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!
@Tim
That was wonky but very interesting about the Blue Slip. There is a lot about House and Senate rules and procedures that I don’t know about. Thanks for highlighting that one.
@usxcanada
How many hours do you spending constructing these, or do they just flow seamlessly from your brain to your fingers? 🙂 I will give you this, you are good and endlessly entertaining with your comments!
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.
That was Pacifica’s search for “deadly” which brought it up, Just Me. I failed.
Tim, thanks for our very interesting education on “blue slips.”
Re:
Could / would the fees for DOS services that we US Persons Abroad must pay for the constitutional right to renounce US citizenship, to register with the US to get a US Social Security Number, and even to obtain a passport be construed to be the federal definition of a tax — and what difference would it make?
From wonky to whacky from none other than Michelle Bachmann on immigration reform:
““This is President Obama’s number one political agenda item because he knows we will never again have a Republican president, ever, if amnesty goes into effect. We will perpetually have a progressive, liberal president, probably a Democrat, and we will probably see the House of Representatives go into Democrat hands and the Senate will stay in Democrat hands,” Bachmann said.
She also said that if it passes, the bill will create a permanent progressive class.
“That’s what’s at risk right now. It may sound melodramatic, I don’t mean it that way, but this is that big and that important,” Bachmann said.”
From: REVOLT AMONG REPUBLICANS ON IMMIGRATION BILL: 70 HOUSE MEMBERS RISK CAREERS IN PLANNED SHOWDOWN WITH LEADERSHIP
“The 70 members are petitioning for a special Republican conference meeting on the bill, a “highly unusual” move to go head-to-head with the speaker, according to Reps. Michele Bachmann (Minn.), Steve King (Iowa) and Louie Gohmert (Texas), who are serving as spokespersons for the group.”
http://www.theblaze.com/stories/2013/06/13/revolt-among-republicans-on-immigration-bill-70-house-members-risk-careers-in-planned-showdown-with-leadership/
@usxcanada, there is Another tactic which would really be super cool if it caught on, however I won’t be the first one to try it out
http://www.ijreview.com/2013/06/59168-and-now-a-public-service-announcement-from-the-nsa/
Here some comment I emailed to some of you.
A couple of things to keep in mind. I have read the amendment text and it is really more a tax law change than a immigration law change. Why is this important. Well right now this is a Senate originated bill. Under the US Constitution ALL Revenue Bills must originate in the House so the “revenue” provisions of this bill are clearly Unconstitutional and subject to court challenge. There is also a procedure for the House of Representatives to send back or “blue slip” or Senate originated revenue bill.
So a couple of things to keep in mind.
1. I suspect some Republicans such as Rand Paul will oppose this amendment.
2. If it makes it into the final bill some anti immigration House Republicans will be licking their chops to be the first House member to blue slip and send the entire bill back to the Senate. Past immigration reform bills such as back in 2007 were killed via blue slip along these lines.
3. Given the importance of this bill to the Senate leadership I would tend to doubt that they would want to create a blue slip problem(Although they did do that on the Passport revocation/highway bill)
4. I could see possible objections from the Senate Finance Committee leadership and Treasury/IRS to this.
5. It is still being worked out whether amendment to this bill will need 50 or 60 votes. It probably could get either although again how much of a stink do Paul, Lee, Cruz etc make.
Schumer if he really wants to pull this off needs to make his amendment a strict matter of immigration law and take the “revenue” parts out. The only way he can do this is to ban ALL former US citizens from entering the country. That might be too much even for the Democrats.
@Mark Twain
That is too funny, and frankly, it would be effective.
A question for the legal scholars around here. If renouncing citizenship is my right, how can there be any negative legal consequences for exercising this right?
Pingback: The Isaac Brock Society
Thanks for the appreciations. Be assured that this disciple of Maynard G Krebs puts no work and little time into the effusions. All it takes is a spark or a germ. Disclaimer: those are metaphors, and this universe is verbal. In one of my other arenas, where I blend excruciating bureaucratic detail with vivid assessment, I get complaints of being inflammatory. Standard response: facts do not have to put people to sleep, and lively language does not mean content can be dismissed.
