In a press release on his website, Jack Reed announces that he and Chuck Schumer have moved an amendment to the immigration reform bill to make “covered expatriates” — people who give up U.S. citizenship and meet certain asset thresholds, or who have missed some of the ridiculously time-consuming piles of tax paperwork required of citizens living abroad within the past five years — into permanent exiles from the United States, in similar terms as Schumer’s failed Ex-PATRIOT Act last year.
Contrary to Reed’s mendacious claims, this amendment does not just affect people who “accumulat[e] wealth and benefit from the greatness of the United States and then renounc[e] their citizenship to avoid paying their fair share of taxes”. As even a cursory glance at Wikipedia confirms, the overwhelming majority of people who give up citizenship have lived abroad for many years and became successful thanks to the countries in which they actually live, not the United States which they made a conscious choice to leave behind.
Under Reed’s new amendment, if you have lived abroad all your adult life and got lucky buying a house in the right neighbourhood, or even if you simply have missed some tax filings in the last five years, and you dare to exercise your human right to change your nationality as guaranteed by the International Covenant on Civil and Political Rights to which the United States is a signatory, then you too will be banished from the United States and refused the right to visit your relatives who still live in the country or the old stomping grounds of your early childhood.
It would seem that Chuck Schumer, the Democratic Senator from the carried interest loophole State of New York, has learned a few tricks from Carl Levin about gaming the U.S. legislative process. Now, instead of trying to get his bill to pass on its own merits, he’s snuck it into an existing bill with a greater chance of passing — just as FATCA died in committee before being snuck into the HIRE Act. His co-sponsor on the amendment, Jack Reed (D-RI), is of course the author of what even his fellow Democrat Daniel Moynihan referred to as the “incoherent and unenforceable” Reed Amendment to the 1996 Illegal Immigration Reform and Immigrant Responsibility Act, the United States’ first failed attempt to ban former citizens.
Other countries both developing and developed — ranging from the Philippines to Denmark to South Korea — have easy-to-obtain diaspora visas for their former citizens, a simple humanitarian gesture to allow emigrants to come back to attend their high school reunions, see their nephews grow up, attend a higher education course in the language of their childhood, and care for their parents in their dying days. The United States, on the other hand, is once again proposing exile for its own former citizens. “Greatest country in the world” indeed.
Update: The amendment number is SA1233; you can find it at page S4420 of the Congressional Record for 12 June 2013. Here’s a link to the THOMAS page for the amendment, but you may find it easier to go to the THOMAS search page, search for “expatriate”, and pick the most recent result:
SA 1233. Mr. REED (for himself, Mr. SCHUMER, and Mr. CASEY) submitted an amendment intended to be proposed by him to the bill S. 744, to provide for comprehensive immigration reform and for other purposes; which was ordered to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. __. INADMISSIBILITY OF INDIVIDUALS WHO RENOUNCE CITIZENSHIP TO AVOID TAXES.
Section 212(a)(10)(E) (8 U.S.C. 1182(a)(10)(E)) is amended to read as follows:
(E) FORMER CITIZENS WHO RENOUNCED CITIZENSHIP TO AVOID TAXATION
(i) INADMISSIBILITY — The following aliens are inadmissible:
(I) Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Secretary of Homeland Security to have renounced United States citizenship for the purpose of avoiding taxation by the United States.
(II) Subject to clause (ii), any alien who is a former citizen of the United States and who is a covered expatriate.
(ii) REVIEW FOR COVERED EXPATRIATES — A covered expatriate shall not be inadmissible under clause (i)(II) if the Secretary determines that the covered expatriate has established by clear and convincing evidence that avoiding taxation by the United States was not one of the principle purposes that the covered expatriate renounced United States citizenship.
(iii) COVERED EXPATRIATE DEFINED — In this subparagraph, the term ‘covered expatriate’ means an individual described in section 877A(g)(1) of the Internal Revenue Code of 1986 and to whom section 877A(a) of such Code applies.
The approach here is somewhat different from Schumer’s previous attempt. The Ex-PATRIOT Act by default classified all “covered expatriates” as “specified expatriates” and then banned all “specified expatriates”; it made the Secretary of the Treasury responsible for processing applications from “covered expatriates” who wanted to be reclassified as otherwise than “specified expatriates” so they could visit the U.S., but did not allow the Secretary of Homeland Security to grant them a waiver of inadmissibility. In contrast, the Reed–Schumer Amendment bans all covered expatriates and then makes Secretary of Homeland Security responsible for processing waivers.
