The US does have the most burdensome tax regime in the world in the sense that it (along with Eritrea, which presumably lacks the same ability to enforce its will on the rest of the world in violation of every other country’s sovereignty) is the only country to tax its citizen’s income globally.
But this issue has become compounded by FATCA. The burden here is greater than just cumbersome paperwork that we must all file with the Financial Crimes Enforcement Network, although the criminality of failing to do so or of improperly computing the highest annual balance in your financial accounts creates a huge amount of unnecessary stress (unnecessary in the sense that the IRS already collects this information for US citizens’ financial accounts in most countries, including Taiwan).
This also makes it more difficult to obtain financial services overseas. Maybe not for a bank account, or even a stock trading account, but anything more complex is basically impossible because the banks and other financial institutions don’t want to take the risk of angering the IRS or US Treasury Dept.
The burden is even higher for US citizens who lose corporate job opportunities because of their requirement to report all information about bank accounts over which they have signature authority (i.e., corporate officers). They might lose these opportunities because the corporations do not wish to report these accounts to the US treasury, or because the corporations fear the legal risks of “incorrect” reporting, or because the individuals themselves fear the risks of getting it wrong on their FBAR – which is a criminal offense, not a civil offense. This is not a concern for those living and operating in the US only, so you are wrong to state that the Federal government already has this data.
None of the above apply to anywhere else in the world, including socialist countries that you may admire such as Sweden, Denmark, France, or Canada. These countries, who sit the pinnacle of Wakefulness, do not apply such a mad system on their expatriate citizens. Are you suggesting that they should learn from the wise ways of Washington DC? Moreover, US citizens who renounce do not need to seek sanctuary in Afghanistan or Somalia in order to find countries where they are not taxed globally or burdened with onerous tax reporting requirements or financial account reporting requirements.
The US government releases the names of citizens who renounce, but not, as far as I know, the countries of emmigration. I suspect that they will quietly drop the practice of naming names because it was intended as a mechanism of publically shaming the renouncing former citizens but instead has become symbolic of the stupidity of the Fatca laws. I would argue, without evidence, that the largest country of emigration in terms of the number of individuals is very likely to be Canada. These are not all the fat cats whom you so despise. I’d be willing to stand heavy odds that the number of US emigrees to Afghanistan is zero.
For some, the reason for renouncing is probably the requirement to pay tax, but this requirement has existed since the Reconstruction era and it has been aggressively enforced for more than a decade. The number of renunciations only went parabolic after Fatca was adopted. Granted, Fatca makes it more difficult to hide assets (but not impossible for those with the sufficient wealth, as we can see now with the Manafort thing). But Fatca does not actually increase one’s legal tax burden – so perhaps you might consider that the ancillary damage of Fatca (i.e., employment and business opportunities that would be lost or forsaken because of FATCA by those who remain citizens) may be a more pertinent reason for the increase in renunciations. What this means is that a large number of economicallly-productive people (post-FATCA renouncers, if that’s a word, now number in the tens of thousands in aggregate) are no longer paying taxes to fund the US Federal budget that pays for the weapons, handouts, and interest on the Federal debt. Again, these are not deadbeats – deadbeats are those who fail to pay or file, or those who file fraudulently (which includes filing fraudulent returns in Taiwan even though it’s the boss’s fault – not that anyone on Forumosa would ever facilitate anything like that).
Simply put, FATCA is a dumb law.
I agree with your point that the tax preparation industry is a major reason why this situation will never be alleviated. But this only further supports the argument that the system is fucked. The tax preparation / FATCA preparation industry benefits from the incredible complexity of the US tax code and is a strong and well-funded lobbying force, unlike expat individuals – but that is hardly a cogent argument against simplifying the tax code or eliminating FATCA. It’s like saying that we should keep dropping bombs on other countries because Raytheon supports such policies.
As for the value of consulate services, I’d say we’re getting a raw deal. I already have to pay for my passport, both through the taxes that I pay and the specific fee for the passport itself. Also, do not assume that passports are a naturally-occurring phenomenon – they are not an endogenous feature of mankind but rather a product of centralized government power that only emerged in the latter part of the industrial revolution (along with other goodies like Coke, Pepsi, fascism, communism, the Federal Reserve Bank, and World War 1). I concede that having a passport is useful in today’s Orwellian global order, but once they stopped handing out extra pages, they lost me. As far as visas for foreigners, I reckon foreigners ought to pay for that service. They aren’t going to provide you with legal assistance – they may give you names of service providers, but I reckon a google search will suffice.
And again, please don’t assume that the marines are coming to your rescue when the missiles start flying across the Strait – there are far too many US passport holders here for a helicopter evacuation. If you don’t believe me, call AIT and ask them what their contingency plan is. They’ll tell you that they’ve got a very detailed plan to evacuate government employees and their families – but not you. Or, more to the point, me.