Your options for escaping your home country have decreased dramatically in the last fifteen years.
Yes, you are still technically free to move to almost any country in the world you wish. Just pack up your things and go. And for most people in the world, that’s the road taken. The British banker who takes a job in Dubai gets on a plane and relocates to Dubai. The Singaporean entrepreneur with a business in Hong Kong simply up and leaves.
For Americans, however, this option is a bit simplistic. You may know from spending time on this site that US citizens are just about the only ones in the world required to pay tax on their worldwide income no matter where they live in the world. Got a job in Australia? No problem! You’re free to leave; just make sure you send Uncle Sam his cut of your Australian salary, any Australian bank interest, and any Australian investment income.
Just being from The Land of the Free isn’t free. Even after you leave.
The only way to extinguish these tax obligations once and for all is through expatriation – renouncing your citizenship. Nearly 2,000 people did just that in 2011 and it looks like the number was steady or increased in 2012. Of course, government is such a wizard at statistics that there are rumors the Treasury underreports renunciants.
But expatriating generally requires another citizenship to fall back on. After all, you wouldn’t want to wander the high seas as a stateless pirate. And the consular office at your friendly US Embassy likely won’t let you. They figure you might wind back up on their soil as an illegal immigrant and then you’d have to march with Marco Rubio for amnesty.
Because the US government doesn’t want it’s milk cows – especially those that actually pay into the system – getting away from them, they’ve made it their mission to curb your options for getting out while you still can.
With the world as connected as ever, governments now have more resources at their disposal to squash dissent. Just like high-tax governments use organizations like the OECD to cripple the economies of tax havens that don’t play ball with them, the US government uses its status as a world superpower to intimidate other countries into putting a lid on escape routes.
Shortly after 9/11, the island nation of Grenada shut down its economic citizenship program that offered second passports for $50,000. Quite a bargain by today’s standards. The government claimed it was for “security reasons” following pressure from the world community to make it harder for terrorists to obtain an easy entry point into the west. Belize shut down their second passport program as well.
Meanwhile, the US government was complaining to Paraguay that their easy and affordable path to permanent residence and naturalization made it too easy for Arab terrorists to go there.
Of course, this incredibly arrogant in that it insinuates these governments want terrorists or are incapable of not doing their own background checks. And for all the blather from US officials about how selling passports “cheapens” citizenship, none of the countries with economic citizenship programs have visa waiver status to the United States. That means any of the so-called “terrorists” the government used as an easy excuse to derive these countries of much-needed revenue would have had to apply for visas from their local US Embassy. Apparently the US government doesn’t have faith in its own background checking ability, either.
Or they’re just using “security” as a palatable excuse for the masses to explain why they went on a crusade to shut down other country’s legally operated citizenship programs. We all know the US government thinks it’s the only one whose opinion counts.
Across the Caribbean, citizenship by investment programs from Suriname to Belize to Guyana were shut down all in a relatively short period of time. Ireland also shut its program down shortly before 9/11; whether there was pressure from abroad in their case is unknown.
As a result, getting a second passport is now harder. Thanks to foreign government meddling as well as a new influx of rich Russians and Chinese wanting their own escape hatch, such passports are now more expensive to get. You know the government’s intrusive nature is a tax in and of itself, but would you even fathom that Grenada, for instance, is expected to increase the price for its passport by $200,000 – a five-fold increase – if and when it brings back its economic citizenship program? That’s quite a tax.
Your home country is doing everything in its power to stop you from taking your assets and leaving. Laws like FATCA are designed as de facto controls with just enough plausible deniability for the government to say its just protecting itself from “tax evaders” (too bad few or no other governments agrees with them).
As more and more people get on the government dole, more and more people will buy whatever tripe Big Government spits at them. Soon, you’ll live in a country where every violation of your freedoms is for “security” and to stop some sort of “greedy” misfit. At some point, you may have nowhere to go. The question is, will it be shame on your government for blocking your exit, or shame on you for not learning that they will?