The distinction may seem subtle — in both cases, you are deemed guilty and the burden is on you to prove your innocence — but it has an important implication: it very likely means that the IRS will have to share tax return information of ex-citizens with the Secretary of Homeland Security in order for DHS to be able to assess the claim that giving up your citizenship did not have the principal purpose of avoiding taxation. (Note also that the amendment empowers the Secretary for Homeland Security to use allegations of “tax avoidance” to ban even people who aren’t covered expatriates — though only on the same terms as the existing Reed Amendment empowers the Attorney-General to do.)
The other difference is in the standard used to ban ex-citizens: the Ex-PATRIOT Act banned any covered expatriate who had a “substantial reduction in taxes”, whereas the Reed–Schumer Amendment allows a waiver only for those who can prove that avoiding taxation was not “one of the principle [sic] purposes” of their choice to give up citizenship. This is a much higher hurdle to clear. If you are a U.S. Person living abroad, you very certainly would like to avoid U.S. taxation on your local retirement plan, not because the tax burden itself is “substantial” but because the paperwork is fraught with danger. But even if you clearly did not enjoy a “substantial reduction in taxes” by giving up citizenship, it might still be said that one of your “principle [sic] purposes” was to avoid taxation. After all, why else besides taxes would you choose to stop being a dual citizen of the “greatest country on earth”, or to naturalise in a country in which you’ve inexplicably chosen to live your whole adult life when neither your parents nor your spouse hail from there? Traitor!
@Eric, Check the Congressional Record again, page S4429. They are also introducing SA 1252, with the same text as the Ex-Patriot Act.
@usxcanada
I think you make the mistake of assuming that a Senator and you are equally interested in what others have to say. I see others Legislators that also have zero or just 1 or 2 in their following column. They like the medium to get out a message, but would rather not bother following others. They probably think they get enough input via their email and like I said, don’t give a shit about yours of mine 140 character comment.
Again, your .. Non sequitur not withstanding, I would still say, Reed is probably]ly one those that is NOT interested in following what others on Twitter might tweet, and I doubt he is as sophisticated or “security astute” as you present yourself to be. As a public figure, he is not practicing “a security culture” or trying to make it difficult for the “authorities to tie him to any grouping”. That might be your motive, but hardly would expect it to be his reason for keeping his following to zero. 🙂
On the other hand, there are legislators that have staffers, (I would assume) that are interested enough to follow you. Today Darrel Issa and Ted Cruz started following me. Not that I have anything as brilliant or witty turn of a phrase as you may have, but I found an opening to reply to a tweet they sent out about IRS abuse. I sent them the most recent ACA Press Release on IRS OVDP abuses. That prompted an almost immediate follow. http://bit.ly/14f5OYU
And, my friend, don’t assume that all are not as sophisticated as you. I know of other ways to follow. I have my own separate lists hidden from prying eyes. 🙂
Darrel Issa is following you, Just Me. Great — you do have a lot to teach him and perhaps he will be willing to listen for another avenue to pursue.
Here is a story that concerns Mr. Issa and the IRS hearings: http://www.businessweek.com/articles/2013-06-13/darrell-issas-irs-investigation-is-falling-apart.
Why does the IRS get away with not responding to Nina Olson or to follow recommendations of the Inspector General?
I wonder if this meeting has taken place: http://isaacbrocksociety.ca/2013/05/21/how-does-it-feel-mr-shulman-how-does-it-feel/comment-page-2/#comment-351605 ?
Listen to what J. Russell George, the Treasury Inspector General for Tax Administration says in this clip: http://www.youtube.com/watch?feature=player_embedded&v=3eQZoXAU7X0 on this new thread: http://isaacbrocksociety.ca/2013/06/13/irs-refunds-4-billion-dollars-a-year-to-illegal-immigrants/.
@Just Me, would you be kind enough to tweet them the article by Amy Feldman “The perils of overseas tax disclosure: An immigrant’s story”
http://www.reuters.com/article/2013/01/28/us-column-feldman-immigrants-idUSBRE90R10Q20130128
http://isaacbrocksociety.ca/2013/01/28/the-perils-of-overseas-tax-disclosure-an-immigrants-story/
I don’t have a twitter’s account, and with the latest prism scandal not too eager to get one 🙂
I am so paranoid about going public.
Thanks!
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@Shadow Raider: thanks, I totally missed that one. I stopped reading after I came to the first bunch of hits for “expatriate” on that day. Never imagined they were so obsessed with this issue that they’d move two conflicting amendments on it in the same day. What a godawful mess.
