No inflation?

 — renouncing US citizenship was free of charge until a couple of years ago.

Then, overnight, the State Department imposed a $450 fee. Yesterday they increased it once again– to $2,350. That’s a 422% increase.

The State Department whined that the costs of processing renunciations had become too high; Why does a government, that  says  inflation is around 1% per year raises their prices to reflect 422% inflation in their own costs per year.

Pop quiz: What do actor Jet Li, opera singer Maria Callas, writer T.S. Eliot, financier John Templeton, actress Elizabeth Taylor, and Queen Noor of Jordan all have in common?

They are all former US citizens who went through the formal process of relinquishing or renouncing their citizenships. (Liz Taylor actually restored her US citizenship in the late 1970s)

Until a couple of years ago, there wasn’t much of a fuss about this. It was a rare occurrence for someone to renounce his/her citizenship.

Fast forward a few decades. The US government is now flat broke (actually in the red to the tune of $17 trillion) and resorting to chasing people to the ends of the earth to get their fair share of your lifetime earnings.

I have many friends overseas who are ‘accidental Americans’. A Panamanian, for example, who by accident of birth ended up a US citizen because her father was born in the Panama Canal Zone.

She lives her entire life in Panama… studying, working, building a business. Then one day she receives a note from the IRS demanding money.

They inform her that, as a US citizen, she is required to pay taxes on her worldwide income to Uncle Sam even though she has barely set foot on US soil. Then they command her to settle up.

Tax compliance has become epically aggressive even for folks born and raised in the US.

US tax code is among the most complicated on the planet. Yet the Land of the Free is one of the world's only ‘civilized’ countries where even a simple misunderstanding can win you a new career turning big rocks into little rocks whilst wearing a dayglo organge jumpsuit.

In matters of taxation, you are presumed guilty unless you can prove your innocence.

They have threatened senior citizens with imprisonment and confiscated peoples’ entire life savings merely for failing to file a form.

For example, Anton Ginzburg was fined $1.5 million by the US Department of Justice in 2011. And frankly he got off easy. He faced up to five years in prison.

What was Mr. Ginzburg’s heinous crime? What nefarious deeds had this criminal mastermind perpetrated against a peaceful society?

He didn’t file a disclosure form to report his Swiss bank account.

Note– Mr. Ginzburg wasn’t accused of tax evasion. He was fully compliant in paying his fair share to the US government. He simply didn’t file a form.

This isn’t how a free society should function.

If a government has to collect taxes by terrorizing its people or snuffing out accidental citizens, something is obviously wrong with the tax policy. AND they way they spend it.

After all, who in good conscience wants to go their entire working lives supporting a government that wastes tax dollars on bombs, drones, spying on citizens, and bankrupting unborn generations?

It’s no wonder why the number of Americans renouncing their citizenship is increasing exponentially… and will likely continue to do so.

Back when Elizabeth Taylor and T.S. Eliot did it, it was so rare there was really no process. And no fee.

In fact, renouncing US citizenship was free of charge until a couple of years ago. Then, overnight, the State Department imposed a $450 fee.

Yesterday they increased it once again– to $2,350. That’s a 422% increase.

In its explanation, the State Department whined that the costs of processing renunciations had become too high.

Curiously, a government which denies inflation even exists would complain about the consequences of it.

Have a great weekend,

Simon Black

Grandpa Comment* There need be no cost to govt.
They have to say “anyone who wants to renounce can renounce. Approval is automatic.
That is what “freedom” means.”

If you think you know other ways to beat the system rather than legally opt out of it, I strongly recommend you reconsider and explore your options with an expert.

Post your comments, thoughts, related personal experiences, corrections or questions below.