As the 2024 presidential election rematch between Joe Biden and Donald Trump looms, a notable trend continues: a sustained high number of Americans renouncing their citizenship. This act, once considered rare, has gained traction in recent years, driven by a myriad of factors, including political uncertainty, tax obligations, and global mobility.
The political climate during election cycles can influence individuals' motivations for renouncing US citizenship. Amidst heightened political polarization and policy uncertainties, some may view renunciation as a means to disassociate from specific political ideologies or policies. Understanding the interplay between political dynamics and renunciation motivations is essential for individuals seeking to align their decisions with their political beliefs and aspirations.
What the 2024 Presidential Election Means For Renunciation
The decision to renounce citizenship is a weighty one, often prompted by a complex interplay of personal and political considerations. For some, it's a means of escaping burdensome annual tax and information reporting requirements. For others, it's a statement of protest against perceived injustices or disagreements with government policies. We see clients who renounce for practical or political reasons, or a combination of reasons. A common thread is that individuals who choose to renounce U.S. citizenship feel more at home in another country and, if they plan to visit the United States in the future, only want the ability to do so for vacation or to see family and friends.
As with any election, the 2024 presidential contest between Biden and Trump could carry significant implications for those contemplating renunciation. The outcome of the election will likely shape policies on taxation, immigration, healthcare, and more, influencing the calculus of individuals evaluating their allegiance to the United States. We know for sure that which party wins both the presidency and control of Congress will determine how high the U.S. estate, gift, and generation-skipping tax “unified credit” is set after its temporary doubling sunsets at the end of 2025.
Biden vs Trump Tax Policies
To date, neither candidate has made any announcement about proposed changes to U.S. renunciation law, or U.S. citizenship-based taxation more broadly. The Biden administration in late 2023 proposed lowering the fee to renounce from $2,350 USD to $450 USD, but this change has not yet been implemented by the U.S. Department of State. Promises of tax reforms, immigration policies, and international relations strategies can sway the decisions of those considering renunciation. Consequently, the outcome of the election may either assuage concerns or exacerbate tensions, potentially accelerating the trend of renunciations. Potential renouncers looking for certainty may choose to do so sooner rather than later.
Bordera Tax and Immigration Law is a premier firm with a sound focus on cross-border tax issues for individuals, corporations, partnerships, and trusts. With offices in Calgary and Vancouver, our US lawyers and accountants assist clients worldwide in renouncing US citizenship, obtaining US visas, and expanding Canadian businesses into new US markets. We excel in voluntary disclosures, tax compliance, and dispute resolution with US and Canadian tax authorities. Our extensive knowledge in cross-border estates, trusts, and real estate investments enables us to optimise tax efficiency and safeguard clients' assets. We also offer guidance in Canadian departure tax planning. Trusted for our insight and experience, we have presented on cross-border tax topics to accounting firms, private wealth managers, and banks. Count on Bordera Tax and Immigration Law for top-tier advice and exceptional service.
