Why the American Green Card Is Like a Steamed Bun

Recently, a report showed that statistics say the number of [those who] renounced U.S. citizenship is up by 221 percent in 2013, which raised concerns in the media. It seems that American citizenship is no longer enticing, so much so that people are giving it up and fleeing the United States. But in fact, the total number of migrants from the United States is only 2,999, while the number of people coming to the United States leaves net migration at about 843,000. There are 150 million people in the world that wish to immigrate to the United States, including about 22 million Chinese people who wish to live out the American dream.

Articles tend to focus on emigration numbers by saying “an increase of 221 percent” and “a record number” of [those who] renounced U.S. citizenship in 2013, when in fact the total number was only 2,999 people. According to new data from the U.S. Census Bureau, even with the number of people leaving the United States included, there was still a net overseas migration of 843,000 to the United States. The comparison of the two shows that the emigration numbers are insignificant. In 2011, the number of U.S. citizens or permanent residents to abandon their status reached 1,781 people, only to fall down to 932 in 2012.

Some people wish to come to the United States, and some wish to leave. Based on IRS statistics, American international tax lawyer Andrew Mitchell produced a chart that shows renounced American citizenship and permanent resident statuses. In 1998, there were 398 people; this increased to 762 in 2005. In 2006, it dropped to 278 people, and in 2007, it grew to 470, only to drop to 231 in 2008. An upward trend that culminated to 1,781 in 2011 led to a public discussion about the issue, only to have it fall again to 932 people in 2012. Now, in 2013, it has increased to 2,999 people. It appears overall that renouncing American citizenship or green card status has its ups and downs. It’s not always on the rise; though the figures may be up by 221 percent in 2013 compared to 2012, they are only up by 68 percent in comparison to figures from 2011.

The IRS does not show data on why some choose to renounce their citizenship, but the BBC, Wall Street Journal, Forbes and other media have indicated that avoiding taxes is a key reason why. The United States is the world’s only country that requires citizens and green card holders to pay income tax when overseas. In March 2010, the United States, through the Foreign Account Tax Compliance Act, began to ask U.S. citizens and permanent residents holding green cards, regardless of where they were living overseas, to declare their overseas income and also imposed a 30 percent withholding tax. From July 1, 2014 onward, all financial institutions in the world are required to disclose information about the assets of American citizens directly to the IRS to avoid tax evasion.

Although the IRS cannot disclose information about who exactly renounced their citizenship, the media has speculated that most of them are American citizens living abroad, a handful of whom are very wealthy. For example, when considering factors like high taxes and the high income tax rates range, Facebook co-founder Eduardo Saverin chose to renounce his citizenship in 2012 before Facebook’s Initial Public Offering. Based off his Facebook shares alone, he saved at least $39 million in taxes, or about 1 percent of his $3 billion personal net assets. In addition to high taxes, the Patriot Act, the Employment Promotion Act and other laws have requirements for U.S. citizens abroad. The Employment Promotion Act, for example, requires that foreign banks provide information about the accounts of U.S. citizens, once again proving to be bad news for the rich.

It is well known that America is a country of immigrants. According to a 2005 report issued by the United Nations on World Population Policies, the total number of immigrants to the United States is 38,355,000, representing 20.56 percent of the world’s total immigrant population of 186,579,300, which makes it the only country to account for more than 10 percent of this population. The latest report of the Pew Research Center in the United States shows that from 1990 to 2013, the number of immigrants living in the United States has doubled to 46 million in 20 years, far ahead of other countries like Russia, which ranked second with 11 million.