[Rushtalk] More renounce US citizenship but deny stereotype

Carl William Spitzer IV cwsiv at copper.net
Sun May 25 18:15:01 MDT 2014


 

                                    
              More renounce US citizenship but deny stereo
                                    
                                    
                            By ADAM GELLER 
                                    
                                                      
 (AP) This July 2012 photo provided by Carol Tapanila shows her and her
                                second husband in Calgary,...
                                              Full Image
                                    
                                    
Inside the long-awaited package, six pages of government paperwork dryly
affirmed Carol Tapanila's anxious request. But when Tapanila slipped the
  contents from the brown envelope, she saw there was something more. 
                                    
 "We the people...." declared the script inside her U.S. passport - now
 with four holes punched through it from cover to cover. Her departure
  from life as an American was stamped final on the same page: "Bearer
                          Expatriated Self." 
                                    
With the envelope's arrival, Tapanila, a native of upstate New York who
  has lived in Canada since 1969, joined a largely overlooked surge of
 Americans rejecting what is, to millions, a highly sought prize: U.S.
  citizenship. Last year, the U.S. government reported a record 2,999
people renounced citizenship or terminated permanent residency; most are
widely assumed to be driven by a desire to avoid paying taxes on hidden
                                wealth. 
                                    
 The reality, though, is more complicated. The government's pursuit of
tax evaders among Americans living abroad is indeed driving the jump in
 abandoned citizenship, experts say. But renouncers - whose ranks have
  swelled more than five-fold from a decade ago - often contradict the
   stereotype of the financial scoundrel. Many are from very ordinary
                        economic circumstances. 
                                    
                                                      
(AP) This circa 1981 photo provided by Carol Tapanila shows her children
                            wearing cowboy hats in Airdrie,...
                                              Full Image
 Some call themselves "accidental Americans," who recall little of life
  in the U.S., but long ago happened to be born in it. Others say they
  renounced because of politics, family or personal identity. Some say
signing away citizenship was a huge relief. Others recall being sickened
                           by the decision. 
                                    
At the U.S. consulate in Geneva, "I talked to a man who explained to me
   that I could never, ever get my nationality back," says Donna-Lane
Nelson, whose Boston accent lingers though she's lived in Switzerland 24
years. "It felt like a divorce. It felt like a death. I took the second
            oath and I left the consulate and I threw up." 
                                    
  When Americans do hear about compatriots rejecting citizenship, it's
 more often people keeping their U.S. citizenship and dropping that of
                           another country. 
                                    
Last year, Texas Sen. Ted Cruz acknowledged the Canadian citizenship he
   was born to, but said he would renounce it. In 2012, Rep. Michele
  Bachmann, R-Minnesota, saying she was "100 percent committed to our
     United States Constitution," announced she was giving up Swiss
                 citizenship gained through marriage. 
                                    
 One of the few times rejected U.S. citizenship has gotten significant
 ink was Facebook co-founder Eduardo Saverin's 2011 decision to turn in
his American passport after moving to Singapore. Saverin likely avoided
   millions of dollars in taxes by doing so shortly before Facebook's
                        initial stock offering. 
                                    
                                                      
      (AP) This undated photo provided in April 2014 by the Pure Youth
                          Construction basketball team shows...
                                              Full Image
Other wealthy Americans also have relinquished U.S. citizenship. Denise
Rich, the ex-wife of pardoned trader Marc Rich, expatriated in 2012 and
     lives in London. Last fall, singer Tina Turner, a resident of
        Switzerland since 1995, relinquished her U.S. passport. 
                                    
But Saverin's decision, in particular, hit a political nerve, along with
 scandals surrounding UBS and Credit Suisse, which were caught matching
               wealthy Americans with offshore accounts. 
                                    
In recent years, federal officials have stepped up pursuit of potential
tax evaders, using the Foreign Account Tax Compliance Act which requires
that Americans overseas report assets to the IRS or pay stiff penalties.
   Those trying to comply complain of costly fees for accountants and
   lawyers, having to report the income of non-American spouses, and
 decisions by some European banks to close accounts of U.S. citizens or
                           deny them loans. 
                                    
