This article appeared today in the American Thinker: No Civilized Country Would Ever Banish Eduardo Saverin, by Peter W. Dunn
The Ex-Patriot Act introduced by Senators Chuck Schumer and Bob Casey is a bill of attainder which would result in cruel and unusual punishment.
Eduardo Saverin’s renunciation of U.S. citizenship has angered many people in the United States. I write as one who has also relinquished U.S. citizenship. As a blogger who openly writes about the experience, I’ve attracted some media attention, including an article by Dow Jones columnist Al Lewis. Lewis starts by saying that I renounced my citizenship to avoid the IRS. So now, Saverin and I have joined the ranks of the most hated people in America — so much so that Senators Chuck Schumer and Bob Casey want to banish the likes of us from the United States forever. To that end, they have proposed a new law, the Ex-Patriot Act. But would such treatment of former citizens be in accordance with the rule of law? I would like to argue that it would be a bill of attainder, forbidden by the US Constitution.
The late Chief Justice Rehnquist explains a bill of attainder as follows (emphasis mine):
These clauses of the Constitution are not of the broad, general nature of the Due Process Clause, but refer to rather precise legal terms which had a meaning under English law at the time the Constitution was adopted. A bill of attainder was a legislative act that singled out one or more persons and imposed punishment on them, without benefit of trial. Such actions were regarded as odious by the framers of the Constitution because it was the traditional role of a court, judging an individual case, to impose punishment.
The United States already has the rarely enforced Reed Amendment, which imposes exile and ten years of taxation on those who expatriate to avoid U.S. taxation. Senators Bob Casey and Chuck Schumer want to harden this law with the “Ex-Patriot Act”; it will exile any wealthy person who relinquishes citizenship to avoid taxation, and it will single such people out for special treatment as compared to other non-resident aliens. Here are some of the tax details:
Any ex-pat with either a net worth of over $2 million, or an average income tax liability of at least $148,000 over the last five years, “will be presumed to have renounced their citizenship for tax avoidance purposes.” The ex-pat will have to demonstrate to the IRS that this is not the case if it is not. If there is a “legitimate reason” for that person living outside the U.S. no penalties will apply. But if the IRS finds that someone gave up their passport for tax purposes, they will impose a tax on that individual’s investment gains “no matter where he or she resides.”
The rate of that capital gains tax will be 30 percent — the same that non-resident aliens currently pay on dividends and interest earnings. The tax detailed [in] this act, if approved, will backdate for 10 years after its approval.
Now the Constitution absolutely prohibits ex post facto laws. But these illustrious senators also have no grasp of history. Historically, banishment is a form of punishment. Permanent exile is a vicious and vindictive form of punishment often exacted in lieu of execution. But what for? Eduardo Saverin has only exercised a fundamental human right. Thus, far from committing a crime, he and I have done nothing wrong except to assert our right to leave the United States to avoid extra-territorial tyranny in the form of tax and bank account filing requirements; this is not so different from the thirteen colonies fighting a war against the mother country to avoid taxation without representation and whole host of other abuses.
This Ex-Patriot Act and the Reed Amendment are thus bills of attainder, which apply punishment and the seizure of a person’s of wealth without the benefit of a criminal trial. Banishment is terrible and inhumane; it is in principle a violation of the Eighth Amendment, which permits no cruel and unusual punishment. Even Professor Bruce Ackerman at Yale Law, who called for banning Saverin in the LA Times, understands this and would therefore allow an exception for those who would need to visit a family member who is dying or in hospital.
Exile is torture, and torture is universally condemned around the world. The Ex-Patriot Act would permanently separate persons from their heritage and their families — children from parents, brothers from sisters, nieces and nephews from beloved aunts and uncles. It tears people away from communities and friends. Exile would destroy their lives. It is psychological warfare, condemning people to years of regret, bitterness, and rage. Saverin is lucky to be originally from Brazil. But many thousands of those who have relinquished and will relinquish citizenship are citizens by birth and have loved ones still living in the United States.
