Lynnley Browning (Twitter: @LynnleyBrowning) brings us the two-and-a-half-month old news that songwriter Denise Rich, the ex-wife of Marc Rich, had her name published in the Federal Register back in April due to her renunciation of U.S. citizenship in November 2011. Her editors at Reuters seem to have decided that a neutral statement of the aforesaid fact wasn’t good enough for the headline, so they pushed it out over the wires it as the inflammatory “Socialite Denise Rich dumps U.S. passport”. The story has also been picked up by HuffPost and MSNBC.
It seems that Denise Rich indeed put down the US$450 and renounced rather than relinquished U.S. citizenship; she didn’t acquire any new passports or government jobs recently, and she probably learned a thing or two from her ex-husband’s failed attempts back in the 1980s and 1990s to argue that he had relinquished U.S. citizenship by naturalising in Spain.
The article features the same old U.S. mainstream media sensationalism about renunciation we’ve all come to love hate love: a Lifestyles of the Rich and Famous-style recounting of the renunciant’s possessions and travels, every item of dirt that can be dug up about the renunciant’s financial situation, and a description of the renunciant as part of a “wave of wealthy people” who “leave” the U.S. — even though no public figures are available about the financial situations of the former citizens and green card holders, or about the timing of their departure from the U.S. relative to their relinquishment or renunciation of U.S. Personhood. But this article has something new, too — this item of hilarious spin on the U.S. tax system:
While Austria, like the United States, generally taxes its citizens on their worldwide income, it has generous tax breaks for citizens who spend half the year abroad.
Of course, Austria — like every other civilised country on earth — taxes people who live or invest there, and doesn’t tax people who don’t live or invest there. Describing the non-taxation of people who don’t live or invest in your country as “a generous tax break” is an amusing new way of trying to justify the U.S.’ citizenship-based taxation system, so I’m sure we’ll be seeing that line repeated in the American media in the future.
And finally, when reading the news these days, you have to go one step beyond looking at the truth or falsehood of the statements in the story itself, and ask: why this story? Why now? Denise Rich’s name was published in the April 30th “name-and-shame” list, alongside Eduardo Saverin. It took Bloomberg Businessweek a grand total of ten days to notice, fact-check, and publish the Saverin story, and another week for the demagogues to introduce their Allow Schumer to Sermonize and Harangue on American Television Act Expatriation Prevention by Blah Blah Blah Act in response. What took Reuters seven times as long? Perhaps it just took that long to get Rich’s spokesperson to return phone calls?
Coincidentally, the story about Denise Rich comes out just as interest in the last Evil Unpatriotic Tax Cheat has died down. The number of people viewing Eduardo Saverin’s Wikipedia article has fallen from 40,000 people per day at the height of the frenzy in mid-May down to just one-fifth that number. Similarly, traffic to Ex-PATRIOT Act article dropped by almost the same proportion, from 1,500 per day to a few hundred. Indeed, barely any noise has been heard all month about the Ex-PATRIOT Act. What better to put it back front and centre in front of American television viewers than a rerun of the events that led up to its introduction? (I guess it wasn’t an option to wait around another month as the IRS busts through its 30-day publication deadline for the second quarter list, which will no doubt have even more names both famous and utterly unknown in it).
Update: In the comments, Shadow Raider points out a gross error in Browning’s article which I hadn’t noticed:
Rich, who wrote songs recorded by Aretha Franklin, Mary J. Blige and Jessica Simpson, is the latest bold-faced name to join a wave of wealthy people renouncing their American citizenship. Facebook co-founder Eduardo Saverin gave up his U.S. passport to become a citizen of Singapore, an offshore tax haven, before the company’s initial public offering in May.
Apparently Reuters did not make use of the past two-and-a-half months to fact-check the snarky asides in this story. As even Wikipedia manages to get right, Saverin is a citizen of Brazil, not of Singapore, and he has explicitly stated to Singaporean media that he has no plans to become a Singaporean citizen. Naturalising in Singapore would require Saverin to give up his existing Brazilian passport, to make CPF contributions on his salary, and to send all his future sons off to Lee Kuan Yew’s army, so it’s unsurprising that he’s not interested in it — but Homelanders seem to have a very hard time grasping the fact that you do not have to be a citizen of the place where you live in, that other countries let foreigners live within their borders too, and that as a result people of other nationalities live all over the world outside of their respective countries of citizenship.
@CanuckDoc:
Austria has resident-based taxation like all other countries, except the US and Eritrea. To the extent that an Austrian lives in the UK, he/ she will be taxed in the UK and not in Austria. Austria is in no way a tax haven as she incorrectly asserts.
This article was written in a sensationalistic manner and it seems it was properly placed under the Reuters “Entertainment” section. It could have appeared in the NY Post or the Sun.