Finally figured out the format for permanent links to amendments on THOMAS. Here’s the link to SA 1252, but until the amendment comes up for consideration it’s just a placeholder page with a link to the appropriate Congressional Record section
@Just Me, Curious facts about Darrell Issa and Ted Cruz:
Darrell Issa is of Arab descent, and is currently the second wealthiest member of Congress.
Ted Cruz was born in Canada from a Cuban father and an American mother, so unless he has renounced Canadian citizenship, he is a dual citizen of the US and Canada.
@Chris, I tweeted it to them. Tweeted them my story too: goo.gl/VEu3c
@Chris… There you go my friend… All ranking members on the Senate Finance and House Ways and Means.. plus a couple others. RepElijahCummings doesn’t do twitter…
https://twitter.com/FATCA_Fallout/status/345392494839738369
https://twitter.com/FATCA_Fallout/status/345393984304201728
https://twitter.com/FATCA_Fallout/status/345394794849263617
https://twitter.com/FATCA_Fallout/status/345395336891744256
https://twitter.com/FATCA_Fallout/status/345396309257236482
https://twitter.com/FATCA_Fallout/status/345396918916096000
https://twitter.com/FATCA_Fallout/status/345397854979883009
https://twitter.com/FATCA_Fallout/status/345398606498525185
https://twitter.com/FATCA_Fallout/status/345400170156019712
https://twitter.com/FATCA_Fallout/status/345402914371665920
https://twitter.com/FATCA_Fallout/status/345403828998377472
@Shadow Raider Thanks for that. I have been aware of both of those facts. Cruz is going to have a hard time with the birthers. 🙂 Fox has already been questioning him about that, and rumored runs for the Presidency.
@IRSCompliant: Could the Reed amendment be critical in moving us closer to residence-based taxation? Perhaps the House Committee should be strongly encouraged, for the sake of balance and because we are all fair-minded US persons, to consider seriously including the Reed for assessment. Always a risk, but comparison of the merits of the over the top Reed vs. the others might be helpful.
Well, maybe Congresscritters who currently see the ACA & Schneider RBT proposals as totally off the wall will understand when you highlight the Reed Amendment to them that it’s merely the first of many fascist measures they’re going to have to take in the future to prevent their citizenship-based system from leaking. Or maybe when they see the Reed Amendment it’ll cause a “triangulation” effect: they’ll think all three proposals represent reasonable positions along a spectrum of opinion, and they’ll pick something somewhere in the middle.
Worse, maybe learning about the Reed Amendment would cause them to strengthen their preference for citizenship-based taxation: the Reed Amendment is already law unlike the ACA proposal — and quite popular law at that, having been passed 25-5 by the committee which considered it — which would give it quite some weight in most Congresscritters’ minds. And they’d clearly see that the Reed Amendment is ineffective under RBT, because a “covered expatriate” would then be someone who moved out of the US to avoid taxation — but then, they’d still be citizens so it would be illegal to apply any serious immigration consequences to them. At best that might push them into considering a “citizenship based taxation only for rich people” scheme: treat people who were rich or paperwork-non-compliant at the time they left as continuing to be tax-resident in the US (the way already how California treats you if you move out of the state while retaining domicile there and your income is over a certain threshold).
bubblebustin –
No magic here either to trek backward through the thicket of Brock. Maybe the surveillance birds ate up the breadcrumb trailmarks?
JustMe –
The best security may consist in scattering ambiguous samizdata about for only initiates to ponder and perhaps decipher. Amusing to think that the portents of semi-inscrutable syntactically anomalous maybe-ravings could amount to a substantial part-time job for a humorless bureaucrat. No functionary should have to bear bare facts. Clog the petabytes with musings and messings of a miss or a master.
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@Just Me, @Swisspinoy. Thanks so much.
@Eric, we disagree then on whether comparison, by House W&M Committee, of Schneider and ACA proposals vs. Reed will be helpful.
Anyway, all our comments are irrelevant as I now find that Schneider did in fact strongly “highlight“ the Reed in his proposal:
Schneider actually emphasizes the special over the top nastiness of the Reed by pointing out that we [tax cheating-Medicare cutting-student loan stealing-renouncing-Brockers] are equated by Reed with “…terrorists, Nazis, and international child abductors, among others” and then goes on later in proposal to explain more about the Reed.
So, the Schneider proposal will be evaluated in the context of the Reed, should Committee actually read the proposal.
