I often find myself in discussion with some Homelanders and Obama supporters about whether US citizenship-based taxation is a human rights abuse. Below is my argument, first published August 21, 2012, to say that it is unfair. Now I argue that with the implementation of FATCA, the USA has become a serial human rights abuser. Clearly, most people of reasonable conscience accept these kinds of arguments. Even yesterday, I manage to get a chuckle out of an AP reporter who was asking for my story. I mentioned my birth in Chicago, Illinois, and moving as a baby to Alaska. Off the cuff, I said, “Yet Illinois isn’t chasing me around the globe expecting me to pay state income tax.” That’s because once you leave a state, you can no longer benefit from the proceeds of taxation. It is a no brainer. Yet it is not self-evident to Congress and the IRS, which are pursuing US expats across the globe with FATCA regulations in order to make them pay taxes for the benefit of Homelanders.
Many Homelanders are a special breed of bigot who believe that you live abroad so that you can shirk your responsibility to pay for their Social Security, their Food Stamps, their welfare, and their wars across the globe. Well, I for one am sick of this unfair treatment. We pay taxes in our countries of residence, and in Canada in particular, our tax burden is already much heavier than what Homelanders pay. So it is really time to emphasize that Citizenship-Based Taxation is a violation of the fundamental principles of Western democracy, and it is a human rights abuse.
Fair tax, unfair tax: or When is it paying my fair share?
by Peter W. Dunn
In studying historical tax rebellions, I have observed that governments have frequently been ready to commit mass murder in order to maintain their tax hegemony over a people. South Korea committed mass murder against the poor tax revolters on Jeju Island, who rose up in rebellion in 1948; Californians rode out to suppress the Indian tax revolters in 1851; Britain waged war against American colonists who unilaterally declared a permanent tax holiday from King George; the Romans razed the Temple at Jerusalem and crucified the anti-tax zealots in the Jewish War of succession in AD 66-70. Even George Washington, the beloved president who cut down the cherry tree but could not lie about it, personally led the troops against the Western Pennsylvanian tax protestors in the Whiskey Rebellion. No nation which wants to be taken seriously can ever allow a tax revolt. That’s why Irwin Schiff, father of investor Peter Schiff, rots in a Federal prison.
There are lessons to be learned from these examples. The revolts in question in every case took place because the protestors felt that the taxes were unfair. If the tax really is unfair, then protestors will revolt in large numbers, forcing the taxing authority to act. So I’ve decided to point out some aspects of fair taxes which people are willing to pay, compared to unfair taxes that leads to tax revolts.
Fair taxes seem to me to have the following characteristics:
- A fair tax is not onerous and well within the ability of the citizen to pay.
- A fair tax is part of democratic process in which the citizen has a right to vote for a local person who represents the taxpayer’s area in a legislative assembly. Representation in the legislative assembly is also proportional to population.
- A fair tax is proportional, i.e., charges all citizens proportionally to their means and not disproportionally.
- The proceeds of a fair tax must benefit the community of which the taxpayer is a part.
- Penalties for failing to pay a fair tax are proportional to the crime and the damage to the government which claims a right to collect taxes.
The following are characteristics of unfair taxes which will lead to revolt:
- An unfair tax is taken without local representation in a legislative assembly that makes tax law.
- An unfair tax is disproportional and onerous.
- An unfair tax does not benefit the community of the taxpayer but rather, it benefits the needs of others.
- An unfair tax is a weapon to destroy the taxpayer’s community or to make sure that that community never rises in prominence or wealth.
- An unfair tax comes with stiff penalties for disobedience–penalties which include destitution, detention, and death.
- An unfair tax results in the alleged protector becoming the chief enemy and persecutor of the taxpayer.
As any casual observer can see, the United States taxation of its expats fits the description of unfair taxes that I here provide. (1) It is done without local representation; (2) it is disproportional and onerous, not taking into account the taxpayer’s other tax burdens–e.g., Canadians already pay about 50% of their income in Federal, Provincial and Munipal taxes–including taxes for which there is no foreign tax credit (GST/HST); (3) it is done for the benefit of Homelanders not for the communities of the expats; (4) it unfairly taxes the expat’s home countries tax bases to the weakening of those countries for the benefit of the profligacy of the United States; (5) the penalties for failure to comply with US extra-territorial taxation may result in the detention and destitution of the taxpayer–it often leads the taxpayers to renunciation of citizenship, and can even result in exile [Reed Amendment] or death, if the taxpayer commits suicide or resists arrest; (6) The United States has made itself the chief enemy and persecutor of expats.
Historians seldom look back favorably upon regimes that institute unfair taxation. History is now in the making. Will the United States continue down this path of demagoguery and despotism? Will it commit total annihilation of its own expat community through a form of Expat Cleansing which forces all Americans abroad either to renounce their citizenship or return to the homeland? I think so. I see no real signs that this situation will change but only that it will get worse. I hope that I am wrong. Historians will remember this generation of leaders in the United States under a very dim light, and the Isaac Brock Society will be a primary source for their understanding of this period.