What's an 'Economic Patriot' to Do About the Surge of Expats Renouncing U.S. Citizenship?
President Obama and friends have been on a tear recently about corporations moving their headquarters overseas to friendlier tax climates. The White House even featured a cartoonish 19th-century fat cat on its Website while the president wrapped himself in "economic patriotism" to denounce "corporate deserters." He fulminated, "Even as corporate profits are higher than ever, there's a small but growing group of big corporations that are fleeing the country to get out of paying taxes."
Leave aside the accuracy of that statement (the U.S. has burdensome business taxes compared to most other developed countries). Not all the "deserters" are incorporated. This week, the Department of the Treasury released quarterly figures on Americans who renounce their citizenship, and the number keeps climbing. As tax attorney Andrew Mitchel points out:
The number of published expatriates for the quarter was 576. The number of published expatriates for the first half of 2014 has been 1,577 (1,001 + 576). Last year there was a record setting 2,999 published expatriates.
And, once again, taxes are very likely the driving force behind people waving bye-bye to the good old U.S. of A. Last year, McClatchy reported on a "new tax law driving expats to renounce U.S. citizenship." The Foreign Account Tax Compliance Act doubles down on this country's already nearly unique practice of taxing its citizens' income even when they live overseas by imposing intrusive reporting requirements not only on Americans, but even on the foreign financial institutions that do business with them. The U.S. government strong-armed many foreign governments into accepting and enforcing the rules.
Not surprisingly, rather than become clerks for U.S. government officials, many financial institutions around the world now refuse to do business with Americans. Which can be a tad awkward for people holding U.S passports and living overseas, but cut off from the ability to so much as open a savings account.
And suddenly we have a rising tide of citizenship renunciations. That's U.S. tax policy at your service.
Individuals fleeing the punitive U.S. tax system find themselves the recipients of politicians' wrath, just as corporations do. When Eduardo Saverin of Facebook fame renounced his citizenship, Sen. Charles Schumer (D-NY) sputtered, "Mr. Saverin has decided to 'defriend' the United States of America just to avoid paying his taxes. We aren't going to let him get away with it so easily."
Schumer even wanted to bar such "deserters" from ever again visiting the U.S.
If you won't be his friend, he won't let you play with any of his friends ever again.
That's economic patriotism: a temper tantrum in place of rational thought. Because thought might require you to realize that your bad behavior drives people away.
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You may be wrong Tuccile. I wonder if all this huffing and puffing isn’t meant to grease the skids for raising more taxes off foreign corporations period.
If they can tax foreigners then the foreigners will be forced to waste millions on lobbying and donating.
I move that we strip the citizenship of anyone currently working at the IRS, or who formerly worked at or for the IRS, along with any politician who ever voted in favor of a spending or tax increase, then begin deporting them to Laos.
What did Laos ever do to you to deserve that?
My brother caught an STD from a stripper when he was stationed there. Is that enough?
For them to deserve having to take the entire staff of the IRS into their country? I’m thinking they have already suffered enough, that’s inhumane.
Yeah, probably. Idiot should have worn a condom anyway.
Indeed. The Laotians are really nice people. I’d hate from them to be subjected to the attentions of US politicians again. US politicians already dropped more tons of high explosive on Laos during the Vietnam War than they did on Japan and Europe in WW II. Subjecting them to IRS is just gross; they have much better tax regime under their communist government (seriously).
I think Ebola-ridden Liberia would be a more appropriate place of exile. US politicians and IRS could share their wisdom with the Liberians, and the Liberians could share their Ebola. Quality of government would improve in both countries. Win-win.
I like the way you think.
All right I second Cato’s motion that the deportation target be Liberia instead.
Even better, let’s send them to Afghanistan and give them weapons to battle ISIS.
I’m going to go with Liberia. If the likely outcome is going to be death, these bastards do not deserve the quick method afforded by being shot.
Afghanistan to fight ISIL?
I like the Liberia option!
Nah. IRS should get a chance to manage Liberian suffering. We’ll send our highly trained brave heroes in blue who have demonstrated such tactical brilliance at puppycide to battle the ISIS forces. ISIS will never stand a chance.