But some of those surrendering citizenship say their reasons are as much
 about life as about taxes, particularly since the U.S. government does
   not tax Americans abroad on their first $96,600 in yearly income. 
                                    
    Decisions to renounce "are driven by a whole range of emotional
  considerations. ... You've got anger, you've got fear, you've got a
strong sense of indignation," said John Richardson, a Toronto lawyer who
advises people on expatriation. "For many of these people, this is not a
                          tax issue at all." 
                                    
                                                      
(AP) In this Jan. 17, 2014 photo provided by the Pure Youth Construction
                              basketball team, Quincy Davis...
                                              Full Image
Even some who acknowledge tax worries say decisions to renounce are far
        more complicated than a simple desire to avoid paying. 
                                    
  Peter Dunn, born in Chicago and raised in Alaska, moved to Canada to
 pursue a graduate degree in theology. He met his wife, Catherine, and
they made Toronto home when her work as one of the owners of an aviation
              maintenance firm made her the breadwinner. 
                                    
 Dunn remained an American. But he was alarmed by a change in U.S. law
 requiring those with more than $2 million in assets to pay an exit tax
if they gave up citizenship. He didn't have $2 million. But his wife was
  doing well enough that he imagined one day they could get there. The
idea of the U.S. government taxing his Canadian wife's money didn't seem
                                right. 
                                    
"When I learned about that, I decided that to protect my wife, I better
                         expatriate," he says. 
                                    
 Corine Mauch arrived at the same decision by a different route. Mauch
 was born a U.S. citizen to Swiss parents who were college students in
 Iowa. They lived in the U.S. until she was 5, then again for two more
years before she turned 11. Mauch maintained dual citizenship even after
she was elected to Zurich's city council. But when she became mayor, she
                             reconsidered. 
                                    
                                                      
(AP) In this Wednesday, March, 21, 2010 photo, new members of the Zurich
                              City Council stand with Mayor...
                                              Full Image
 During the last American presidential election, "I asked myself 'Where
     do I feel at home?' And the answer is clear: In Zurich and in
   Switzerland. My attachment to America is limited to my very early
 youth," Mauch said. Double taxation was "not the crucial factor for my
    decision. But I will not miss the U.S. tax bureaucracy either." 
                                    
           Taxes play little or no role in other decisions. 
                                    
Norman Heinrichs-Gale's parents were missionaries from Washington state
  who raised him in Asia and the Middle East. In 1986, he traveled to
  Austria with his American wife, and they found work at a conference
center in an alpine valley town of 6,000. The jobs were supposed to last
a year. But the couple stayed, sending their children to local schools. 
                                    
  On yearly trips to the U.S. he felt increasingly like a stranger. "I
  never forget going into a grocery store and just being stunned by my
choice of cereals," Heinrichs-Gale says. "I was stunned by just the pace
of life compared to what we have here, stunned by the extremes of wealth
                   and poverty that I encountered." 
                                    
  There wasn't one single thing that pushed him away. But his children
wanted to attend Austrian colleges and he and his wife wanted to vote in
the country they considered home. The family was tired of renewing visas
     and work permits. And so they signed documents giving up U.S.
citizenship. Now, one of the last vestiges of American culture in their
            home is watching Seattle Seahawks games online. 
                                    
                                                      
    (AP) In this Sunday, Feb. 9, 2014 photo, Zurich Mayor Corine Mauch
                              speaks to reporters after her...
                                              Full Image
 Sports played the central role in Quincy Davis III's decision. Davis,
 raised in Los Angeles and Mobile, Ala., played professional basketball
 in Europe after three years as Tulane University's leading scorer. By
2011, he was home studying to become a firefighter when he was offered a
  spot on a Taiwanese pro squad. He's since helped lead the Pure Youth
                Construction team to two championships. 
                                    
When the team's owner suggested last year that he join Taiwan's national
      team, Davis says he found little motivation to keep his U.S.
                             citizenship. 
                                    
