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Thursday, June 7, 2012

Phil Hodgen on Why People Expatriate

Phil Hodgen's International Tax Blog is one of my most important sources of information about the American tax system and how it impacts Americans and Green Card holders abroad.  Solid info about a complex issue delivered with style (Mr. Hodgen has quite a way with words).

His latest post about why Americans are giving up U.S. citizenship, written while on a long-haul flight from Dubai to LA, is a must read.  It's not short but it is sweet and to the point and I think he does an outstanding job of covering all the bases.

I concur with everything he says with one exception.  He contends that one of the benefits of being a U.S. citizen is that,  "In theory, if you get in the right kind of trouble the big black helicopters will come to your rescue."

Sorry, Mr. Hodgen, but for those of us (U.S. Persons) living in places like Europe we long ago realized that this is pure fantasy.  In a developed country with nukes (like France, for example) there just won't be be any black helicopters swooping down to rescue anyone. Ever.  In fact, the U.S. Embassy isn't much help in these places even for minor stuff like assistance for American victims of domestic violence abroad or even those facing a trip to court and a prison sentence.  Best they can do is point Americans to volunteer organizations and give them a list of local English-speaking lawyers.  I have some friends here who have ended up in these situations and they pretty much had to DIY and throw themselves on the mercy of the local system.  This is not, I must point out, the fault of the Embassy personnel who are overall fine folks.  It's about the limitations of power - the Marines will not be walking into Paris or Berlin anytime soon regardless of how Americans in these places are treated (pretty well right now but that could change).

The rest of the post is dead right and I have to reluctantly agree with his assessment that it's not going to improve anytime soon.  "I expect the future to be more of the same. Expect the same exit tax rules, but more of them, and worse. Expect more expatriations. The floggings will continue until morale improves."


Anonymous said...

Hi Victoria
Phil Hodgen has indeed done a wonderful job of laying out the facts.
This brings me to another subject, "American Exceptionalism", a term which these days is often misused.
Jeb Barnes, professor at USC defined it as "a term used to describe the distinguishing characteristics of American politics and political institutions". He says "it refers to (1) a large, diverse and wealthy nation with an unequal distribution of resources (2) an individualistic political culture and (3) fragmented political institutions."
Should you ever have the inclination, I would be delighted to read your thoughts.

bubblebustin said...

To add to your point, if the US government does in fact assist in evacuation, the citizen will be required to pay, or at least promise to pay the government back for the service "“Departure assistance is expensive. U.S. law 22 U.S.C. 2671(b) (2) (A) requires that any departure assistance be provided “on a reimbursable basis to the maximum extent practicable.”
Also, I urge anyone who's considering renouncing US citizenship to ask themselves how much weight they will allow the anticipated and not yet realized actions of the US government to bear on their decision!

Victoria FERAUGE said...

@Anonymous, so pleased to meet another Hodgen fan. I wonder if he knows just how appreciated he is. We should tell him so often. :-)
American Exceptionalism. Yes, I've hard that terms used in so many contexts that I'm not sure what it does mean. A good topic though and one I will look into. Might make for a very interesting post.

@bubblebustin, Yes! I tlak to homelanders and they seem to be under the impression that those of us abroad in "sticky" situations just have to dial for help and the US gov will be there. Not at all. As you point out even in situations where US citizens lives are in peril, this service is neither automatic nor is it free.