If by “deporting” you mean “dropping them from airplanes at 30,00 feet without a parachute”, count me in.
I gather there were a lot of people waiting on the outcome of the presidential election before making their decision.
The progs promise that if Rand gets elected, they will all move to Canada or Europe before Rand imprisons all the gays and gives giant tax breaks to evul corporashuns.
Didn’t they all promise that if BOOOOSH won in 2004?
Yes, but they REALLY mean it this time.
This one is obvious. We hurry up and build that giant fence that McCain wants with a one way door, only going in. Hotel Cali, only with moar revenues.
I hate the fucking Eagles, man.
And just imagine, with the fence you can never get rid of them. Before, maybe there was a chance they would have moved to China or something.
Well, most of the Eagles are getting old, so they’ll die off pretty soon anyway.
Shika Dalmia likes this
I’ve heard this “patriotic” nonsense from lots of those who used to think that dissent was patriotic. Now I just ask them “Why are
business taxes so much higher in the U.S. than in these other countries? The solution to this ‘crisis’ seems obvious.”
You know who else questioned the patriotism of his fellow citizens?
Admiral Charles Fitzgerald and Mrs Humphrey Ward?
Woodrow Wilson?
Was it Jesus?
A few drone strikes will put the citizens back into place.
Looks like we’ll just need to tax the ones that stay even moar. That’ll keep em in line.
Unexpected unforeseen results once again flowing smoothly from horrendous laws and regulations.
I have a difficult time believing that their tax policies are generating anything but the revenues and social changes they intended. People don’t change their behaviors because of government policies in any way other than what the central plan devised.
I was accidentally listening to some dimwits on the morning radio this morning, because I got in traffic and couldn’t switch the channel again. Well, I could have, but for some reason, I listen to this stuff just like I do NPR sometimes. It’s like a trainwreck of stupid that you can’t stop looking at, or in this case, listening to.
So apparently, the redlight camera operation was suspended because of too many false positives and too many irate citizen complaints. So now, the city haz a sad because lost revenue. So these dimwits on the radio, you know the ones with adolescent like voices that sound like they’re always all jazzed up on caffeine? They were trying to have a discussion about what the city needs to do to make up for the lost revenue. Not one of the dimwits questioned the need for moar revenue or even mentioned corruption, but tried to come up with other ways to fine people.
Well, yeah. I mean, government is us. We The People and all that. So that money is ours. It’s ours dammit. Depriving the city government of revenue is depriving the people of revenue because it’s a government Of, By, And For The People.
NEEDZ MOAR BORDER ENFORCEMENTS
The hoarders are getting away.
Saverin wasn’t born in the U.S., he spent most of his childhood in another country and hadn’t lived in the U.S. for a couple of years before “deserting”. A large part of his wealth came from transactions in other countries. He is the poster boy of the new international business elite. They owe no emotional or real allegiance to any particular government and can live the good life in one of dozens of friendly climes. Obviously, they must be exterminated or house broken.
They would probably swear allegiance to whatever country is interested in protecting property rights and contract rights.
Once upon a time it was US. Now they have to shop around for the best bad deal.
True. Sad…but true.
I wonder if there is a single CEO in the country with the balls to say, “President Obama can kiss my ass. I don’t work for him.” when asked directly about this in an interview.
I would immediately buy his product.
A reverse boycott. We vow to buy products from businesses who speak out against government.
Everyday I buy a new industrial size jug of petroleum jelly to support the KOCHTOPUS.
The guy that works the late shift at Rite Aid can’t make eye contact with me anymore.
I just put gas in my car. It’s more useful (well for me anyway, what you do with Vaseline is your business) and less confusing to others.
when asked directly about this in an interview
Breath. Don’t Hold.
Is there anything that President Not My Fault says that ISN’T a complete and total lie?
Obama Aides Let Delphi Use Tax Tactic President Assails
President Barack Obama says U.S. corporations that adopt foreign addresses to avoid taxes are unpatriotic. His own administration helped one $20 billion American company do just that.