"When you think about who I am as a black guy in the U.S., I didn't have
 opportunities," he says. "You get discriminated against over there in
 the South. Here everyone is so nice. They invite you into their homes,
 they're so hospitable. ... There's no crime, no guns. I can't help but
                           love this place." 
                                    
 Many others cutting their U.S. ties say tax laws drive decisions that
               have nothing to do with secreting wealth. 
                                    
   "I wish I were wealthy," said Nelson, who says she takes in about
  $50,000 a year from pensions and earnings from publishing an online
                  journal covering credit union news. 
                                    
                                                      
     (AP) This circa 2008 photo provided by Donna-Lane Nelson, a Swiss
                              citizen who was formerly U.S....
                                              Full Image
Nelson has vivid memories of growing up in the U.S. Even after moving to
  Europe, she continued sending five to 10 emails a week to members of
Congress, opposing the Iraq war and the Patriot Act. After 15 years, she
acquired Swiss citizenship so she could vote. But she began considering
 expatriation only in 2010 after a banker told her that, because of new
   U.S. financial reporting laws, it was closing the accounts of many
Americans and a mistake as minor as an overdraft could mean the same for
                                 hers. 
                                    
"How would my clients pay me?" says Nelson, who is 71 and also an author
 of mystery novels. "Where does my Social Security get deposited? Where
                    does my pension get deposited?" 
                                    
    The jump in renunciations reflects evolving views about national
identity, said Nancy L. Green, an American professor at the L'Ecole des
   Hautes Etudes en Sciences Sociales in Paris. When the U.S. got its
 start, citizenship was defined by "perpetual allegiance" - the British
  notion of nationality as a birthright that could never be changed. 
                                    
American colonists rejected that to justify becoming citizens of a newly
 independent country. But changeable citizenship wasn't widely embraced
until the mass immigration of the late 1800s, says Green, a historian of
                      migration and expatriation. 
                                    
  Even then, U.S. artists and writers who moved to Europe in the 1920s
 were criticized, suspected of trying to avoid taxes. Until the 1960s,
U.S. citizenship remained a privilege the government could take away on
certain grounds. It's only since then that U.S. citizenship has come to
 be viewed as belonging to an individual, who could keep - or surrender
                            it - by choice. 
                                    
   But Carol Tapanila's life in Canada has tested that redefinition. 
                                    
 Six years after Tapanila's husband lost his job at a Boeing factory in
 Washington state and they moved to Canada for work, the couple became
citizens of their new country. She says U.S. consular officials told her
  that, by swearing allegiance to Canada, she might well have lost her
                         American citizenship. 
                                    
   After retiring from a job as an administrative assistant at an oil
 company in Calgary, Tapanila began putting $125 a month into a special
  savings account for her developmentally disabled son, matched by the
  Canadian government. In her will, she authorized creation of a trust
 fund to draw on retirement savings and other assets to provide for her
                 son, who is now 40, after her death. 
                                    
Tapanila says she didn't know she was required to file U.S. tax returns
  until 2007, when her daughter raised the subject. Her troubles were
 compounded by her decision to apply for a U.S. passport after a border
  officer told her she should have one. She has since spent $42,000 on
 fees for lawyers and accountants and paid about $2,000 in U.S. taxes,
      including on funds in her son's disability savings account. 
                                    
   In 2012 she turned in the passport, renouncing U.S. citizenship to
 protect money saved for her retirement and her son. Tapanila, 70, has
  tried and failed to renounce U.S. citizenship on his behalf, saying
   officials told her such a decision must be made by the individual
                                alone. 
                                    
"You know, we are not rich people and we are not tax evaders and we are
    not traitors and I'm more than tired of being labeled that way,"
                            Tapanila says. 
                                    
"I'm sorry that I've given my son this burden and I can do nothing about
 it ... I thought we had some rights to go wherever we wanted to go and
 some choices we could make in our lives. I thought that was democracy.
                  Apparently, I've got it all wrong." 
                                    
                                  --- 
                                    
 AP writer Peter Enav in Taipei contributed to this report. Adam Geller
      can be reached at features(at)ap.org. Follow him on Twitter
                   at .https://twitter.com/adgeller 
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
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