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Dan Moffett

Congress Considers New Penalties For Giving Up U.S. Citizenship

By July 16, 2012

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Congress is considering new sanctions against Americans who renounce their U.S. citizenship to avoid paying taxes.

The legislation in the U.S. Senate is aimed at wealthy businessmen and investors who use citizenship renunciation to protect their fortunes.

Grammy-nominated songwriter Denise Rich gave lawmakers new incentives to pass legislation this month when she gave up her U.S. citizenship and moved to London. She also holds Austrian citizenship.

Rich, 68, is the ex-wife of billionaire Wall Street investor Marc Rich, who was pardoned by President Bill Clinton after fleeing to Switzerland to avoid prosecution for tax evasion and profiteering allegations. She has written songs for Mary J. Blige, Aretha Franklin, Jessica Simpson and Mandy Moore.

Denise Rich's renunciation comes after Facebook co-founder Eduardo Saverin gave up his U.S. citizenship and moved to Singapore earlier this year. Saverin saved millions in U.S. taxes when Facebook became a public company.

Sens. Chuck Schumer, D-N.Y., and Bob Casey, D-Pa., are sponsoring the Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act. The bill would eliminate the tax advantages to renouncing U.S. citizenship and also impose a 30% capital gains tax on those who give it up.

Some members of Congress support even stronger sanctions, including prohibiting those who renounce their citizenship from re-entering the country again.

Some famous Americans -- entrepreneurs, entertainers, political activists, business people -- have decided to give up their citizenship over the years. Find out who has chosen renunciation and why they took such a drastic step.


July 16, 2012 at 5:47 pm
(1) Harry says:

Maybe they should think about joining the 21st century. The United States is the only country in the civilized world that taxes people based on citizenship and not residency.

July 16, 2012 at 8:59 pm
(2) Boston T. Party says:

US Congress is chasing American expats away with citizenship based taxation and reporting requirements from hell. American Expats, most of whom are regular Joes, are rapidly pulling the plug on US citizenship.

Who can blame them? The only other country that harasses its citizens abroad for taxes is Eritrea, which was recently condemned by the UN for doing so.

Renunciations of US citizenship are on the rise and will continue to increase unless citizenship based taxation and the crazy reporting requirements that comes with it is abolished.

July 17, 2012 at 1:43 am
(3) matthew says:

Here’s an idea! The Army Corps of Engineers could hire a Russian subcontractor to build a concrete wall around the United States and make everyone a prisoner. Then Congress could charge an exit fee from everyone who wants to escape the IRS and Obamacare. They’ll make millions!!!

July 17, 2012 at 8:57 am
(4) Alex Buds says:

America is the only country which taxes its citizens when they reside overseas (in addition to whatever taxes they face locally). This has made life miserable for millions of Americans overseas who are mostly just regular people with ordinary jobs, unlike the Saverins and Richs who get the headlines and make uninformed Congress members angry. They can’t even get a bank account overseas because banks overseas don’t want to deal with the added paperwork burden. Abolish citizenship based taxation now and bring America into the 21st century – and no American will consider renouncing again.

July 17, 2012 at 7:46 pm
(5) ziona says:

My grandparents fled the Nazis to come here. Now, I the US government is sounding just like them. Carl Levin, Chuck Schumer and the like – of both parties – are sounding very familiar. Now I know why we are the hosts for the UN building. The US government fits in just fine with the human rights abusers in Africa, and the Middle East. It’s laughable that we judge them in any way. Obvioulsy, the US government and these imbeciles hate the people of the US. They want to rob us as gunpoint too. Now the US government wants to hold people hostage. So, instead of an Iranian hostage crisis, there is an American one.

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June 15, 2013 at 3:50 pm
(7) Jay johnston says:

Amazing how we as a country refuse to recognize and address the millions of able bodied adults who refuse to go to work to support themselves and their households.
We would have less of a tax issue, less crime, healthier population mentally and physically, less government if we focused on getting people up and out of bed early and in to work, like I have done my whole life.

There should not be one job opening regardless of pay that a welfare recipient who gets thier housing paid for, health coverage paid for, electricity paid for, food paid for by my tax dollars should not be required to apply for.
I moved my family to another state to accept a much lower paying job & lousy benefits .I continue to push forward, count pennies and strategize on how to get back on top. I am educated and grew up poor and fatherless.
The current administration encourages people to stay home and bleed the taxpayer Ie “those suckers who actually earned every dime in their pocket books”
Instead of looking at the bottom of the economy and seeing precious vast resources be sucked away and given to people who have no skin on the game, we chase off the smart ones and shake them down for their obligation to taxation. It’s easier to pick on the people who have something to lose.
That’s why the average joe considers going abroad and staying there.

July 8, 2013 at 10:37 pm
(8) Psi says:

It’s one thing to renounce citizenship – which also means renouncing rights to live and benefit from the rights afforded with citizenship – for taxes, and quite another to renounce it for political reasons, for the sake of not being allowed to hold multiple citizenships (which is dependent on which countries are in question), etc., etc. Presupposing that all people from the US who renounce their US citizenship are doing so to free themselves of taxes is assumptive and ignorant, for one, but also presumptive that anyone living outside the US -should- pay taxes when they don’t necessarily stand to gain any positive result for themselves by doing so.

While i would love to move to the US and become a citizen, myself, i think the idea that a person should have to pay taxes to a country they no longer are a legal citizen of is absolutely backward. It’s a show that the pursuit of money – rather than the pursuit of happiness, wherever you are in the world – is the true American Dream as defined by US Congress.

July 21, 2013 at 8:57 am
(9) Jeremy Eliot says:

Some US citizens have lived outside the USA since childhood… some were at the very beginning of their adult life when they left. The have lived in that foreign country continuously , they are citizens of that country, their entire life is in that foreign country. Why in the world do they have to pay US taxes ?! . This is unjust !! They are no burden on the US economy… not even when they are unemployed. Nothing. Even their social security and healthcare costs will be paid another country!!! These people should be exempt from taxes. Justice demands it.

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