As part of the bailout of the auto industry in 2009, Obama’s Treasury Department authorized spending $1.7 billion of government funds to get a bankrupt Michigan parts-maker back on its feet — as a British company. While executives continue to run Delphi Automotive Plc (DLPH) from a Detroit suburb, the paper headquarters in England potentially reduces the company’s U.S. tax bill by as much as $110 million a year.
And, honestly, all I can say about that is good for them. The same standard should apply across the board.
And it’s not from FOX, so the lefties won’t have that excuse.
And now they’re trying to rescind their actions. I think that’s called retroactive law enforcement. “When we encouraged you to do this, it was legal. Now it’s politically expedient to make it illegal, so we’re going to punish you because we changed the law.”
Yeah, there’s no way that could make companies think twice about expanding or starting businesses in the U.S.
Even as corporate profits are higher than ever
Which is relevant, because that means their taxes go down, so, I mean, c’mon, greedy bastards.
Oh, that’s not how it works. then, ummmm…just shut up and fork over the wallet.
Anyone want to bet how long it takes before they start proposing a wall to prevent economic desertion?
We could call it the Berlin Wall! Has a nice ring to it, doncha think?
Kind of my thinking. I really don’t know why people don’t see how closely the administration’s logic resembles Honeker’s and the E. Germans’.
Great Wall of Obama?
It would be nice to have them explain how the “we built duh ROADZ” rationale applies to people who live and work in foreign countries.
I’ll give you a hint:
Starts with F. Ends with W.
Son, we live in a world that has roads, and those roads have to be built by men with Ivy League degrees. Who’s gonna do it? You? You, David Koch? I have a greater responsibility than you could possibly fathom.
You weep for the economy, and you curse the IRS. You have that luxury. You have the luxury of not knowing what I know. That high taxes, while economically tragic, probably saved public sector jobs. And my existence, while grotesque and incomprehensible to you, saves public sector jobs. You don’t want the truth because deep down in places you don’t talk about at cosmotarian cocktail parties, you want me building those roads, you need me building those roads.
We use words like social justice, infrastructure, economic patriotism. We use these words as the backbone of a life spent defending stealing. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the infrastructure that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way, Otherwise, I suggest you pay up your union dues, and stand around on the side of the road pretending to work. Either way, I don’t give a damn what you think you are entitled to.
Do you have a newsletter or blog?
Are you running in two years?
Well done.
We use these words as the backbone of a life spent defending stealing.
Change “stealing” to “theft” for better flow. Otherwise, extremely well done.
When you see these words on the plinth of a monument, you will know that the battle is irrevocably lost.
I’d like to see the numbers for the record profit claims and to see how they’re calculating it.
My prediction: “profit” is defined as how much cash companies are holding. Companies (and individuals) are holding so much cash because the economy and political environment are incredibly unstable and don’t know where to invest the money where there isn’t a high probability of it being lost.
Guess who makes the economy and political environment unstable? Government regulation and a terrible economic and foreign policy.
The Real Reason that companies are holding their money is not because of the people in office. Business has never ever been scared of taxes or regulations when there is a way to make money.
If there’s a way to make money, businesses move on it. They are not timid to regulations or tax.
So, why hold cash? The ugly truth is the slow-down of consumership. Businesses don’t see the DEMAND and don’t see an upside in expanding (spending money and hiring).
People are watching every dime. People are not spending as much. People are cutting down on vacation.
The dumb people with the loose money lost it. The smart money is staying close.
If there’s a way to make money, businesses move on it. They are not timid to regulations or tax.
Most businesses aren’t run by retards. They understand that higher taxes mean less pay offs on investment, and more regs mean less chance of investments paying off, and a greater chance of being fucked over in the meantime.
The ugly truth is the slow-down of consumership.
If everyone would just spend all of their money we would all be rich.
:
We need to spend and save.
I have read that the record-setting corporate profits are approaching a staggering $2 trillion. Meanwhile, our Federal government must impose austerity measures and continue to slash an already woefully under-funded budget to a mere $3.9 trillion. How can corporate fatcats posssibly justify being so greedy as to withhold a small portion of their enormous profits to a starving government?
