The data highlights the US expat growing dissatisfaction with the US government as well as the impact they could have had on the 2016 presidential election. See the key insights and specific stats below.
Aiming to gather opinions representative of the group at large and advocate for the interests of all Americans living abroad, our 2017 survey gathered the perspectives of 2,100-plus US expats on the subjects of taxes, government representation, the 2016 presidential election, the new administration, citizenship renunciation, and more.
- Though 73 percent of the expats surveyed in 2016 intended to vote in the then-upcoming presidential election, only 64 percent reported actually having voted. Of those who didn’t vote, 36 percent said it was because they didn’t feel any candidate represented their interests. This number is up markedly from 26 percent in 2016 and 8 percenbt in 2015.
- 28 percent don’t know how to vote while living abroad or think it’s too complex
- 20 percent don’t feel their vote would make a difference
- 13 percent don’t feel voting as an expat is important
- 88 percent of US expat respondents said they do not feel their interests are fairly represented by the US government – up 5 percent from last year
- 66 percent of US expats surveyed do not feel they should be required to file a US Tax Return while living abroad though 62 percent reported not owing taxes any taxes last year (or receiving a refund)
- Regarding citizenship renunciation, 43 percent are not currently considering it but wouldn’t rule it out; 19 percent are seriously considering it but haven’t made a decision yet; 5 percent are already planning to renounce
- 50 percent of those considering or planning renunciation cite the burden of US tax filing requirements as the reason—up 13 percent from 2016.
- 57 percent of US expats would support an initiative to repeal FATCA, the 2010 law that requires all American taxpayers to report foreign financial accounts and offshore assets.
- 10 percent of US expat respondents said they’re seeking a new bank because their foreign financial institution doesn’t want to deal with US citizens—down 2 percent from 2016.
US Presidential Election
Out of more than 2,100 respondents, 64 percent reported having voted in the 2016 US presidential election, though, in our 2016 survey, more than 73 percent said they intended to vote in the then-upcoming election. Assuming this is representative.
Of those who didn’t vote, 36 percent said it was because they didn’t feel any candidate represented their interests. This number is markedly up from 26 percent in 2016 and 8 percent in 2015, which suggests that those who didn’t vote in the 2012 presidential election may have been more inclined to vote in 2016 if a candidate had actively and adequately addressed their concerns.
By extension, it stands to reason that the drop in expat turnout may have had a material impact on the result of the 2016 election.
US expats make up a significant number of the US population—to put it into perspective, the number of US expats around the world is larger than the combined populations of Washington D.C., plus the nine smallest US states. Despite that fact, they aren’t afforded the same advantages, like congressional representation or chosen electors. Their needs are consistently overlooked by our government.– David McKeegan, co-founder of Greenback Expat Tax Services
Reports have shown that in the last quarter of 2016 — the time period coinciding with the election of Donald Trump to the US presidency — nearly double the amount of people renounced their citizenship as compared to the same period in 2015.
Greenback survey data provides further evidence that expats aren’t, at large, enamored of Donald Trump.
Forty-three percent of survey respondents said though they aren’t planning to renounce their citizenship at the moment, they wouldn’t rule it out; 19 percent said they are seriously considering renunciation but haven’t made a decision yet; and 5 percent said they are planning to renounce.
When asked how the result of the 2016 presidential election affected their thoughts on renouncing their US citizenship, 48 percent said it had made them somewhat more likely to renounce and 18 percent cited it as a major factor contributing to their decision.
Fifty percent of those considering or planning renunciation cited the burden of US tax filing requirements as the reason—up 13 percent from 2016—and 21 percent have been motivated by their disappointment with the direction of US government.
For the third year in a row, the survey found that the vast majority of expats don’t feel their interests are fairly represented by the US government— 88 percent to be exact, which is a 5 percent increase over last year.The top three actions that Americans working overseas would like addressed by the US government are:
- Repeal citizenship-based taxation
- Simplify the tax filing process
- Increase the Foreign Earned Income Exclusion and other deductions/credits to lower tax burden
IRS Amnesty Programs
Forty-six percent of US expats surveyed in 2017 have never heard of IRS amnesty program — the Streamlined Filing Process and the Offshore Voluntary Disclosure Program — put in place by the IRS to help US taxpayers catch up on their US taxes without late filing or FBAR penalties.
This number is up 1 percent since 2016 and 5 percent since 2015.
This trend is disturbing because, on January 1, 2016, an unprecedented law with new consequences was implemented for late tax filers. If an expat is behind on US taxes and owes more than $50,000 to the IRS, the US State Department can revoke their passport.
This is a daunting development for expats because the penalty for willfully failing to report foreign bank accounts starts at $10,000 – so, for example, if you have 5 unreported accounts, you could potentially hit the $50,000 total in a single year and lose your passport.
Foreign Account Tax Compliance Act (FATCA)
As you may know, FATCA is a major initiative to uncover US taxpayers who are concealing money overseas to avoid paying American taxes.
FATCA requires individuals to report their offshore assets if they exceed certain thresholds. FATCA awareness appears to be slightly down from last year. Fifteen percent of US expat respondents in 2017 said they do not know what FATCA is whereas 13 percent weren’t aware in 2016.
Thirty-three percent of survey respondents said they are affected by FATCA and must file Form 8938, while 42 percent said they are not affected –both numbers up 1 percent over 2016. Interestingly, 57 percent said they would support an initiative to repeal FATCA — up 3 percent over 2016.
Many interesting insights surfaced in this year’s survey, but perhaps the most alarming data points to the drop in expat voter turnout and the potential effect that may have had on the 2016 US presidential election.
The data shows an ongoing trend toward citizenship renunciation with the new presidential administration seemingly contributing to expats’ decision to renounce. The vast majority of expats don’t feel their interests are fairly represented by the US government and continue to be frustrated by the obligations of citizenship-based taxation and the burdensome tax filing process.
This year’s survey once again reinforces the fact that only a small percentage of Americans abroad feel their needs are acknowledged and advocated for. That perception, plus the strain that comes with onerous expat tax obligations, makes renouncing citizenship a desirable option for many. Government leaders should be equally taking into account the interests of all Americans, regardless of where they’re currently living and working, not just because it’s the right thing to do— the expat voice is strong enough to sway an election. Those planning to run in 2020 would be smart to take note.– David McKeegan