Formal Expatriations Spike Under Obama

Official records of the US government show that formal expatriations (renouncing US citizenship) have spiked dramatically under the Obama Administration.

Since 1996, the US government has been publishing in the Federal Register, the names of every person who formally renounces his US citizenship. Interestingly, the requirement to publish those names was part of a bill that had nothing to do with emigration, the “Health Insurance Portability and Accountability Act of 1996.”

The original idea of those in Congress, who promoted the publishing of those names, was that it would become a “List of Shame” and thus deter wealthy US citizens from leaving IRS jurisdiction. However, it hasn’t worked out quite that way.

In fact, not only have those quarterly lists not served to slow down the flight of the wealthy, they actually give ordinary people a window into US emigration that many in Congress would rather us not know about. Those lists provide us a metric by which to measure the effect of oppressive US laws and taxation, as they pertain primarily to wealthy people.

You see, all we have to do to see what the wealthy are thinking, is to count how many names appear on those lists each quarter. After all, how many poor people do you think are renouncing US citizenship?

But let’s get on to the numbers. Formal renunciations had been climbing slowly since the government began publishing that list, up through 2005. During that time, the year-to-year increase remained under 21%. Then for the next three years, the number of formal expatriations dropped dramatically. In 2008, the year before Obama took office, there were only 231 expatriations.

But as soon as Obama took office, formal expatriations began to skyrocket. In his first year in office, expatriations rose to 750, almost meeting the prior highest levels. Then the numbers climbed dramatically to record highs in the next two years.

In 2011, there were more formal renunciations of US citizenship (1782) than had occurred in the four years prior to Obama’s election (1742).

The latest versions of that list show that this trend is continuing today. In the first half of 2012, there were almost three times more formal renunciations (649) than there were in all of 2008, before Obama took office. In fact, it seems that the only thing that’s keeping the numbers from going far higher is that many of the wealthy are awaiting the results of the upcoming elections, before making their expatriation decision.

If Obama were to somehow pull out a win in November, expect formal expatriations of US citizens to skyrocket. Of course, most of those people will be among our wealthiest taxpayers.

Why is this important to the rest of us?

Those are the people who pay the vast majority of the taxes and create all of the jobs. More than 70% of US personal income taxes are paid by just the top 10% of taxpayers. As for jobs, when did you ever hear of someone getting a job from a poor person?

For those who are interested, you can find these lists by going to the Federal Register and searching for the term in quotes, “Quarterly Publication of Individuals”. Be sure to include the quotes.

For a more detailed examination of this subject, revealing just how critical this issue is becoming, I strongly encourage you to read, “The Rich Don’t Pay Tax! …Or Do They?”

Order your print version or download your eBook version now, using the links to the left.

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IRS Data Reveals More Reasons Why The Top 400 Taxpayers are Leaving

The flight of those who pay the lion’s share of taxes is nothing new. We discussed this at length in “The Rich Don’t Pay Tax! …Or Do They?” But recently released data from the IRS reveals even more reason’s why those whose taxes support this nation are fleeing the jurisdiction of the IRS.

The latest official data from the IRS shows that the share of the tax load paid by the Top 400 Taxpayers, in relation to their share of income, increased by more than 20%, between 2008 and 2009. They paid 1.45 times their share, based on income in 2008, but that number jumped to 1.75 times their share in 2009. At the same time, that IRS Data shows that this elite group, while being called upon to pay more tax, actually earned less. The average income for the Top 400 Taxpayers dropped by more than 25% during that period.

I know that many people who read this will just say, “Well the rich can afford it, so why not make them pay more?” But the problem is not that all of them are paying more. It’s that “SOME” of the rich are paying more, while others in that group are leaving. The reason why the Top 400, as a group, are earning less, is that when higher earners leave, it makes room at the bottom for less successful people to move up into the Top 400. The result is a lowering of the totals and average for the group. But worse, it means that more of the tax load must be borne by middle and lower income taxpayers.

You see, when SOME of the rich leave, it means that taxes for the rest of the rich, the middle class and even the poor, goes up to make up for that loss. When that happens, more of the wealthy and the middle class will reach their own individual economic pain threshold and they too, will leave. Taxes for those who remain will necessarily go up, which will force more to leave, which will force taxes to go even higher for the rest of us, which will force more to leave…

Well… you get the picture. It’s a snow ball rolling down hill and it threatens to soon become an economic avalanche, if we don’t do something to reverse this dangerous trend that is really, just a side effect of “Soak the Rich” policies.

Love ’em or hate em. We need the rich. We need them to keep paying the taxes and creating the jobs. Just because some people think that it’s OK to “Soak the Rich”, doesn’t mean that the rich, even though they can afford it, will go along with that policy. In fact, more and more of them are refusing to accept punishment for working hard, succeeding, providing lots of jobs and helping boost the economy for everyone.

In fact, we know of two extremely high income earners, who formally renounced US citizenship this year – Facebook co-founder, Eduardo Saverin and songwriter, Denise Rich. But for every US expat who formally renounces, more just quietly drop off the US tax radar.

When we force those who pay the lion’s share of the taxes and create the lion’s share of the jobs to move offshore, it only means that the rest of us will have to make up the difference in taxes and job creation. Of course, when was the last time you heard of anyone getting a job from a poor person?

It’s time to stop trying to “Soak the Rich” and find a way to make them stay here, where their taxes and jobs will benefit Americans. There is one policy that would certainly turn around that flight of our most productive taxpayers and job-creators. As clearly demonstrated in “The Rich Don’t Pay Tax! …Or Do They?”, the FairTax would not only stop this frightening trend, but actually reverse it, making the USA an investment and jobs magnet. Without it, the USA will just keep hemorrhaging our most prolific taxpayers, leading ultimately to an economic collapse that no president will be able to stop, without it.

If you have not yet read, “The Rich Don’t Pay Tax! …Or Do They?”, I strongly encourage you to do so now.

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