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?
@ShadowRaider, you are so creative with exploring work arounds! And that is quite interesting about the difference between “US nationality” and “US citizenship”. I think that what you propose would be interesting to those who don’t want to make a clean clear break by renouncing.
My only caveat:
The US could still decide that any such move would ‘allow’ too many residing abroad not to be ‘US taxable persons’ on their non-US assets and earning abroad, and would be stubbornly stuck on the idea that the result would be millions abroad ‘not paying their fair share’.
Or, perhaps they’d decide to try and get rid of the category of ‘US nationals’ like that of the Samoans, so it might backfire if it received more attention?
Thank you as always, for sticking with us, and for expanding such Herculean efforts and time and energy in what must have come to seem a Sisyphean task.
Interesting and certainly worth investigating though I don’t know that it will fly as long as the USG sees citizens aboard as piggy-banks to be pilfered as the need for money is the root cause of all of this nonsense.
Would I retain nationality if I could give up just the citizenship? I don’t know if I would want to. The USG is always changing its rules and retaining nationality still – in their eyes – obligates me somewhat and in my eyes it still renders me less than a whole Canadian, which I wouldn’t like.
I would prefer that the USG adopt the stance that Canada does that you can declare yourself a non-resident for tax purposes without having to do anything else but that isn’t going to happen because – as I said – this is about money and a govt that is drowning in debt – and anywhere, I am weary of my homeland with its bat-shit crazy. I want the right to leave it all behind me.
I think it will be at least a decade before the U.S. goes to RBT if even then. This proposal may seem more workable for some in the U.S. government. No one there wants to be seen as the one who is campaigning for RBT. That’s just the reality. Perhaps this needs to be done in smaller steps.
ACA proposal was excellent and yet they just ignored it. They asked for RBT to begin after five years not living in the U.S. and had other restrictions. I think we can see from the lack of response to that proposal in the U.S. that this is not going to move any time soon.
DA’s proposal was to change the definition of “off shore” or to a bank which is not in the country where the person lives. This would have avoided needing to go to RBT fully.
I don’t see any harm in trying your proposal at all. Yes, I’d likely keep nationality. I have a lot of family there and don’t like or trust the Reed proponents. I need to be able to travel there just as any other Canadian for the rest of my life and furthermore should something happen to my spouse I might have at one time considered moving in with my brother there or sister should I need to do so. I cannot do that now so an option whereby I could have done so would have taken away a lot of worry.
I like this idea as a first step from their side.
While I would hardly want to discourage creativity, I would personally leaven it with reality (or realism, but that doesn’t rhyme). Today’s Financial Post has an interesting article about the trillions (yes, that is plural) of corporate profits that are stranded off-shore by short-sighted US tax policy that is ultimately self-defeating. US businesses operating abroad are only subject to double taxation if they bring their profits into the US. So guess what? Being rational, they don’t. Domestic politicians rail against this as unpatriotic and then threaten to remove the “exemption” that allows this to happen. They quickly realize that this would simply (i) accelerate the rate at which US multinationals are “off-shoring” (Chiquita just left – we owe the 1996 punitive expat laws to another off-shoring episode in 1994); and (ii) put “patriotic” US businesses at a huge competitive disadvantage relative to non-US companies who only pay a single level of corporate tax. The latter point needs understanding. Samsung only pays US tax on US profits – Apple, in a perfect US-dominated world – would be paying tax on profits in each country PLUS profits worldwide to the US subject to less than complete credits for foreign taxes paid. In the end result, Apple would be permanently handicapped in competing with Samsung until it finally gave up and paid the exit tax to incorporate itself in Ireland or somewhere else. Congress at least gets that idea through their dim heads but they can’t get enough support for any tax reform to allow the trillions banked worldwide to be put to work in the US if the US is the best place to put that money to work (which they would like to believe it is). In short, failure to address tax reform due to internal bickering and party politics (this is NOT a party issue, just common sense) results in self-defeating and ultimately harmful policies being perpetuated.
