Orrin Hatch, as you may remember, was one of the first Republicans to speak out in favour of the Ex-PATRIOT Act in 2012; Bloomberg News quoted him as stating, “it always bothers me when somebody renounces his citizenship in the greatest country on Earth just to save money, save taxes” (or save themselves from emigrant-only $13,000 fines on $21-per-year tax deficiencies). Now, not willing to be outdone by the Ex-PATRIOT Act sponsors who are once again proposing permanent exile for people who dare exercise their human right to move to another country and live there until they qualify for naturalisation, Hatch made the following comment in a speech on the Senate floor. At page S4389 of the Congressional Record for 12 June 2013:
When a citizen decides to leave the United States and renounce their citizenship, they often face taxes on income earned in the United States and on any gains from appreciated assets. Is it punitive to apply a similar standard for those seeking U.S. citizenship? Think about that: When a U.S. citizen decides to leave the United States and renounce their citizenship, they often face taxes on income earned in the United States and on any gains from appreciated assets. That is not punitive. The answer, of course, is that it is not punitive.
The context of Hatch’s comments was a speech claiming that his amendments relating to taxation and healthcare coverage for registered provisional immigrants were also “not punitive”. Hatch’s facile description of the exit tax is not accurate, making one wonder whether anything else he says to justify his policy proposals is: under the half-decade-old HEART Act, the tax on ex-citizens is applied not just on “income earned in the United States”, but current unrealised non-U.S. capital gains, including capital gains on a house whose purchase was funded in the first place by non-U.S. wages used to qualify for a mortgage from a non-U.S. bank protected by a non-U.S. mortgage guarantee scheme, all under the laws of a non-U.S. government. I suppose he thinks that punishing people who renounce citizenship to save their mortgages is entirely appropriate anyway. Apparently Hatch hates anyone who dares to leave his birth country and pursue a better life elsewhere, whether they move to the United States or away from it.
Orrin is one that has received the letter from ACA outlining the IRS abuse of American’s Abroad, so he can not be ignorant of the impacts of his administration’s offshore jihad. He must be another of those Congressman, willfully blind to the actions of Congress and how it leaves many with no choice but to renounce.
I would say, he literally has no conception of the factors that motivate people to emigrate to other lands, and what drives decisions to give up U.S. Citizenship. In the scope of the recent IRS “name and shame” lists, how many actual bonafided known cases of emigration have there been just to avoid taxation?
There certainly has been renouncing to shed the shackles of complex citizenship tax filing requirements and penalty risk, but that is very different than the meme he talks about.
Where is the classical media stereotype image of a person who one day wakes up and makes a decision to leave America and renounce for taxation reasons, knowing they will be hit with a huge exit tax? Is this all just a straw man of Orrin’s mind?
Frankly I can think of more folks that feel trapped in America now, shackled to the homeland by its tax policy, rather than leave for Taxation purposes. I am surprised that he isn’t celebrating this great victory of stopping mass emigration.
Just this morning on CNN, Christine Romans was discussing how someone like Snowdon was allowed to move up the chain into the position he held within the Industrial Security Complex, and mentioned that in the process anyone would be scrutinized for having spent a great deal of time abroad.
Forget about cold wars with any particular country, the US appears to be embarking on one with the rest of the planet.
It is important to understand why he says, “It is not punitive”. A law that punishes is a bill of attainder. This circumvents the courts. To exile expatriates via legislation as Chucky has suggested doing is indeed punitive and therefore unconstitutional. But do these folks care about the Constitution? It is a document that is supposed to protect the people from the overreach of the executive and legislative branches of the Federal government, but these people will pass laws and the rest of us can only spend a few millions of dollars to challenge it in court if we disagree–courts stacked with people agree with them.
Let’s face it. Either expatriation is a universal right or it is a crime. Why don’t they just pass a law making it illegal to expatriate? Then the contradiction with Universal Rights will be clearer.