An email from John Strohmeyer this morning made me laugh:
Important part
At a news conference this morning, Sens. Schumer and Bob Casey, D-Pa., will unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act to respond directly to Saverin’s move, which they dub a “scheme” that would “help him duck up to $67 million in taxes.”
Full article
Thoughts
- - I’m surprised it took them this long to introduce this.
- - Once we’ve managed to insulate ourselves from the rest of the world and its capital, THEN our economy will take off!
- - Perhaps if our system wasn’t such a nightmare, people wouldn’t want to leave.
Yes, John. It is a full-blown Moronathon on Capitol Hill. (PS: Senator Schumer is also a “D”. Not to say that the “R” people are sane. Not at all. I just need to point out that Sen. Schumer is a “D”. Also from New York. Wasn’t that the site of a world-famous stock market once upon a time?)
Reader comments (17)
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What are the odds of this passing and are we heading for a court fight?
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@Tim,
The odds are extremely low. Senator Schumer is someone who values publicity above all else because he wants to be re-elected.
I am not surprised about this proposed law — this is the equivalent of standing in the middle of the street, naked, while banging pots and pans together.
There are adults in Washington DC. They work in the Treasury Department, the Senate Finance Committee, the House Ways & Means Committee, and the Joint Committee on Taxation. They are not elected officials.
While they have ideological biases (they readily self-identify as D or R), they are also sane and understand the Law of Unintended Consequences. Usually their sanity trumps ideology (their own ideology as well as their masters’ ideology). Not always, but usually.
If you’ve ever seen the BBC sitcom “Yes, Minister” you have a sense of what I’m talking about. A great show, by the way.
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Phil,
You might want to check out the article below which is the first place I have seen any discussion of why the tax law was changed back in 2008.
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As the British would say the Senator has “thrown his teddy out of his pram.”
If he made headlines with real solutions to America’s problems, it might be time better spent. The good Senator needs a reality check about America’s place in the world post 2007 Financial Crisis.
Senator Schumer you are formally invited to the UK to talk to American ex-pats about US tax policy. Just leave a comment and your phone number on this blog and things can be arranged.
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It has nothing to do with “the economy taking off”. What a stupid straw man.
It’s about people leveraging the US to make all their money, and they avoiding paying their taxes when they do.
I hope they pass this and I hope half your tax-evading clients never get to step foot in the US again.
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RN
And what about citizenship-based taxation, which punishes 6 million long term ex-pats who have no representation in government and no access to government services?
When will the “good” Senators Schumer and Casey introduce a bill to abolish such a blatant violation of human rights?
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Poor angry RN… Of course he won’t stay around to learn anything, but sure likes to assert tax-evasion with no real knowledge. That’s what we are dealing with folks, is people like this that know little but assert alot.
Here RN, if you are interested in learning a bit more and open to other perspectives (maybe not) have a read about what the Economist has to say… http://econ.st/JDY4p6 Not that it will matter if you are pre-disposed to your opinion. Also this from the NYTs. http://nyti.ms/J0ZpTH and then some active discussion by a group of average middle class Expats… http://bit.ly/MoGMyU
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@RN – You’re new to the blog and it’s apparent you’re not an ex-pat. Have you ever left the US for years (not just tippy toed in Paris for a week and then proclaim to your drunken friends in a US getting eduacated on ESPN, “I’ve seen France”? You wouldn’t be making statements like that if you knew better.
Facebook would not be what it is unless the rest of the world took part in it. Facebook America wouldn’t be worth as much and certainly not as interesting.
RN this is all about the US in hard economic times, realising it’s losing its position of power in the world, other countries are equalising or surpassing the American standard of living, and homelanders still walking the streets chanting “we’re the most powerful nation in the world” wake up!
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There’s an old story, repeated by Aristotle. Civil strife broke out, and the losing side got put in jail. But the city needed tax revenue, so they agreed to let the prisoners expatriate. Here’s the moral of the story, “that they should be allowed to depart into exile on paying a sum of money to the state.” (Aristot. Econ. 2.1347b, you can read the full story here: http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%3A1999.01.0048%3Abook%3D2%3Asection%3D1347b)
The interesting thing to me, is that exit taxes have been around for a long time.
Also, I seem to recall somewhere in my memory that there’s a tax rule somewhere that says congress ought not to pass any law that specifically targets an individual? Might such a rule apply here in this situation?