In the past it has been mentioned that Lynnley Browning has contacts into the US government, in particular, the US Justice Department, which has used her as a mouthpiece for their political views. This article on Denise Rich may be another example.
@all…
I went a head and posted something at Reuters. It too is in moderation. Maybe some of you also have posted, and we just don’t see them yet.
Here is what I put up. My usual themed stuff… Just an FYI
…………………………………………………………….
You cannot tell the story of people (rich or not) who are either renouncing or relinquishing (there is a difference) their citizenship without a full understanding the unique nature of U.S. Citizenship taxation with all the complexity that surrounds it.
You have to couple this understanding with the inside knowledge of a 3 year IRS jihad in search of revenues ostensibly to cover the continued tax breaks for U.S. homelanders and profligate deficit spending by Congress. Currently they are chasing up revenue from all U.S. persons (more than just citizens) living around the world even when they are not resident in America any longer. Only other country that does anything close to this is Eritrea. They want to tax and penalize them for past FBAR reporting failures, get them to report in the future, and consequently make life very difficult for them in the countries of their residence.
Never mind that no other civilized country in the world does this. This is the American way. Other countries send their citizens out in the world unencumbered with double taxation and reporting burdens to create markets for their export products. The US, on the other hand, tethers them home with an taxation shackle which has severe, complex and expensive tax rules that makes it almost impossible to them to survive, complete or create export jobs for the homeland.
This story was fun one to write, I am sure, even with all the inaccuracies that it contains about Austrian territorial taxation (very normal in the world) and Saverin’s renunciation. BTW, he did not take up Singapore citizenship. He did keep his Brazilian citizenship. You should do some serious inquiries of why he would keep it over the US passport? Could it be that the US be doing something wrong and that Brazil is doing something right?
I understand that a story with headline of “Socialite dumping the US passport” is designed to titillate the “drive by” pop culture reader who understands nothing about the complexities of U.S. Citizenship tax law, or the past 3 year offshore IRS jihad. This story adds nothing to the broader understanding of the harmful policies like FBARs and FATCA. If you just said FWhat? I rest my case. You really should start googling around! If you have lived in Timbuktu for the past 30 years and felt the recent pressure of the IRS attempts to haul you into their revenue/penalty net, you get the broader story however!
U.S. citizenship taxation complexities, penalties and continued offshore actions have many unintended consequences and tons of collateral damage. Basically, if you live over seas, and are no longer resident in America, you have some tough choices, Comply, renounce or return home to Kansas! The cost of the US passport has just reached a tipping point, and many are deciding the cost of maintaining it is not worth the benefit anymore.
Those who are taking the renunciation route (a term the US uses for handing in a passport) are doing it for very understandable reasons. It is not just about the taxes, it is about the complexity, the hassle and the Draconian penalties. This is not just the rich leaving, but they are the most sensational and easy to write about. The IRS is required to give you their stats and names on what is called “covered expats” or those having certain characteristics. The most common being that their world wide assets have a value in US dollars more than $2 million. But is my contention that they are just a small part of the story.
There is another class that you don’t know about or would have a harder time counting, and that is the thousands of average dual citizen or accidental Americans who are facing these same serious decisions and electing not to participate in the most complex and onerous penalty taxation regime in the world any longer. Also there are thousands of immigrants who are being seriously harmed, and are just heading back home rather than hand over their family savings to the IRS jihad just because they failed to send in an FBAR that few knew about.
Yes, this story is a headline grabber, but just scratches the surface of a story much bigger than what is portrayed here.
@Just Me, Wow! I wished I had your writing skills. Thanks for touching on the immigrants story again!
And just as expected, the two-minute hate for renunciants begins anew: NY Post, WSJ, The Blaze, Atlanta Blackstar, SF Chronicle, Fox News, CBS, Daily Mail.
Only thing missing is a Schumer press conference.
Lynnley Browning’s title at Reuters is “Accounting and Tax Correspondent”. After noting her poor understanding of Austrian taxation, which, as Just Me indicates is just normal territorial-based taxation, I must question whether she is sufficiently competent for this challenging position. Reuters might wish to do itself a favor by employing an accounting or finance major to be its “Accounting and Tax Correspondent”. Lynnley Browning has a BA in Slavic Languages and Literature.
http://www.businessinsider.com/author/lynnley-browning
NY Post, I tweeted them, as no comment available.
WSJ, I posted a comment like at Reuters which is now showing.
The Blaze Posted a shorten comment. Only 1500 characters allowed.
Atlanta Blackstar I tweeted them, as no comment available
SF Chronicle, Commented and sent a tweet to the author
Fox News, No comment available, so tweeted them.
CBS Posted a comment.
Daily Mail Posted a comment.
