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August 26, 2011 - Phil Hodgen

Citizenship is a problem to be solved

OK, all of you patriots. Carefully furl your American flags for a moment. Try to put on your scientist Ph.D hat and think dispassionately about expatriation. Look at what is happening with an open mind and say “Why is this occurring?” and “Why is that individual taking that action?” without jumping to a value judgment.

We do a lot of work with people who give up their permanent resident status or U.S. citizenship. There are a lot of tax hoops to jump through. I often describe the exit tax rules to a new client as if you decide to leave your wife/husband/girlfirend/boyfriend and the spurned significant other proceeds to throw all of your clothes into the front lawn and set fire to them. Hell hath no fury like a Congress scorned. Etc., etc. You have to go through the fire. You’ll live.

But I digress.

I read Hacker News and participate from time to time. I am username “philiphodgen” on Hacker News. Pro tip: if you want to browse Hackernews on your phone, use ihackernews.com. It formats well on an iPhone and on a BlackBerry. I know this from first-hand personal experience on both platforms. iHackernews sometimes breaks when you’re trying to read the comments for reasons beyond the power of its creator to control. But just try again in a little bit and it will work.

I digress. Again.

Through the HN firehose comes an interesting article with a new perspective on expatriation. The author’s thesis is that citizenship is a problem to be solved.

Put down your pitchforks. The point of the author writing an article like this is not to answer with “You’re right!” or “You’re wrong!” The point of the article — and discussing the ideas — is to explore the ideas. There are some important concepts here that transcend taxation, though tax is obviously a prime motivator.

Shipping companies use flags of convenience all the time. I suspect people will start to do this more and more. At the moment this practice is mostly visible with people like Rupert Murdoch. For him — and others like him — it is easy to put on ideological blinders and castigate him. Pointing to his use of citizenships is a convenient club to wield in order to attack him.

Don’t fall for the shallow, reflexive response. Be openminded. For this I commend you to a fine bit of reading, David Foster Wallace’s 2005 commencement address at Kenyon College. Oh, and don’t get me started on a nice little rant about copyright and IP and the “Reality Doesn’t Exist” world that publishers live in. Go see how someone clueless attempted to erase the commencement address from the face of the internet here. Then do a Google search for the commencement address. I think the publisher must have hired Barbara Streisand to enforce its intellectual property rights.

But I digress.

Expatriation