Daily Management Review

Axios reports record number of renunciations of US citizenship among the wealthy


The number of wealthy people who gave up their US citizenship last year set a record, Axios wrote. Nearly 7,000 people with assets worth more than $2 million surrendered their passports. The publication linked the trend to the wealthy's desire to save on taxes.

In 2020, an all-time record number of wealthy people gave up their US citizenship, Axios wrote. It counted 6,707 renouncing citizenship - an increase of 237% over 2019 figures, according to the project. Statistics on those renouncing US citizenship or green cards are published every quarter by the US Internal Revenue Service. The latest list was released on 29 July. However, the list only includes people with more than $2 million in worldwide assets, the online project noted.

People who give up their citizenship are mostly rich, and many of them want to reduce their taxes, Axios suggested. The United States is one of only two states in the world which levies taxes based not on residency but on citizenship . Under the laws of most countries, taxes are levied by the country where the taxpayer stays most of the year. The US imposes taxes on all citizens wherever they reside. The second such country is Eritrea in Africa.

Axios suggested that Biden's tax initiatives could reinforce the trend towards renouncing US citizenship. But in the same text, the online project noted that so far the "exodus" figures in 2021 are lower than in the past. Axios suggested that this could be due to many US embassies and consulates being closed because of COVID-19, with the procedure for renouncing citizenship requiring a State Department official to be present in person.

source: axios.com