The NYTimes Headline shouts out:

More American Expatriates Give Up Citizenship

WASHINGTON — Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.

The trouble?

It’s a fake headline. If you bother to read down, you find

The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.

This is twice the number that “gave up” their citizenship the year before. Oh, horrors. A TREND!

Nonsense.

But the article is actually interesting: because the rest of the article is about tax law and banking law.

These are both real problems for those of us who live overseas. (My husband and I retired to his native Philippines and live here now).

You probably guessed that those of us collecting social security and pensions from the US have to pay income tax on our “income”. But did you know that we also have to pay income tax on any money we earn overseas?

American expats have long complained that the United States is the only industrialized country to tax citizens on income earned abroad, even when they are taxed in their country of residence, though they are allowed to exclude their first $91,400 in foreign-earned income.

That never bothered us:  the small veteran’s pension my husband receives from the Philippine government doesn’t approach that level.

Other reasons folks live overseas include marriage to a non American, studying abroad, working for a US government or company or multinational company, and because it’s cheaper to live overseas on a smaller income if one is retired. In the Philippines, many people retire here because they are married to Filipinas, are retired military and know the beauty of the country, or like us, “Balikbayans”, returning home to live.

But many jobs with big corporations do pay higher wages to their employees, so they are expected to pay double taxes on their income.

But if you read the entire article,  this is the worrisome part:

Stringent new banking regulations — aimed both at curbing tax evasion and, under the Patriot Act, preventing money from flowing to terrorist groups — have inadvertently made it harder for some expats to keep bank accounts in the United States and in some cases abroad.

Some U.S.-based banks have closed expats’ accounts because of difficulty in certifying that the holders still maintain U.S. addresses, as required by a Patriot Act provision.

We keep the address of our children in the US as our “US address”, but what of those who don’t have relatives there, or whose children are on the move?

The advantage of a US passport is that you can usually travel anywhere, and have the protection of the US Embassy in times of trouble. Once, when I was a missionary in Africa, the embassy helped me get out during a time of trouble, so it is worth it.

Of course, the Embassy hasn’t helped us much getting those behind the murder of our nephew, a US citizen, because they saw the murder as a normal crime, not a hit job by one politician on his rival’s family that killed our nephew because he was with them when the killers struck.

Is it worth the taxes you pay? Again, it depends.

If you live and work in a European country, and have another passport because you are married to a Brit, or a German, giving up a passport is no problem. But for the rest of us, it is worth the effort to keep our passports intact.

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Nancy Reyes is a retired physician living in the rural Philippines. She blogs at Finest Kind Clinic and Fishmarket.

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