The (very late) link of the week: U.S. Hikes Fee To Renounce Citizenship By 422%
(Forbes.com) "Over the last two years, the U.S. has had a spike in expatriations. It isn’t exactly Ellis Island in reverse, but it’s more than a dribble. With global tax reporting and FATCA, the list of the individuals who renounced is up. For 2013, there was a 221% increase, with record numbers of Americans renouncing. The Treasury Department is required to publish a quarterly list, but these numbers are under-stated, some say considerably.
Now, the State Department interim rule just raised the fee for renunciation of U.S. citizenship to $2,350 from $450. Critics note that it’s more than twenty times the average level in other high-income countries. The State Department says it’s about demand on their services and all the extra workload they have to process people who are on their way out.
The notice says:
1. Consular officers must confirm that the potential renunciant fully understands the consequences of renunciation, including losing the right to reside in the United States without documentation as an alien.
2. Consular officers must verify that the renunciant is a U.S. citizen and they must conduct a minimum of two intensive interviews with the potential renunciant. Consular officers must even review at least three consular systems before administering the oath of renunciation.
3. The final approval of the loss of nationality must be done within the Directorate of Overseas Citizens Services in Washington, D.C. After that, the case is returned to the Consular officer overseas for final delivery of the Certificate of Loss of Nationality to the renunciant.
4. These steps add to the time and labor be involved in the process. Accordingly, the Department is increasing the fee for processing such requests from $450 to $2,350."
All these steps are the exact same as consular officers have always had to do, to the best of my knowledge. I suspect in reality, each 'case' only represents 3-4 hours of work for the consular officer. Perhaps to be generous, we'll say a whole work day. But even so, the new fee is way out of proportion to the cost of paying that worker for one day and any trivial miscellaneous costs (printer ink, paper, data transmission). No, this is really more about discouraging US citizens from separating themselves and their finances from the US government and the US' absurd policy of taxation on all worldwide income (no matter where it's earned or where you live). The increase in renunciations makes the country look bad, and rather than eliminate the FATCA law that's responsible for most of it they'd rather punish anyone who's considering it. I have no plans to renounce or relinquish citizenship myself, but given FATCA's draconian reporting requirements and penalties for non-compliance I can't blame those dual citizens who don't want to deal with the headache anymore (most renunciants cited the reporting costs and difficulties in doing business overseas stemming from US policies as their primary motivation to give up their citizenship, not so much the actual taxes they had to pay). I don't really see it as unpatriotic to divorce oneself from a government and its bureaucrats that see its citizens solely as tax cows to be milked.