Why more and more U.S. citizens are giving up their passports

The United States is one of only two countries in the world that has citizenship-based taxation (the other is Eritrea). As a US citizen you must file a tax return, no matter where you live, and often pay US taxes on top of the tax you already pay in your country of residence - so-called double taxation. This has been the case since the Civil War and until recently really only affected the rich. Americans abroad are given a yearly allowance of $106,000 (£73,000) before double taxation kicks in. But Fatca expands the scope of what can be taxed, and places a burden on foreign banks to identify US citizens among their customers to US tax authorities. The penalty for failing to do so can be as high as 30% of all a bank's dealings with the USA.