When Eduardo Saverin of Facebook fame renounced his citizenship, Sen. Charles Schumer (D-NY) sputtered, “Mr. Saverin has decided to ‘defriend’ the United States of America just to avoid paying his taxes. We aren’t going to let him get away with it so easily.”
Any relation to The Herc?
Change the Tax code.
Unfortunately, the 1% will not like this, but perhaps the rest of us can vote it in:
1. FLAT Tax for EVERYONE (rich, middle, poor)
2. No Exemptions, no Deductions, no credits, shelters, no nothing
3. Elimiate the distinction between Captial Gains/Earned Income. Tax EVERYTHING
4. Impose a zero percent Corporate Income Tax on Any company that has no international presence. That is, hires no one from outside of the USA and IMPORTS NOTHING from outside of the USA. Companies that hire and use American Resources can pay ZERO % in Corporate Income taxes.
5. Eliminate Sales Taxes and Property Taxes and all other taxes. ONLY INCOME TAX at the PERSONAL LEVEL and Corporate Tax (at the same rate as Personal Tax) for Multi-national Corporations.
6. Eliminate Cash. Implement a national checking account for all those legal in the USA with the FED. All Payroll and money transfers and purchases occur in this account.
7. Nationalize WiFi. Forget the phone company and their nickle/dime. The High Speed Internet is the ROAD.
Does the phrase “incoherent rant” mean anything to you, Alice?
It was a wild journey, going from “change the tax code” to “eliminate cash” and “nationalize wifi.”
The Xanax kicked in after the dope.
Nationalize Alice’s drug collection. I want me some of that.
It was just a few pointers or suggestions that might help.
‘
But in America, here are the responses to my points:
1. FLAT Tax for EVERYONE (rich, middle, poor)
Who invented the complex tax code? The poor? the Factory worker? Or, was it the Rich guy’s accountant that the rich guy put into office? So, don’t expect a transparent flat tax.
2. No Exemptions, no Deductions, no credits, shelters, no nothing
see my reply for #1
3. Elimiate the distinction between Captial Gains/Earned Income. Tax EVERYTHING
see my reply for #1
4. Impose a zero percent Corporate Income Tax on Any company that has no international presence. That is, hires no one from outside of the USA and IMPORTS NOTHING from outside of the USA. Companies that hire and use American Resources can pay ZERO % in Corporate Income taxes.
see my reply for #1
5. Eliminate Sales Taxes and Property Taxes and all other taxes. ONLY INCOME TAX at the PERSONAL LEVEL and Corporate Tax (at the same rate as Personal Tax) for Multi-national Corporations.
see my reply for #1
6. Eliminate Cash. Implement a national checking account for all those legal in the USA with the FED. All Payroll and money transfers and purchases occur in this account.
The last people want is accountability. They want secrecy so to hide and steal.
7. Nationalize WiFi. Forget the phone company and their nickle/dime. The High Speed Internet is the ROAD.
I guess I’m a communist.
I was with you until part way into #4. If you are going to tax capital gains like other income, no corporate income tax at all. Otherwise it’s double taxation for investors.
I’d rather eliminate all income tax and have something else. Income tax requires too much personal information to be divulged.
Eliminating cash is terrifying if the government is still in charge of currency. I could see eliminating cash in favor of something more like Bitcoin that doesn’t put lots of personal information in the hands of the government.
#7 is just some kind of commie BS.
I believe this would be more convincing if you used ALL-CAPS. Nothing persuades like big letters.
Alice Bowie|8.8.14 @ 2:10PM|#
“Change the Tax code.
Unfortunately, the 1% will not like this, but perhaps the rest of us can vote it in:”
Yes, alice, I’m sure someone said that was very clever.
They lied.
Companies (and individuals) are holding so much cash because the economy and political environment are incredibly unstable and don’t know where to invest the money where there isn’t a high probability of it being lost.
The economy is grossly distorted. The Federal Reserve has intentionally destroyed the price signals in the market for money, and made calculating real returns difficult (at best).
Holy fuck you’re stupid, Alice.
