Shadow Raider made the following comment:
Due to the extreme difficulty in having a decent discussion about CBT with Congress, I decided to start a plan B. I’m not abandoning the RBT proposal, but I see that it’s going to take a long time, so I came up with an alternative that may work in the meantime. I’ll explain it below.
In US law, nationality and citizenship are not exactly the same thing. Citizenship is actually a subset of nationality, so all US citizens are also US nationals, but it is possible to be a US national without citizenship. Such status was historically created for people in US territories, and today it only applies to American Samoa.
What is interesting is that the alleged “benefits of citizenship”, often mentioned as the justification for CBT, are actually benefits of nationality. US nationals without citizenship also use a US passport, receive US consular protection, and they can enter, live, study and work in the US without restriction. They can also apply to become US citizens, if they wish (after residing in the US for a short period). The only rights specifically for citizens that I’m aware of are the right to vote, to work in US government jobs, and to sponsor foreign relatives to immigrate to the US. US nationals without citizenship also transmit their status to their children born abroad.
What is also interesting is that the US tax code mentions US citizens all the time, but not US nationals. US nationals without citizenship are taxed as aliens, so they are taxed on worldwide income (and are subject to reporting requirements on foreign assets) if they reside in the US, and are taxed only on US income (and are not subject to reporting requirements on foreign assets) if they don’t reside in the US. Basically, they are subject to RBT. There is no “nationality-based taxation”.
And what is even more interesting is that US law only allows renunciation of the entire US nationality, which includes US citizenship, but not just the citizenship. That’s why the document that renunciants get is called a Certificate of Loss of Nationality.
You may have realized where I’m going with this. My proposal is to allow people to renounce only US citizenship while retaining US nationality if they wish. I suppose many Americans abroad would like this option, as they would get rid of CBT, FBAR, FATCA etc. but would keep a US passport and the ability to return to the US at any time and even to become US citizens again later. They would still be subject to the expatriation taxes but not to the Reed amendment, because they would become aliens under the tax code but not under immigration law. The option would be totally voluntary, of course.
I know that this proposal is not nearly as good as RBT, and it would not work for people like calgary411′s son. But it’s a sort of temporary solution, and I believe it would be much easier to implement and to gather support in Congress. It would consist of only a small paragraph to be added to the section of law that deals with renunciation (I already wrote a draft), and it would not touch the tax code at all. It would completely avoid the Ways and Means and Finance committees and the heated debate about taxes, and would satisfy those who stubbornly want to keep the tradition of CBT.
I would like to contact some congressmen to see if they are interested. The American Samoan delegate would be a good start, as he is aware of the subject and recently stated that citizenship should be a choice. Also, his constituency is very small, so he may be more accessible than regular congressmen.
What do you think? Is this idea too weird, or it is worth a try? If you had the option, would you renounce US citizenship but keep US nationality?
@FromTheWilderness, You’re not stupid. I had taken a look at those documents and noticed it too. I also noticed how the Foreign Affairs Manual uses citizenship and nationality mostly as synonyms, and only briefly mentions that there are also some nationals without citizenship. In my opinion, the forms should be more clear, but it doesn’t surprise me that they mix the two terms. Anyway, the Department of State can do this because indeed it is not legally possible to relinquish or renounce US citizenship and keep US nationality. My proposal would require a change in the law to make it possible. If so, the Deparment of State would change the forms accordingly.
This is a reply from John Baird, Canada Minister of Foreign Affairs, to one of my letters. He responds on March 11 2014 (rec’d today March 18) to my October 15 2013 letter of complaint re: FATCA.
Note that Baird’s stated government policy objective for the FATCA IGA between U.S. and Canada does not mention any benefit for Canada.
I chose this thread because Baird happens to refer to me as a U.S. “National.”
Mr. Baird says:
Pingback: The Isaac Brock Society | From Shadow Raider on December 17, 2014: “Constitutionality of citizenship-based taxation”
Some interesting insights/questions about relinquishing vs renouncing, asks why one isn’t given a Certificate of Loss of Citizenship instead of a CLN.
“We are informed that the Fourteenth Amendment to the US Constitution does not provide any procedure for revocation of United States citizenship. Under the Supreme Court precedent of Afroyim v. Rusk, loss of 14th-Amendment-based U.S. citizenship is possible only under the following circumstances:
Fraud in the naturalization process (technically this is not loss of citizenship, but rather a voiding of the purported naturalization and a declaration that the immigrant never was a U.S. citizen). Voluntary relinquishment of citizenship. This may be accomplished either through renunciation procedures specially established by the State Department or through other actions which demonstrate an intention to give up U.S. citizenship. Such an act of expatriation must be accompanied by an intent to terminate United States citizenship.
Why would someone need to declare intent to terminate US Citizenship IF they are relinquishing nationality or otherwise phrased: Why differentiate the two if they are in deed legally synonymous? Or are they? Remember that in this context expatriation refers to nationality and one would conceivable need to request termination of citizenship as an independent and distinctly separate matter.”
I’ve looked up the Statement of Understanding form one has to fill out when relinquishing. It mentions nothing about citizenship, other than issues regarding statelessness, where it’s treated as synonymous with nationality.
All americans born in one of the 50 States are protected by the US constitution. They are american nationals, not statutary US citizens of Washington D.C.
American nationals are not subject to income tax.
Point period finished, end of story.
Watch “America from freedom to fascism” on You Tube.
The feds just have to obey the law of the US constitution.