It’s all the rage to talk about the “Fiscal Cliff”. Both Republicans and Democrats are talking about it and with good reason. It’s a serious issue.
But that fiscal cliff is closer than any of the politicians or pundits are telling us. They’re either missing or ignoring a critical set of facts – facts that point to a problem that could not only move us closer to that fiscal cliff, but multiply its already predicted disastrous effects. The problem of which I speak is that the people who will be expected to pay the taxes to keep us from going over that cliff are leaving in alarming and growing numbers.
Since Barack Obama took office, formal expatriations have spiked almost 8-fold, from a record low in 2008 to a record high in 2011. As part of the 1996 Health Insurance Portability and Accountability Act, the federal government has been required to publish in the Federal Register the names of every US citizen who formally renounces his US citizenship. A count of the names on those lists reveals that in 2008, only 231 US citizens renounced their citizenship. But in 2011, the number of expatriates reached 1,782. But those are just the very few people who “formally” renounced their citizenship.
For every citizen who formally expatriates, many more citizens just drop out, becoming informal expatriates. In fact, this informal expatriation has become so common that those who take this route have developed their own term for it. They call themselves “PTs”. The term “PT “is a catch-all term that has a variety of similar meanings, including “Practically Transparent”, “Privacy Trained”, “Prior Thrall”, and “Permanent Tourist”. It is the nature of these definitions that tell us that PTs tend to be somewhat secretive. Therefore, it’s very difficult to accurately measure their numbers.
But the respected polling firm Zogby International figured out how to do it. Count them before they leave. In 2008, Zogby published a press release, in which they reported the result of seven polls that they had recently concluded. In that press release, they stated:
1.6 million U.S. households had already determined to relocate abroad; an additional 1.8 million households were seriously considering such a move, while 7.7 million more were ‘somewhat seriously’ contemplating it.
Overall, Zogby determined that “by a modest estimate”, more then 3 million US Citizens a year are relocating offshore. But that’s not to suggest that all of those people will become permanent expats. In fact, historically, only a little more than half of US citizens who relocate their home to another country will never return. So that means that whether by intention or circumstance, about 1.5 million will become permanent expats. But keep in mind, that was in 2008 – the same year that official renunciations were at a record low.
The question that we have to ask is: “While formal expatriations have been skyrocketing for the last three years, what’s been happening to those informal expatriations?”
Unlike formal renunciations, we don’t have factual numbers on the increase in informal expatriations. But we do have a set of facts that should give us a pretty good idea of where those numbers are headed. Let’s look at those facts.
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