This kind of “denominator blindness” is a common failing of the reports that Americans are racing to escape from President Barack Obama or the prospect that Donald Trump will be the next president. To show how much this has been blown out of proportion, do an internet search for the phrase “Americans give up citizenship in record numbers.” It returns 39 million results in less than a second.
Some in the news media are guilty of making this into a much bigger issue than it is, again due to the way they present the numbers. Yes, it is technically accurate to say, as Forbes recently did, that “Americans renouncing U.S. citizenship has gone up, up 560% from its Bush administration high.” Yet, consider the longer term: Between 1962 and 2012, the numbers of American renouncing their citizenship typically ranged between 500 and 1,500 a year. The increases began after FATCA went into effect.
Let’s look closer at the actual numbers: 4,279 Americans gave up their citizenship in 2015 versus about 1,000 before the FATCA was adopted. That might seem like a big increase in raw numbers. However, note the actual percentages: Before the law, 0.011 percent of all Americans living overseas gave up their citizenship. That’s gone all the way up to 0.049 percent. Just as an aside: I am not adjusting for U.S. population growth from about 190 million 1960 to 320 million today.
Each year, an infinitesimal percent of all American expats renounce their citizenship. The percentage is even smaller in the context of the total U.S. population.
So don’t be fooled by changes in numerators that seem large. You need to consider the denominators to understand what’s going on.