A growing number of American citizens living abroad are renouncing their US citizenship, driven by a combination of deep political divisions, restrictive tax policies, and concerns over US foreign policy.
- Government fees for renunciation have been reduced from $2,350 to $450 following a legal battle.
- The US is one of only two countries in the world, alongside Eritrea, that taxes based on citizenship rather than residency.
- Wait times for renunciation appointments at the London consulate currently exceed 14 months.
Rising Trends in Renouncing US Citizenship
The number of Americans renouncing their citizenship has shifted from the hundreds annually in the 2000s to the thousands since 2014. Current trends suggest a significant increase in filings, potentially matching the 6,000-plus cases seen in 2020.
Accessing the process has become increasingly difficult. Consulates in major Canadian cities, Sydney, and London report long waiting lists, with London’s queue exceeding 14 months and many European cities seeing six-month waits.
While government fees have dropped to $450, the total cost remains high for those seeking legal counsel. Alexander Marino, head of Moody’s law practice, notes that uncomplicated legal assistance typically costs between $7,000 and $10,000.
Political and Security Motivations
Many expats cite the US political climate as the primary catalyst for their decision. Key turning points for individuals include the 2016 presidential election and the 2020 nomination of Amy Coney Barrett to the Supreme Court.
Some citizens expressed concerns regarding the stability of American democracy and the willingness of the government to transfer power. Others pointed to US foreign policy and the potential for the US to initiate international conflicts as reasons for exiting.
New legislation taking effect this December, which makes registration for the military draft automatic for citizens aged 18 to 25, has also emerged as a point of concern for parents raising children in Europe.
Taxation and Financial Consequences
US tax policy is a significant driver for renunciation. Because the US taxes based on citizenship rather than residency, expats face complex financial obligations regardless of where they live.
These policies have created practical hurdles, such as research scientists being unable to open bank accounts in Switzerland. Additionally, under the Foreign Account Tax Compliance Act, foreign banks are required to surrender information on US clients to the US government.
The process of exiting carries financial risks. Those classified as “covered expatriates” face permanent tax implications and potential inheritance tax liabilities for their children. Such individuals may also face questioning or denial of entry when attempting to return to the US.
Professional and Personal Impact
For some, citizenship has become a professional liability. One data scientist in Norway noted that US citizenship could make him a perceived security risk in his role contracting for the Norwegian government, particularly in the event of US aggression toward allied nations.
The emotional toll varies, with some reporting a sense of “existential regret” over the loss of a country they once believed in. However, those who have completed the process generally report that they do not miss their citizenship, despite missing specific American cultural elements or foods.
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