Exile also punishes those who remain in the country who may never again see their loved one, unless they are able to travel to see him or her in exile. What if my father, an octogenarian, were to fall sick, and I couldn’t visit him? Whom are Schumer and Casey punishing now? Both me and my father. But it is wrong to punish people without a trial. This has been the case since laws were first invented. No truly civilized country ever punishes people without the benefit of a trial and the right to defend themselves before an impartial jury. This is why bills of attainder are odious. Schumer and Casey, however, must know that such a punishment could hardly pass the scrutiny of jurisprudence, and so it is better only to allow a hearing rather than bringing criminal charges and requiring the involvement of the Justice Department, grand juries, petite juries, and media attention. No, let the law declare the expats guilty. Let the law itself banish them. I.e., it is indeed a bill of attainder.
The United States must not ban persons who would normally have permission to enter the country lawfully as a visitor or on a visa. The United States must treat former citizens in the same way as all other people from their country of citizenship. Other Canadians may visit the United States for up to six months without a visa. To single out former U.S. citizens for special treatment is vicious and vindictive, and it is not becoming of a constitutional democracy. I cite the Expatriation Act of 1868, which shows that the United States expects other countries to treat its naturalized citizens with fairness and respect:
And be it further enacted, That all naturalized citizens of the United States, while in foreign states, shall be entitled to, and shall receive from this government, the same protection of persons and property that is accorded to native-born citizens in like situations and circumstances.
The principle of reciprocity requires that the United States treat other nations’ naturalized citizens in the same manner as native-born citizens of their countries. As the Apostle Paul says, “You then who teach others, will you not teach yourself?” To punish ex-Americans would also be a violation of the Universal Declaration of Human Rights (Article 15, 2): “No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.”
The problem with many lawmakers in the United States is that they don’t understand the first thing about freedom, justice, or fundamental human rights. Schumer and Casey are stuck on stupid. Yet it is not these two senators alone. This Ex-Patriot Act is different from the Reed Amendment not in kind, but only in severity. It is demagoguery. It is an affront to all who cherish liberty.
But should we be surprised? Power corrupts. Absolute power corrupts absolutely. The United States is for now still the most powerful nation in the world; this power has clearly corrupted some of its leaders, who are now drunk with arrogance and pride. They obviously believe that they are above the Constitution.
Peter W. Dunn is a DIY investor, a scholar of Early Christianity, and a former United States citizen who blogs on the discrimination of United States persons abroad at the Isaac Brock Society under the alias “Petros.”
@WhoaIt’sSteve
‘but I also think there should be consequences to actions, so the US isn’t right for you……,but don’t expect to have your cake and eat it too’
Based on that comment, your belief must be that if an individual happens to establish roots in another country (might have married someone while sojourning in that country), then it is okay if the consequences are they can never return to the country of their birth. Isn’t that a bit narcissistic in attitude?
I married a Canadian, had four children here in Canada, contributed to Canadian society, paid taxes here, voted here – so I should never be allowed to return to the U.S. Expecting to be allowed to return to US for visits to family, is not in my opinion asking for the right to have my cake and eat it too.
and therefore banned from spending $$ in the US.
How backwards can a (punitive) law be? How disliked does the US want to be?
Stuck on stupid is correct.
@Whoa: “…but don’t expect to have your cake and eat it too.”
Interesting comment. Thanks for making it.
I don’t think renunciants are looking for, or should expect, special treatment here. No automatic right to enter. Just the same treatment as any other non-citizen. Apply for a visa, that sort of thing.
No matter if it’s cruel, draconian, or even downright mediaeval, the US can of course deny entry to anyone. For any reason. Or even for no reason. But using the threat of an automatic entry bar, where it would not otherwise exist, as a barrier to expatriation is where this borders on the unconstitutional.
In any case, the Reed Amendment is actually a relatively empty threat for many. Folk who have decided to leave the US will often genuinely not care if they never return. And ironically, it may even spur more expatriations. To stay connected, rather than leave individually expatriates will be motivated to move their whole families, taking perhaps multiple generations with them as they go.
It’s a bit mysterious that the country should have to protect itself from people who might, you know, come back and start another successful company in the US. But hey, think of the children.
@Titus, US sourced gains only (allegedly).
http://techcrunch.com/2012/05/17/schumer-and-caseys-ex-patriot-act-details-of-how-they-plan-to-get-saverins-67m-and-more/
“The tax will apply to anyone who gave up his citizenship in the last ten years but only taxes capital gains earned in the USA following the date of enactment.”
I left posts, but under another name…
Thank you Petros.