I’m not stupid, you just don’t agree with me.
It’s probably both.
That can be true too.
But People just disagree with me and call me names.
No, I called your statement a name – incoherent rant. I try not to call people names unless I’m trying to get their attention in a crowded room.
When someone brings up the roadz argument, try something along this line: You do realize that the government pays for those roadz with fuel taxes, don’t you? And who do you think pays more fuel tax – you with your Prius driving 10,000 miles a year or the business owner whose fleet of trucks average well over 100,000 miles a year? So, it’s the business that’s subsidizing your driving, not the other way around.
Then stand back and marvel at the uncomprehending face followed by an irrational act of anger that will result. It won’t do any good; they won’t learn anything and you could get hurt. But, it will be worth it just for the good laugh and the smug feeling of superiority. (I’m really quite shallow.)
That is lame. We
ve heard that argument. It’s taxes. Call it whatever tax you want. It’s taxes and we collectively paid for the road.
I’m very confused here. Is Alice 3 different people, is it just blindingly incoherent in a way that puts buttplug to shame, is it on drugs, does it need to be on drugs?
Probably the quality of drugs he can afford. He’s a big rock star and he makes a lot of money.
No, seriously, he owns apartment buildings and shopping centers.
That’s Jethro Tull.
I thought he invented some sort of agricultural implement.
antisocial-ist|8.8.14 @ 2:33PM|#
“I’m very confused here. Is Alice 3 different people, is it just blindingly incoherent in a way that puts buttplug to shame, is it on drugs, does it need to be on drugs?”
Alice has admitted he only shows up to troll. He has no actual principles as far as any of his posts show.
You might just as well presume an honest exchange with your 3-YO nephew.
Didn’t some dead English guy say that patriotism is the last refuge of a scoundrel? I wonder if that holds true for “economic patriotism.” Also, just when did forking over whatever Washington asks for without asking questions become “patriotic”? Didn’t some dead Virginian say something about “No taxation without representation”? And wouldn’t representation entail listening to people when they protest tax policy, rather than calling them names? Just wondering.
It really isn’t as big a deal as people are making it out to be. 6000 wealthy tax and penalty avoiders, who chose not to take advantage of the IRS’s ‘grace period’ to own up (as Mitt Romney is supposed to have done, which is why he wouldn’t furnish his taxes the story goes), out of a population in excess of 316 Million is really nothing. In fact, as these people renounce citizenship, it isn’t a free ride, there are heavy costs associated with it. (Look up “Exit Taxes”, which affects Green Card holders as well as US citizens), and even if they scoot owing taxes and penalties, we can still sue in their new country of residence, if the IRS finds moneys owed.
But, also, as these people exit, more foreigners than those leaving are entering the US under the HE-5 program, which fast tracks Green Cards for foreigners that intend to build or buy a business in the US in excess of $500,000.
In essence, this is a non-story in the same light as the hullabaloo over fraudulent votes.
Problem: The Rich pay all of the taxes and make this country work. When they leave, everything falls apart.
Here’s why renunciations of American nationality are on the rise.
American expatriates have to file a 1040 every year, for the rest of their lives. More and more countries have signed agreements, pursuant to FATCA, that require their financial firms to reveal which of their clients are American citizens. For the first time ever, the enforcement of the stipulation in the first sentence above has teeth. An adult child of an American citizen, a child who has never set foot in the USA and has no USA sourced income, is required to file a 1040. This is ludicrous.
Another thing. Some foreign banks, insurance companies, and mutual funds are beginning to decline doing business with Americans. Some are even closing the accounts of Americans.
Americans who have more than US$10K invested in foreign financial firms have to reveal to the Treasury Dept. the maximum level of each and every account they have in a foreign financial institution. This law grossly violates the financial privacy of legitimate USA expats.
It’s not that American taxes are annoyingly high. They are in fact pleasantly low. Expat Americans own no tax at all on the first US$100k of wages. The income taxes foreign governments withhold on foreign dividends and interest often more than equal their US tax liability. An exception is Social Security, which is often untaxed under US law, but can be fully taxable under foreign law.