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The proposed bill reeks heavily of Bill of Attainder and ex-post-facto law (violation of Article 1 Section 9 US CONST)
They are trying to go back retroactively on people who have already renounced, and capture capital gains going back 10 years? The rhetoric of the 2 senators involved seems like they are going after Saverin personally. The law would bar Saverin from the US for an act that he has already committed!
Phil, what is your “I’m not your lawyer, but my thought is…” constitutional interpretation here?
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“Phil, what is your “I’m not your lawyer, but my thought is…” constitutional interpretation here?”
For the current crowd in congress, constitution = doormat.
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Yep. The Nazis had the Reichsfluchtsteuer. Those Jews that were lucky enough to be able to flee Germany had to pay it.
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Yes, and that tax “Reichsfluchtsteuer” (literally: “tax to flee the realm”) was administered by Adolf Eichmann who fleeced whoever he could and later on the ones that were left and couldn’t pay were either worked to death, shot or gassed. The effect of FATCA on US persons abroad, shutting them out of business and employment oppourtunities and bank accounts is not unlike what happened to the Jews after the Nuerenberg laws in the mid 30′s. How can the US do this to its own people?
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Hmmm. Let’s not get out into Godwin’s Law territory here.
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Let me get this straight, so the AMT vig from all of the ISO owners wasn’t good enough so they have decided to go after their thumbs like in the “Pope of Greenwich Village”. Charliiiieeee they took my thumb, Chaluch.
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Yikes, people: Godwin’s Law!
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“For the current crowd in congress, constitution = doormat.”
Got THAT right!
We’ve got a president who has committed treason within the first year in office (UN Security Council Chief while president in office, clear violation of constitution, at the very least a high crime or misdemeanor), a presidential candidate that has already dropped out of the race who only now is sending a letter to Switzerland to renounce her Swiss citizenship that she should NOT have had in the first place because what if she actually WON and ended up Commander-in-Chief of the US military and a dual citizen? She would not be eligible to BE president should she have won the race . . . and ONLY AFTER it came to light AFTER she had dropped out of the race (Michelle Bachmann) is she doing this renouncing, and who knows what else going on?! The words “natural born” were put into the Constitution exactly to prevent someone with dual loyalties from becoming president. (By the way, I thought when you renounced citizenship you didn’t just send a LETTER but you returned the nation’s PASSPORT to said nation, which she has NOT mentioned doing.) And now it turns out that either Mr. Obama is a liar per a book bio that clearly states he was born in Kenya that he most likely approved to be printed–yes actually signed off on–or he is a cheat who doesn’t belong in office now . . . not that I’m a birther, but this is getting to be too much!
Don’t even get me started on a Treasury Secretary with a $40,000 debt to the IRS being considered for the job to be their boss in the first place (since IRS reports to Treasury), or the tacit walking of guns across the border and into the hands of the Mexican drug cartels who used one to kill a federal agent, approved by the head of the Dept. of Justice.
Do any of these people follow the RULES???
I’m starting to hear Leona Helmsley in the back of my mind! Remember her? “Taxes are for the little people.” Except in this case it’s not taxes, it’s “rules”.
Shoot, I’m starting to LIKE Bill “I did not have sex with that woman” Clinton! At least when he told his lies it was all about personal indiscretions and trying to shield his wife and daughter from the fallout! And he paid for it, with attacks from Al “Father of the Internet” Gore setting him up for the impeachment.
When are all these no good yahoos going to pay???
(Poor RN. When is he going to realize that Mr. Saverin actually raised his hand and volunteered to pay EXTRA by renouncing when he decided to “defriend” the USA and pony up the EXIT TAX money, $330 to $700 MILLION extra depending on how you count his shares, money that he could have avoided having to pay in full had he stayed a US citizen and took out loans secured by his shares instead of recognizing the full value of the shares at the day prior to his renunciation. And so far the smart money guys are saying FB is going DOWN in a few days, that the underwriters had to “make the market” by buying shares in order to maintain that $38 per share price, that it’s the only reason the IPO went “flat” as they call it instead of dropping off a cliff after the first hour or so of trading. When they’re gone, the market will revalue properly. I think Mr. Saverin is getting his payback for Mark Z trying to cut him out in the beginning and giving him the ultimate middle finger while watching the IPO burn, but hey . . . I’m an amateur and I don’t trade anymore. So I have no dog in this fight or pony in this race, as they say.