@Steve, George Bush’s 2008 introduction of the exit tax removed the restrictions former US citizens had on the length of time they could spend visiting the US, putting them on equal footing with the countrymen of their adopted countries. This is just spiteful and mean.
@WhoaIt’sSteve Suppose Canada exiled the following list of celebrities, who have moved to the United States and some of whom have likely taken up US citizenship (I don’t know which ones): William Shatner, Steve Nash, Pamela Anderson, Jim Carey, and Wayne Gretzky. These people owe everything that they are to our education system, our health system, our roads, our military that protected them in their childhood, our RCMP, and yet in the citizenship oath of the United States, they must repudiated Canada (any of them who became American, that is). It is only fair to ban them forever from Canada because they now pay taxes to and live in the US? Right?
What? That would make us extremely vindictive, petty, cruel and uncivilized to ban them from ever entering Canada again? Really? Who’da thunk?
@Watcher, I guess I exaggerated when I said that most foreigners could use the US tax paid on capital gains as a tax credit to their countries. I did a little research and I found out that tax rates on capital gains vary widely around the world. Some countries don’t tax capital gains at all (Singapore), some don’t tax them if they are from foreign sources (Costa Rica), some tax them at rates lower than regular income (most of Europe), some tax them at rates higher than regular income (Mexico), some tax them only from residents (United States, Brazil), some tax them at higher rates for non-residents (Russia). And many countries have exemptions, as you mentioned. My conclusion is that there is no consensus regarding how to tax capital gains, so there is a valid reason for the US not to tax them from foreigners. Nevertheless, I think that the current exit tax is more than enough to ensure that renunciants pay the tax on capital gains they accumulate while US citizens. The new proposal is unnecessary, and taxes should not be a reason to ban entry into the country.
@Titus, according to the summary of the bill, it “only taxes capital gains earned in the USA following the date of enactment”.
http://www.schumer.senate.gov/Newsroom/record.cfm?id=336808
Sometime in the last 50 years American Exceptionalism turned into American Entrapment.
@Petros I would not begrudge Canada for applying consequences to an action that is viewed to be adverse to the nation’s ongoing viability. I empathize with all of you all’s plight, I think taxing foreign incomes is wrong, so is requiring complex forms, and not creating simple, accessible, online methods to file if we wish to keep the seemingly onerous requirement that American’s file an annual return. But, I also believe the best place for American’s is in the United States, even with their foreign spouses and family should that be their particular fancy.
@WhoaIt’sSteve I’m not looking for special treatment. I’m looking for the same treatment as any other UK citizen. As a dual citizen, I don’t understand why people think my US citizenship should be more important to me than my UK citizenship. Congress and the IRS are effectively telling us we have to choose (and honestly, I wish they would just come out and admit this rather than making life impossible as an expat!) and as a permanent UK resident, UK wins.
I’m lucky in that I no longer have any ties to the US so if I am barred from re-entry, really it’s the US that loses out as I’ll just take my tourist money elsewhere. However, why should my UK born and bred children be denied entry to the US if they decide to only retain the citizenship of their homeland? I’d genuinely be interested in your response…
@bubblebustin, I forgot about this detail. The current exit tax is probably more fair than the previous system because currently the renunciant is treated like any other foreigner right from the day of renunciation. The new proposal is trying to change create a distinction again.
@WhoaIt’sSteve
‘But, I also believe the best place for American’s is in the United States, even with their foreign spouses and family should that be their particular fancy’.
Prior to my marriage to my late Canadian born husband, we needed to make a decision on where we would settle. For a variety of reasons (not the least of which was my husband was working on his C.G.A. degree in Toronto), we made the decision to settle in Toronto. After all, I had already attended University there and loved the city. Then life started to happen – the usual things, children, school, difficult to move the kids etc. So we stayed in Canada. Eventually, I became a citizen of Canada because I wanted to fully participate in Canadian society ie the right to vote. After all, I had been brought up in an American family where the ‘right to vote’ was considered a priviledge.
According to your statement re the best place for an American is in the U.S., I must have made a wrong decision.
I really don’t believe any of my three sons would look upon it that way. And now that I think about it, I don’t believe any of my siblings (all living in the U.S.) would think that I had made the wrong decision.
