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France-based overseas Americans sue to restart citizenship renunciations

A group of overseas Americans sued the State Department on Monday to restart citizenship renunciation services, saying a suspension under the Covid-19 pandemic violated their fundamental rights.

The France-based Accidental Americans group
The France-based Accidental Americans group. Photo: Zakaria ABDELKAFI / AFP

The United States, with rare exceptions, grants citizenship to anyone born on its soil or with a US parent.

A 2010 law aimed largely at avoiding tax dodgers who move abroad has sharply increased the bureaucratic and financial burden for US citizens overseas, including those who may have only peripheral links with the United States.

“Most US citizens, especially those residing in the United States, cherish their citizenship,” said the lawsuit filed in the US District Court in Washington by the Association of Accidental Americans, a French non-profit group, and nine plaintiffs.

“However, for the nine million US citizens living abroad, recent legislation and regulations have transformed US citizenship into a financial nightmare,” it said.

READ ALSO How to renounce American citizenship (and why you might want to)

Fabien Lehagre, president of the France-based association, in a statement said that recent laws “have left accidential Americans with little choice but to renounce US citizenship.”

The group has an ongoing lawsuit to oppose the $2,350 fee to renounce citizenship – a service that was free until 2015 – as unfair and exorbitant.

In the latest lawsuit, the group said that a suspension of services at most US embassies overseas during the pandemic violated a fundamental right under the US Constitution to renounce citizenship.

“In other areas during the Covid-19 emergency, the federal government has found ways to accommodate citizens’ constitutional liberties, while protecting public health and well-being,” the lawsuit said.

“Just as the Covid-19 world has become more flexible, the US government must do the same.”

The lawsuit calls for the immediate resumption of renunciation services, saying that the shutdown violates the Fifth Amendment of the Constitution’s guarantee of due process.

Citing figures from the Internal Revenue Service, the lawsuit said that a record of more than 6,000 Americans renounced their citizenship in 2020.

The lawsuit said that the Foreign Account Tax Compliance Act has effectively made US citizens overseas pariahs, with some banks curtailing services for them due to the costs of meeting reporting regulations.

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POLITICS

Income tax, property grants and cigarettes: What’s in France’s 2023 budget?

France's finance minister has unveiled the government's financial plans for the next year, and says that his overall aim is to 'protect' households in France from inflation and rises in the cost of living - here's what he announced.

Income tax, property grants and cigarettes: What's in France's 2023 budget?

The 2023 Budget was formally presented to the Council of Ministers on Monday, before economy minister Bruno Le Maire announced the main details to the press. 

The budget must now be debated in parliament, and more details on certain packages will be revealed in the coming days, but here is the overview;

Inflation – two of the biggest measures to protect households from the rising cost of living had already been announced – gas and electricity prices will remain capped in 2023, albeit at the higher rate of 15 percent, while low-income households will get a €100-200 grant. The energy price cap is expected to cost the government €45 billion in 2023.

EXPLAINED: What your French energy bills will look like in 2023

Property renovations – the MaPrimeRenov scheme, which gives grants to householders for works that make their homes more energy-efficient, will be extended again into 2023, with a budget of €2.5 billion to distribute.

Income tax – the income tax scale will be indexed to inflation in 2023, so that workers who get a pay increase to cope with the rising cost of living don’t find themselves paying more income tax. “Disposable income after tax will remain the same for all households even if their salary increases,” reads the 2023 Budget.

Pay rises –  pay will increase for teachers, judges and other civil servants as inflation is forecast to reach 4.3 percent next year after 5.4 percent in 2022. Around €140 million is assigned to increase the salaries of non-teaching staff in schools. 

New jobs – nearly 11,000 more public employees will be hired, in a stark reversal of President Emmanuel Macron’s 2017 campaign promise to slash 120,000 public-sector jobs – 2,000 of these jobs will be in teaching. 

Small business help – firms with fewer than 10 employees and a turnover of less than €2 million will also benefit from the 15 percent price cap on energy bills in 2023. The finance ministry will put in place a simplified process for small businesses to claim this aid. In total €3 billion is available to help small businesses that are suffering because of rising costs. 

Refugees – In the context of the war in Ukraine, the government plans to finance 5,900 accommodation places for refugees and asylum seekers in various reception and emergency accommodation centres. The budget provides for a 6 percent increase in the “immigration, asylum and integration” budget.

Cigarettes – prime minister Elisabeth Borne had already announced that the price of cigarettes will rise “in line with inflation”.

Ministries – Le Maire also announced the budget allocation for the various ministries. The Labour ministry is the big winner with an increase of 42.8 percent compared to last year, coupled with the goal to reach full employment by 2027. Education gets an increase of €60.2 billion (or 6.5 percent more than in 2022), much of which will go on increasing teachers’ salaries, while the justice and environment ministries will also see increased budgets.

Conversely, there was a fall in spending for the finance ministry itself.

Borrowing –  the government will borrow a record €270 billion next year in order to finance the budget. “This is not a restrictive budget, nor an easy one – it’s a responsible and protective budget at a time of great uncertainties,” said Le Maire. 

The government is tabling on growth of one percent, a forecast Le Maire defended as “credible and pro-active” despite an estimate of just 0.5 percent GDP growth by the Bank of France, and 0.6 percent from economists at the OECD.

The public deficit is expected to reach five percent of GDP, as the EU has suspended the rules limiting deficit spending to three percent of GDP because of Russia’s war against Ukraine.

Parliament

The budget plans now need to be debated in parliament where they are likely to face fierce opposition. Emmanuel Macron’s centrist LREM party and its allies lost their majority in elections earlier this year.

Macron also plans to push ahead with a pension reform that would gradually start pushing up the official retirement age from 62 currently, setting up a standoff with unions and left-wing opposition parties.

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