angry. Surely, Hilary Clinton brings nearly as much controversy as her bitter rival does; it just depends which side of the divided political spectrum you ask. Truth be told, while the political system in the US is still much better than many others out there, if Trump is elected, it’s likely many US citizens will relinquish their citizenship.
The End of the American Dream
Many come to the US in search of better economic opportunity. For this reason, the USA was rightfully coined the Land of Opportunity with streets “paved of gold.” Times have changed. The Washington Post ran an article pointing to the fact that the US has less economic opportunity now than it did in the 1970s, while Alternet posted seven reasons why the American Dream is over. It’s even reported that about half of all Millennials believe the American Dream is dead.
There is still much more opportunity here in the US than there is in many other countries. However, like the first point mentioned above, all it takes is a slight decline in livelihood for people to become frustrated and disgruntled. After decades of families being able to say “I’ve given my children a better life than I had,” when that trend reverses, human nature will kick in and drive people to search for opportunities elsewhere. Ironically, this notion of people looking for opportunity outside of their home country is exactly what populated the United States in the first place.
As you can see, 21st century America is changing drastically. In many ways, it’s worse off: the country is less safe and more divided, and has less opportunity than past generations. On the other hand, despite a few bumps in the road, America is still a first world, developed nation where millions of immigrants would love to relocate to. It’s impossible to predict the future, but any one of the three points mentioned above (complementing each other and/or coupled with the citizenship based taxation) could very well produce other reasons why many Americans will leave their homeland.