@usxcanada
I’m going to take a stab at it. An actuary with attitude?
@Tim. It would be nice to know what a blue slip is. Also, it would be good to understand the 60 vote concept.
Pingback: The Isaac Brock Society
@MarkTwain..
I can answer the 60 vote issue.
That is merely a Senate rule for cutting off debate on a subject and moving own to actual consideration on the floor and a final vote where 51 votes rules.
If they don’t get 60 votes, it is considered by many that the statue proposed as failed because it was not supported by a majority.
With the way the filibuster rule is evoked now with out the need to really filibuster like Rand Paul recently did on the Drones killing Americans on U.S. soil, often the 60 votes don’t get cast and the motion to move on fails.
The press generally mistaking reports that all legislation requires a 60 vote super majority to pass, but that is NOT a Constitutional provision, it is just a Senate rule, much to the chagrin of the party in power.
James Fallows has written about it a lot, and here is his most recent..
http://www.theatlantic.com/politics/archive/2013/06/false-equivalence-watch-a-keeper-from-the-la-times/276643/
Notice his reference to George Orwell at the end.
Here is the technical explanation of a Filibuster 60 vote majority from wikipedia
http://en.wikipedia.org/wiki/Filibuster_in_the_United_States_Senate
Will let Tim do the Blue slip thing, as frankly, I was not aware of it.
Mark,
A Blue Slip is related to the fact that the Senator can not introduce and pass a bill that raises revenue or changes the tax code. The proposed Schumer Reed amendment would do just this. If the Senate does pass a bill that does so and send it to the House by tradition the House sends the bill back to the Senate in a blue envelope noting its unconstitutionality. This is a quite routine and non partisan procedure as even if the House was to approve such a Senate bill and the President were to sign the revenue raising provisions would be deemed unconstitutional by the courts.
The area that gets murky is when you start equating fees with taxes and the House gets somewhat aggressive in asserting blue slips on bill that are probably constitutional. The Schumer Reed amendment in my mind though is a slam dunk for a blue slip.
Are the Senators just ignorant of the difference between ‘renounce’ and ‘relinquish’, or do they literally mean “WHO RENOUNCE…” ?
Note what is also coming in the Immigration bill: A National ID card
and here was the email from Ron Paul..
I would encourage you to listen to this…
http://chooseliberty.org/nationalidcardsb.aspx?pid=0616b
National ID CARD!
is this truly the day that a national id card comes to USA? A week after Snowden?
There are lots of spoofs on the net.
I just googled it and found an article in yesterday’s New York Times.
http://www.nytimes.com/2013/06/16/us/politics/as-immigration-bill-moves-forward-fear-of-an-id-system.html and a Rand Paul op-ed in the Washington Times
http://www.washingtontimes.com/news/2013/may/24/blocking-the-pathway-to-a-national-id/
The Excited States of America: if it’s worth doing, it’s worth overdoing.
The US already has a national ID for citizens who travel outside the US — the passport. I don’t think it will be long (maybe 2014) before the requirement for US citizens to present a US passport for entry to the US will be strictly enforced. For those of us who hold Canadian or other passports showing a US place of birth, a problem will face us at the US border. The non-US passport will no longer be enough to gain entry to the US as a visitor. Either we will have to present a copy of a CLN to prove that we are NOT US citizens, or we will have to present a US passport to prove that we ARE US citizens (with all that that involves). Otherwise, we shouldn’t plan to go there at all.
Seems that Schumer isn’t getting as much attention over this temper tantrum as he did last time around. A few places have reprinted his press release, but other than that the only actual piece of writing I’ve seen on it is Brian Mahany’s piece:
http://taxconnections.com/taxblog/fbar-fatca-debate-gets-ugly/
@AnonAnon,
I like your last suggestion the best, just don’t go there at all if you can avoid it.