In the last 20 years with the turmoil in the US Immigration system combined with the continual overreach of the US Government particularly in the areas of privacy and taxation, a debate exists in the mind of many Americans and foreigners alike as to whether US Citizenship is something worth pursuing or even renouncing (especially if living permanently overseas).
From a foreigners perspective a typical path to living permanently in the US might look something like this;
- Tourist / Student: via J-1 Visa Intern / Exchange Program / Work & Travel 0r F-1 Visa for University with OPT Work or B-1 Visa for Tourists / Visa Waiver ESTA
- Work Visa: H-1B Visa or E-3 Visa or O-1 Visa or L-1 Visa
- Permanent Residency: Green Card via EB-1 Visa / EB-2 Visa / EB-3 Visa
Now at this point after 5 years of holding Green Card, a foreign national would be eligible to apply for US Citizenship. There are some other criteria that need to be met like continuous residence, a naturalization test, language competence, etc. Also to note for Green Card holders who have married US Citizens the eligibility period is only 3 years and there is also special conditions for those who are eligible via US Military service.
However increasingly many foreigners who get to the Green Card stage are not continuing any further in their US Immigration journey. Currently there are about 8.8 million people who hold Permanent Residency status in the US who have not gone any further. This equates to about 3% of the entire population of the US and to put that into perspective, this group alone could change the outcome of all major US election results around the country. Considering that this one of the biggest things gained by going from Permanent Residency to US Citizenship, this is quite compelling.
To delve deeper let us document the major issues that people face when deciding about US Citizenship;
- Giving Up Native Culture – Some foreigners genuinely feel if they take the oath of allegiance and other steps to becoming a US Citizen they are in essence giving up their tie to their country of birth / ethnicity. They feel that the stage of a Permanent Resident which conveys upon then the almost uninhibited right to live and function in the US along with their paying of taxes and respecting local culture is all they need
- Giving Up Passport – Some countries like China and India amongst others don’t allow dual nationality so if you become a US Citizen and thus attain a US Passport, their original passport will become invalid potentially making their ability to travel to their original home more difficult and costly. Additionally it would mean not being able to vote in any elections or participate in other civic events where applicable in their country of origin.
- Taxation – It is the obligation of a US Citizen to file a tax return every year with the IRS regardless of where they are living and earning an income. Additionally in most cases (a few countries like Australia have a tax treaty with the US recognizing tax obligations paid in each other’s countries as paid in full) if the income tax rate of the country a US Citizen is residing in and work in is lower than the equivalent US tax rate, then the difference has to be paid to the IRS. The IRS is also becoming ever more vigilant on foreign account holdings and reporting. Facebook co-founder, Eduardo Saverin, originally a Brazilian national who became a US Citizen but now lives in Singapore (enjoying their relatively low tax rates) famously recently gave up his US Citizenship because of the taxation requirements.
- Voting – The most talked about right gained is the ability to vote in local, state and federal elections (although some jurisdictions like New York City are considering all residents the ability to vote in local elections). Given foreign nations are usually ignored and adversely affected by laws due to their lack of a voting voice, the chance to be able to influence Presidential races and US Immigration reform can be compelling.
- Elected Office – While the rules differ in different cities, states and nationally and for the type of office, becoming a US Citizen will allow you to run for public office. The most celebrated case of this is where naturalized American, Arnold Schwarzenegger became Governor of California. However the office of the President is still reserved for natural born US Citizens.
- Fees – Many Foreigners have spent years and decades spending tens of thousands to hundreds of thousands of dollars on immigration, legal, processing, US Consular, travel, logistic and other fees not to mention countless hours of lost time, earnings, productivity and social time for themselves and family in their US Immigration journey. Once they finally get to Permanent Residency stage they feel that for the first time they can function largely without anymore costs or onerous obligations to live a regular life in US. Given additional fees and time and process is required to become a US Citizen it is a stage many feel is just too much money
- Land & Business Ownership – Some countries like China in addition to being strict about dual nationality and passports, they are also very strict about foreign real estate and business ownership or at least ownership in certain sectors like Media, Defense and Infrastructure. Therefore if a foreign national already has these ownership interests in their country of origin, they may have to give this up to be a US Citizen. The US also has some restrictions in terms of foreign and US holdings for certain sectors.
- Travel – A US Passport from US Citizenship is a valuable thing to have for a freer and less costly travel experience with visas, etc. than many other passports particularly from Eastern Europe, Asia, South America and Africa. Therefore a regular traveler for business or pleasure might prefer to have the US passport even if it compromises other desires. However those with passports like EU Nations, UK, Australia, New Zealand and Canada gain nothing from a US passport that their own passports don’t already give them from a travel perspective other than possibly the greater number of US Consulates and Embassies around the globe.
1 thought on “Become a US Citizen vs. Staying on Green Card”
Just trying to find out what payroll taxes to withhold from an E-3 visa holder.