WhoaIt’sSteve said: “But, I also believe the best place for American’s is in the United States, even with their foreign spouses and family should that be their particular fancy.”
My husband is an American and I am his foreign (Indian) spouse. Funny thing I was just telling him a few hours ago how lucky we are that we live in Canada and not the United States. I said if we were in the US we’d probably have lost our house by now.
In Canada he has a good and secure job which allows us to keep our house on a single income. Most of my business is export and my customers are Americans. If we had to rely on my income to survive we’d be living on the streets.
@Scotgirl, so far at least, the Reed Amendment is only for “covered” expatriates. That is, folk with >$2MM or so in the bank. Are your UK born and bred children already in a position to be “covered” expatriates? (They wish!) Or are you just extrapolating what you think congress will come up with next?
Whoa said, “But, I also believe the best place for American’s is in the United States, even with their foreign spouses and family should that be their particular fancy.”
You can’t be serious? You don’t really believe that Americans should really never want to live in other countries. Have you ever visited other countries? Do you know that there are many wonderful places in the world where people can choose to live? I mean, I think it’s like talking to a brick wall sometimes. You can try reductio ad absurdum arguments, like saying Canada should ban Wayne Gretzky–we would never in 100 billion years ever do anything even close to that stupid–and you come back and say Americans should stay in America. It’s like my reductio arguments aren’t even close to as absurd as the True Blue American who comments on this blog. Earlier I suggested that being an American is a mental disease. You should get a psychological examination.
@ Watcher. Ha, ha, ha, I wish! No, my children wouldn’t be covered expats in any case as they are part of that group with two citizenships at birth. I’m just responding to Whoa’s consequences to actions because I’m not sure he/she is aware that the US is a completely foreign country to some US citizens.
@Petros, I don’t know that any of these people have found the necessity to renounce their mother citizenships, as no other country forces their citizens to carry this kind of burden.
@Steve, once again you’ve proven that a little bit of knowledge is a dangerous thing. Should be the US congress’s motto right after “ready, shoot, aim”.
Although, the two citizenships at birth is part of the exit tax, wonder if it applies to Reed as well…
@Steve, you are a comic. Have you ever lived outside of the US? If I had to take my wife to the US, I would also have to take her mother, who watches our son when we are working. Oh, and the “helper” because she also helps out with our son as well. You can’t trust just anybody nowadays to help with kids.
That’s 1-2-3 visas besides my passport and my kids’s passport (which he doesn’t have, and if it’s up to me, he’ll NEVER have a US passport).
Do you actually believe the US is going to grant me 3 visas for spouse and other dependents at the drop of a hat? There are a million other reasons why moving to the US is out of the question for me, but I have to go work now.
Besides, I’ve been away from there for 6 years. I have no clue as to what I would do. Are you going to pay me while I’m looking for a job?
You seem sympathetic, so thanks. But please try to think beyond your nose. If actually read what we say, you’ll get a clear picture of the complexities of all of this. It’s not as simple as a “move back”.
@ Whoa
Just when we think we’ve drawn you into our light you slip on back into the darkside. I’ll put this very plainly for you. I am Canadian. My husband is American. We have to live somewhere. We want to live together. What side of the 49th parallel would you like us to live? Now bear in mind that I will not live in the USA. My husband wants to live in Canada. Still want to drag us kicking and screaming into the USA to satisfy your absurd sense of American exceptionalism?
why wouldn’t it Scotgirl? so far there have been no exceptions for accidental Americans. But GREAT point!
C’mon Steve, why don’t you tell everyone why you have taken an interest in our issues and decided to contribute to Brock?
@Bubblebustin, please note the oath of US citizenship includes the following explicit repudation of ALL other citizenships and loyalties:
Thus, Canada could argue that every Canadian rich celebrity whoever became an American has renounced their citizenship and should not be welcome in Canada ever again (by the logic of Schumer, Casey, Reed and Boehner). Hell, we made them what they are today, what right do they have to come back here to Canada!
@Petros You just reminded me of when my mother took US citizenship (for tax purposes no less!) after 40 years of living in the US. She said the oath with tears streaming down her face because she really didn’t want to become American. Everyone there must have thought she was nuts!
@petros, even though the US requires this it is unilateral. As far as Canada goes their citizens are still Canadian regardless and does not expatriate them because of it. We wouldn’t be so mean.