So I have done all I can do tonight to counter the ” the two-minute hate for renouncers “
What is it with these “commenters” on these articles? Are all “homeland” Americans really this vindictive and mean-spirited? I don’t get the “never come back” and “seize all of their assets” rubbish that is posted everywhere. I particularly enjoyed one comment recently that complained about renunciants turning their back on the “most free and democratic country” in the world and then ended with the call to seize their assets like the old Soviet Union used to do to punish them! Do they even think through what they are writing anymore?
What other country bans you from ever returning or seizes all of your assets if you renounce citizenship? I imagine that the list, if it even exists, would include real winners like North Korea and Eritrea. Great company there, USA!
I can’t really think of any other issue that would get these people foaming at the mouth like renunciation does. Can you? Even on the debate on the Wall Street Journal seems like it was coordinated by elementary school students. Its like some mindless mob out for blood on a neverending witch hunt.
Lynnley Browning, the Tax and Accounting Correspondent for Reuters, who wrote the article on Denise Eisenberg Rich, apparently has well developed connections with the US DOJ. Whether the article on Denise Rich has anything to do with the DOJ is, of course, speculation, but the background and timing of her articles on taxation of US citizens abroad and related topics should be reflected upon.
Below is a link to a Neue Zuercher Zeitung article from 28 June 2011 on the Swiss-US negotiations to reach a global settlement for past Swiss bank transgressions against US law, etc. The article begins with:
“Through a Reuters reporter the US Justice Department is applying pressure on the negotiations led by (Swiss) State Secretary, Michael Ambuehl, for a global bank deal…. “
“Lynnley Browning, the reporter with a direct line to the US Justice Department (DOJ), has been writing for a short time for the news agency, Reuters. The top stories coming out of the DOJ, which previously appeared in the New York Times, are now being published by the news agency.”
http://www.nzz.ch/finanzen/nachrichten/macht_justizdepartments_druck_auf_staatssekretaer_ambuehl-1.11097258
As an aside, this article discusses the different goals of the DOJ and the IRS regarding a global deal between the Swiss banks and the US. Here is a passage:
“Different Interests on the Part of the USA
Why has Browning published her article at this time? The US Justice Department may be dissatisfied with the speed of the negotiations, speculates a legal expert. With such an article which suggests that the negotiations are endangered, pressure is being applied on Swiss State Secretary Ambuehl. Because at the negotiating table on the American side are sitting not only representatives of the DOJ but also the IRS tax authorities. The IRS is interested solely in that the Swiss bank pay as high a penalty as possible.
The DOJ, to the contrary, has completely different interests. They would like to file suit against as many banks, bankers, advisors and attorneys as possible. At this time the DOJ does not want a comprehensive agreement with Switzerland because then all investigations would have to be stopped.”
@Innocente, this looks like a financial war against Switzerland, the US trying to extort as much money as possible, from as many banks as possible. Hatred of the US overseas is just going to get worse.
Is that worth the money they’re going to collect?
It’s pretty sad for US citizens living in Switzerland, but in light of what you just wrote, it’s understandable that Switzerland wants to somehow retaliate and close their bank accounts.
And why is the blame put on the banks/bankers/advisors in addition to the people who actually commited the fraud. I am just very naive, but I don’t understand why the banks would be responsible. It’s the responsibility of the person to properly declare their taxes – not the foreign bank who stores the money. That would be like suing a firearm manufacturer because they sold a gun to someone who used it to commit a crime. Yet, we don’t see that happening. What is the difference?
@Don Pomodoro, I’m also shocked at what these commenters write. They seem to equate renunciation of citizenship with treason or even an attack against the US. I think that this kind of reaction has three main causes: misinformation from the US media about citizenship-based taxation, the idea that the US is the best country in the world, and most importantly the general punitive trait of the American people. I only recently realized that Americans seem to be more punitive than most other people in the world, and this is reflected in US laws: death penalty, excessive fines, civil forfeiture, Reed amendment, jury trials, disproportionate tort compensation. Is this a remnant from the Puritans?
@christophe
What kind of customer would open a bank account with a bank that’s bleeding red from FATCA? You can’t get blood out of a stone. The ‘logic’ the US is using is the same at play in the continued destruction of the middle class. Who will be around to buy all that junk from Walmart?
@Christophe, There are laws that require banks to check some information about their customers and report their earnings to tax agencies. Gun sellers are also required to check customers before selling guns to them. You might disagree with these laws, but banks and gun sellers can be fined for not checking or reporting certain information, not for the actual crimes committed by their customers.
The main problem I see with these lawsuits and FATCA is that the US is trying to apply its laws to foreign banks (“Swiss bank transgressions against US law”), outside US jurisdiction, unilateraly without treaties or agreements with the other countries. A Swiss bank only has to abide by Swiss law, which includes treaties between Switzerland and the US, but not by US law itself.
