Liberals want our money. They want to make sure no one with money can escape. They are willing to write a bill that will close “loopholes,” including the loophole of renouncing U.S. citizenship to get away.
Among large nations, only the USA taxes its citizens who live outside the country. The only way to escape taxes is to give up your citizenship.
A man recently did this. He is an investor in Facebook. Before the IPO was announced, he gave up his citizenship and became a citizen of Singapore. That’s legal. There is no capital gains tax in Singapore.
Senator Church Schumer of New York and another Democrat Senator have introduced a bill: the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act. That’s a mouthful. It’s a mouthful with a purpose. The Senators are sending a message with a catchy acronym, the “Ex-Patriot” Act. Get it? If you give up your citizenship, you’re no longer a patriot.
Not only does it imposes taxes on anyone who does this, it forbids the person from ever entering the nation again.
This is right out of the short story millions of us were forced to read in high school: Nathan Hale’s “The Man Without a Country.” It was written in during the Civil War. It was published in The Atlantic in December 1863. It was about a man who was tried for treason in 1807, as part of Aaron Burr’s trial for treason. (In real life, Burr was acquitted.) He verbally says he hopes he will never hear about the United States again. The judge sentences him to life in prison on U.S. ships, transferred back and forth, mid-ocean. No one is to mention the USA to him again. He never sees family or friends again.
Schumer wants to get as close to that story’s sanction against treason as he can.
But renouncing citizenship is not treason. It’s legal. Not if Chuck Schumer gets his way, it will still be legal, but it won’t be tax-free.
But the capital gains tax isn’t 30% . . . not yet, anyway. So, the law will discriminate against this one form of tax planning.
That’s because it’s the worst form of tax planning from a liberal Democrat’s point of view: permanent tax relief from the IRS. This is an outrage in their view.
At a press conference, Schumer and Bob Casey of Pennsylvania specifically identified their target: Eduardo Saverin.
How much tax money is involved? $67 million. In a nation with an annual budget deficit of $1.2 trillion, this is peanuts. But, symbolically speaking, the two Democrats see it as an insult to the Internal Revenue Service. Such an insult is not to be tolerated.
The bill, if passed, will impose a 30% capital gains tax on anyone who renounces his citizenship.
In 2011, 1700 Americans renounced their citizenship: hardly a large number. But Schumer is not willing to let anyone get away. The long arm of the IRS extends across jurisdictions.