Ultrawealthy US citizens are denouncing citizenship in droves

Flight Air Traveling — REUTERS/Tim Wimborne

Ultrawealthy Americans are renouncing their citizenship in increasing numbers, according to Axios.
Insider previously reported that the ultrawealthy wanted to flee unrest and the pandemic.
President Joe Biden's proposed tax hikes on the wealthy may also be kickstarting plans to leave.
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More of America's wealthiest citizens don't want to be American anymore, according to new data compiled by Axios.

In 2020, according to IRS data, 6,707 Americans gave up their citizenships - a 237% increase from the prior year. It's particularly pronounced among some of the wealthiest, who have been leaving at more elevated rates since 2016 (with a noticeable dip in 2019).

As Insider previously reported, the US passport lost a big chunk of its value in 2020. Some of the reasons that the richest Americans wanted to flee? The handling of the pandemic, general social unrest, and, perhaps most importantly, the presidential election.

At the time, America's wealthiest were having a hard time finding a way out, even for vacation, since so many countries weren't allowing in Americans.

Nuri Katz, the founder of Apex Capital, a firm that specializes in citizenship by investment (CIP) programs, previously told Insider the wealthy had to adjust to not being able to travel for work or pleasure - leading to a desire to "diversify" passports.

Now, Axios reports, one concern propelling the wealthy out of the country might be taxes. President Joe Biden has proposed tax raises targeting the highest-earning in an effort to pay for infrastructure spending. Those include a 39.6% capital gains tax on Americans earning over $1 million, which would be levied in conjunction with a 3.8% Obamacare tax - resulting in a 43.4% capital gains tax, nearly double current levels.

A report from the Institute on Taxation and Economic Policy (ITEP) found that the top 1% of American taxpayers would shoulder the burden of Biden's proposed tax increases, each paying an extra $100,000 in taxes every year.

The status of those tax increases is still up in the air, since they didn't make it into the pay-fors for the latest bipartisan infrastructure bill. They could still show up in the party-line reconciliation bill being written by Democrats, but perhaps at not such elevated rates.

But, according to Axios, the prospective tax hikes might still be a dealbreaker for some wealthy Americans.

Read the original article on Business Insider