@Christophe
We have to remember, or not ignore, that some Swiss bankers were actively involved in encouraging tax evasion by US persons in America. They represented that they could hide their US money from the IRS. That is not the entire Swiss banking community, but they are tarnished with the same brush as those that were blatantly encouraging US tax evasion. I am sure that is frustrating for some Swiss bankers just as us all being called Cheats for not filing FBARs is frustrating for us.
@Shadow Raider
I think you are onto something about the punitive nature of the American psychic. Sometimes it seems almost medieval and only a step or two removed from sharia law. “An eye for an eye” is a biblical concept, and religious concepts of justice involve vengeance too. It certainly is wrapped into the character of “real America”, so to speak. I do think there is something left over from its puritan roots. If you are interested in the religious cultural aspects of American history, I would really recommend the PBS program called “God in America”. You can’t understand America without knowing and understanding this story.
@Just Me, I don’t think that this is really a religious aspect, I think it’s more cultural. The people of certain Asian countries are also overly punitive against certain practices, and many religious people of Latin America and Africa are not. The Puritans themselves were disliked by other Christians for being too zealous. The Babylonian code of Hammurabi has the oldest known reference to “an eye for an eye”, applying it literally, and if you read the code you’ll see that its concept of justice is perverse and involves much more vengeance than the Bible. The traditional Jewish interpretation of “an eye for an eye” is that a person should pay a monetary compensation to another for having caused a loss, and that the compensation should have the same value as the loss, not more and not less. Certainly not that the person should also lose an eye as the other person would gain nothing from that. I would be glad if the FBAR fines were equal to the (zero) loss the US had for not receiving the report on time. Forgiveness is also a traditionally Christian value, maybe Petros can explain it better.
Shadow Raider
It is cultural, yes, but that cultural is created out of the forces that shape society. Religion is a BIG force in America, much more than many foreigners understand. Certainly my Aussie in-laws don’t fathom it, nor do my Kiwi friends because other forces (non religious) have shaped those cultures.
That is why I say, punitive punishment has some origins in our religious history. Even forgiveness, a Christian tradition does still carry a punishment component. I will forgive you, but still expect you to pay for your crime. As a child raised by a minister, my dad always forgave me for my sins, but he still used the belt to reinforce the lesson he wanted me to learn.
Again, watch that program God in America. Even if you are not religious, and I am not, I found it fascinating. I have looked at America and some if its cultural practices in new ways ever since watching it.
@Innocente
That is very interesting speculation. I am marking my calendar for August 10th, for the next big announcement about some person of note who is renouncing. Also, I will keep my eye on Lynnley Browning. Journalist have been used to send messages via the media before. IE Judith Miller and her role in selling the War on Iraq. So nothing would surprise me.
@Just Me, Thanks for the hint about the program. I am religious, and I was trying to say that not all religions are punitive, and to give counterexamples to your statement that “religious concepts of justice involve vengeance too”. It depends on the religion and how it is interpreted.
This may be off-topic, but I don’t understand how forgiveness can carry a punishment component. If your dad punished you, I don’t think he really forgave you, he only said that he did as part of a ritual. Forgiveness, from a dictionary: “release from guilt, obligation, or punishment“.
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@Shaddow Raider…
I think you would enjoy the program. Maybe the religion I was raised in was different than yours, but I have always seen an association between too. You can punish and never forgive, and you can forgive but still punish, and it is the later that I experienced. Anyway, enjoy the program. It is very well done, and you will be glad I directed you to it. 🙂 Frontline and American Experience teamed up on it.
The reason for Lynnley Browning’s delay in reporting Denise Rich’s renunciation has been determined. She was planning her wedding:
http://www.nytimes.com/2012/06/24/fashion/weddings/lynnley-browning-patrick-keleher-weddings.html
https://twitter.com/FATCA_Fallout/status/223123716803006464
*I have started watching some of the God in America program myself. One thing I have to remind myself is that when America tends to do something I find wierd or strange there is probably some type of religous overtone to it.
@Tim
You are absolutely right, and that is why I recommend this program so highly. If you want to understand America, I think this program is must watching. It even explains a lot to me about some of my own up bringing. Things we did, that we just did because that was the way it was, but I never understood, until watching this program. Very well done…
And, if you get done with that, and are a glutton for punishment, if you want to understand Romney, than the other Frontline Program, The Mormons is also required watching.
*One of the things that surprises me too is to the degree that the left and Obama have picked up on the language of religiousity in the aftermath of Bush as president despite spending eight years attacking Bush’s religiousity. This change of heart on the part of the US Democratic Party more than anything causes me to view them as hypocrites.