[As a partial aside, my search engine for “Reed” turned up in the Schneider the word “greedy” and a nice 1995 Baucus quote which will also be evaluated by Committee:
“For example, during the 1995 Finance Committee hearings, Sen. Baucus referred to those who expatriate, supposedly to avoid taxes, as “freeloaders . . . [and] greedy, unpatriotic people that FDR called malefactors of great wealth . . . [who] are skipping town, evading taxes, and making us cut Medicare and student loans to make up the difference.” Unofficial Transcript of July 11 Finance Hearing on Expatriates, 95 TAX NOTES INT’L 140-10 (July 11, 1995).]”
Hi, bubblebustin.
I’ve just done searches on “Seven Deadly Sins,” “Seven,” “Deadly,” “Sins.” I find a reference that Just Me made to a usx list but I think it refers to articles listed in the usx site.
@usx,
Can you give a more descriptive words of what you might have used for the “seven deadly sins” comment or post? Sounds like one that might be of interest to readers once again.
By the way, that 1995 Senate Finance Committee hearing can be watched here.
This is USX’s comment referring to the 7 deadly sins
USXCanada 2012/11/08 at 2:07 pm wrote in response to a comment by Petros:
@ShadowRaider, thanks for providing the link to the video. I knew that you discovered this incredible video but I could not recall where in the forum the link was cited.
Yea, Pacifica!!!! You found usx’s bread crumbs.
I do continue to strongly believe there is a very good chance this immigration will be blue-slipped by the House unless all revenue raising and tax law change provisions are stripped. As I understand it only takes one member of the House to raise a blue slip issues on a point of order. In fact this is how some of the last immigration reform bill died.
http://www.wilsoncenter.org/publication/house-threatens-blue-slip-the-face-the-senate
http://stockman.house.gov/media-center/press-releases/stockman-moves-to-automatically-kill-senate-gun-ban
WASHINGTON – Should Senate Democrats approve a sweeping new anti-gun bill, Congressman Steve Stockman (R-Texas 36th) announced Tuesday he will seek to automatically kill it using a House “blue slip.”
“The Democrat gun ban is dead on arrival. I will introduce in the House a blue slip resolution that will automatically kill the Senate gun ban,” said Stockman. “Not only are Democrats on the wrong side of public opinion, they are on the wrong side of the Constitution. You can’t strip Americans of their gun rights, and you certainly can’t do it by having the Senate create a national tax on firearms. They are in violation of constitutional limits on federal power.”
A “blue slip” is a resolution that automatically returns to the Senate any bill that violates the “origination clause” of the United States Constitution. The origination clause states “All Bills for raising Revenue shall originate in the House of Representatives.”
Blue slip resolutions are immediately considered as a matter of constitutional privilege, are debatable for an hour and are not subject to amendment.
Senate Democrats took three anti-gun bills (S. 374, S. 54 and S. 146) and quickly rammed them through the Judiciary Committee without even a committee report, then combined them into one bill (S. 649.) The bill includes language mandating a fee for background checks for all private transfers of firearms. Similar legislation has been construed by the Supreme Court to be a tax. By introducing a bill imposing a new tax through the Senate, Democrats have violated constitutional mandates and the bill is automatically invalid.
According to The Heritage Foundation, S.649 imposes a new tax by forcing individuals to pay for background checks when selling or giving away a firearm. The mandate to use the National Instant Criminal Background Check System does not provide a service to the buyer or seller but to the government, making it a tax.
Additionally, the Supreme Court ruled last year in NFIB v. Sebelius that mandating citizens to pay for a service can be construed to be a tax, with Chief Justice John Roberts writing the majority opinion expanding the federal definition of a tax.
@
Calgary411pacifica.Thanks for finding that one by @USXCanada. That is good. Does have a colorful way with the words, and truisms! Pride, Envy, Wrath, Sloth, Avarice, Gluttony, Lust: A maelstrom cesspool of deadly sins! Will save that one.
@Pacifica777
Thank you, I’d take you on a walk through the forest any day!
…and most of all thank you to usxcanada for writing:
“Look what we have going here. Pride in the contrary country that is too big to fail. Envy of those who live better lives elsewhere. Wrath directed at imaginary offshore tax cheats. Sloth in dealing with a fiscal cliff. Avarice in wanting anybody else to pay the bill. Gluttony in sucking ever more symbolic $$$ into the black hole of debt. Lust to keep on being so great on the backs (hoo! don’t miss this pun) of the entire rest of the world. A maelstrom cesspool of deadly sins – that’s the terminally addicted USer.”