It’s always been tough for Americans. Unlike citizens of Spain, Germany, Australia, Canada and virtually every other developed country, Americans have to pay income taxes to Uncle Sugar no matter where they live and what they do. An American can leave his country and spend the next fifty years making a living in Timbuktu and every April 15th his Owner wants a full accounting of what income he made and the account numbers of the banks that are holding the money. Above an arbitrary annual threshold, he is required to send the Treasury its cut of his labors. You know, taxation without representation.
As bad as that is, it’s getting worse. First of all, Senate Bill 1813 (which did not pass, but watch for new iterations soon) has a provision (Section 40304) that allows the IRS to inform the State Department that – in its sole opinion and without benefit of due process – a taxpayer is in arrears for $50,000 or more and a tax lien has been applied to his property. On the strength of that letter the State Department will deny or revoke a US citizen’s passport. No day in court. No conviction for tax evasion. You have business abroad? Family abroad? Too bad. In the words of the mobster Sonny from the movie A Bronx Tale, “Now youse can’t leave.”
Travel restriction based on tax law is something that harkens back to both the Soviet and Nazi regimes who used such laws to prevent what they deemed “educated” Jews from leaving the country at all or, in the case of the Nazis, without paying huge exit taxes. It’s the kind of thing you’d expect from a notoriously unjust and anti-human regime.
And speaking of exit taxes, while the United States used to uphold every global citizen’s right to emigrate without restriction via the Jackson-Vanik ammendment, it is now creating its own barriers for tax-paying Americans to exit.
For the last five years the number of American citizens renouncing their citizenship and leaving the country has been increasing. Last year about 1,700 people left. This month a high profile example entered the spotlight when Facebook co-founder Eduardo Saverin declared his desire to live and pay taxes in Singapore instead of the US. This, after he paid hundreds of millions in US taxes and helped create a 100-billion dollar company that has done much to connect the world in positive ways and employ thousands of Americans. Because the move could save him 67-million dollars in the future, a US senator declares, “This tax avoidance scheme is outrageous.” The senator says leaving the country is “a despicable trend.” Right. How dare Mr. Saverin leave the country with the senator’s money!
By the way, for non-Americans the US is the biggest tax haven in the world. Non-Americans living in the US only pay taxes on a fraction of their income, unlike the domestic milk cows. Nevertheless, Singapore’s tax haven – bad. America’s tax haven – good.
The predictable political response to productive people leaving the country is a new law that will confiscate 30% of the capital gain of any person with a net worth over two million or who has paid taxes averaging over $148,000 in the past five years. These are the fat milk cows. These are the guys the government wants to trap inside the country permanently.
And just to kick them in the groin, even if they pay the 30% and leave on completely legal terms they will be barred for life from ever returning to the United States. Barred for life from even visiting – we don’t even do that to convicted rapists and murders! So you can see what politicians really care about. You were a decorated military veteran? Too bad. You paid a hundred million in taxes while you were here? Too bad. We have to make an example of you so the other fat milk cows don’t get any ideas. That’s one way the US can keep the highest corporate income taxes in the world and still keep the party going – don’t let the milk cows out!
Perhaps the governors of high-tax states like California should make similar allegations about the outrageous and despicable Americans who move to Texas or Florida to avoid state income taxes. Ingrates! Traitors! You’re banned for life from returning to California!
And here’s another example of blatant overreach – under current law since 2008, after an American quits his citizenship he is required to pay US income taxes for an additional ten years even though he is not an American anymore and is, say, an Italian citizen living in Rome. Sure. That’s reasonable.
A lifetime of financial servitude to politicians under pain of prison or permanent banishment – that sounds like “The Land of the Free,” right?
FOLLOW PETE SISCO ON
YOUR SOCIAL MEDIA PAGES