There’s nothing like being an American, right? I mean, we’re only 5% of the population and enjoy 25% of the world’s GDP (while consuming 25% of the world’s energy of course). That aside, in general, you don’t see people from around the world flocking to any country but America. We have a vibrant job market (usually), the best opportunities for startups, education, freedom, and well, all kinds of other good stuff.
So, what would entice someone to renounce their US citizenship? Cold hard cash. That’s what one of the initial founders of Facebook has done, foresaking the US for Singapore (even though he’s Brazilian…long story, but it’s clearly a tax thing). As widely reported in the media in advance of the Facebook IPO, Eduardo Saverin is now a proud citizen of Singapore (Mashable Story).
How Much Would You Need to Renounce Your Citizenship?
Obviously, it would be unlikely to find yourself if the same exact situation as Mr. Saverin. For one, he wasn’t born an American, so perhaps he doesn’t have the same emotional or ethical attachments to remaining American as a lifelong American. Additionally, his move was one of “incremental income” as opposed to a binary question like the one I asked. While he’ll still have some exit taxes and others taxes to be sure, if his stake is worth $5 Billion and he would have paid say, $1.5 Billion in taxes as an American and $800 Million (both purely hypothetical guesses since no legitimate media outlet has actually shown the tax estimates) as a resident of Singapore, this is more an issue of walking away with a huge amount either way. Greed? Maybe. Pragmatism? Sure. Principal? Perhaps.
But just for the sake of argument, if you had an opportunity to attain a large lump-sum payment by renouncing your citizenship, how much would it take? $100,000? $1 Million? $10 Million? What’s your number? Think about becoming say, a Canadian or a Mexican. You could easily cross the border somewhat routinely, still own real estate in the US; heck, you and your kids could even go to US colleges and get aide on the back of US taxpayers! So, what’s stopping you? Good old fashioned patriotism? Objectively weigh the pros, cons and the value to you and let us know what your number is!
New Legislation Coming?
In their infinite wisdom, based on this headline, we’ll probably see Congress enact some sort of silly legislation to grab a headline, just like preventing lotto winners from collecting unemployment or eliminating tax writeoffs for corporate jets. I could envision the “Citizen Renouncer Tax Dodger Act” or something along those lines to make it more difficult to avoid taxes for founders of IPOs where the US will recoup lower tax revenues than if the founder had remained a US citizen. Of course, rather than addressing the real challenges confronting the nation, this will be a campaign check in the box for some senator somewhere that ends up generating no revenue.
Anyway, I’d Love to Hear Your Number and I’ll Share Mine.