While the expat community in Canada and elsewhere is hardly in the same league as Apple, Microsoft et al, the tax policies that oppress them have similar counterproductive and harmful impacts in the “homeland”. Some of the million or so expats in Canada will have somehow managed to be successful despite living away from the sun. Some of them may even be inclined to invest some of their savings in the US, buy a secondary home (thereby supporting soft real estate markets) or even move back to the States with their savings (bringing with them any vested Canadian pension entitlements, by the way). Win win all around (except I guess for Canada). Most of them will now forever be deterred from even considering doing such a thing. If the ring of oppression grows, they will strike the US off holiday destinations (further loss of revenue for the US) and basically avoid the US like the plague that it is becoming for them. The injustice rankles all, but the irrationality of it – the US benefits not a whit from such self-inflicted wounds – is bizarre. It won’t change because reason does not rule politics or politicians where it is disconnected from electoral concerns. Like it or not, there is just about nothing the tiny expat world can do to influence US domestic policy – the Court challenge has a far greater chance of doing that because it will put a stop sign in front of a runaway xenophobic freight train that US politics has launched.
While on the topic of simple ideas – I have LOTS of them, but they have no chance of going anywhere because nobody cares. For example, a flat tax of say $500 per year to maintain citizenship abroad. Any non-resident (and there is a LOT of law about what that means in the rest of the world – you have to actually move with the intention of remaining there for the foreseeable future, severing most if not all ties to the US) could elect to pay the flat tax or file the whole 1040 nonsense if they think they can save money doing that. I guarantee that would raise FAR more revenue from abroad than they will ever get from this FATCA nonsense and would be less than what many expats are now paying accountants to do their US taxes. Admin cost of this would be about zero. Goodwill gained – huge. Potential to get political traction: zero. Idea two – allow people to simply send in their domestic tax return to the US if they are permanent residents of a tax treaty country. You would just sign the 1040 with “see attached” and attach the Canadian return. Then all they’d have to do is a more realistic effort to marry up the two systems and decide what if anything is validly taxable in the hands of non-residents (I have trouble imagining what, apart from US source income of a non-resident which the treaty already deals with).
In short, all they would have to do to fix this was WANT to fix it. It is clear there is no political upside in the US to paying attention to this issue and lots of political points to be made vilifying fat cat tax cheats. IRS bureaucrats will continue to simply do what they imagine they are being told to do with the vague and ill-thought out laws they are given and if that means persecuting and exiling a million Americans, they are little different from the Eichmann’s of a different age. They will “just follow orders” and do so zealously to the limits of their inherent laziness and lack of resources. That interview posted on this site with the former IRS guy who has laughing about drafting the regs to enforce the Reed amendment and having no idea that “Accidental Americans” even existed is an eye-opener. They have no more regrets about stepping on expats than they do about squashing an ant. They are barely aware they exist and certainly don’t consider them as deserving of even a moment’s thought.
All is not bleak. Personally, I have never wanted to go “back”, only vaguely regret that unlike other Canadians I am precluded from buying condo in Florida or Arizona, but I’ll get over it. Mexico and Costa Rica aren’t so bad and besides, I’d have just lost my shirt if I had bought one! The court case is highly likely to bring sanity to bear on this situation. So just sit tight and let the courts do their job. They will get it right.
@Petros, thank you for copying my post to a new thread. I did some more research, and it seems that originally there was no US nationality, just US citizenship, and that’s why the constitution only mentions citizens, not nationals. The problem started when the US acquired Puerto Rico and the Philippines after the Spanish-American War in 1898. The people in these territories were previously Spaniards, but the US didn’t want to give them US citizenship (apparently due to racism), so they became stateless. The issue went to the Supreme Court as part of the “insular cases”, and the court ruled that since these territories were now under US sovereignty, these people automatically had to receive US nationality, but US citizenship was not guaranteed because the US constitution didn’t fully apply there. My impression is that the court “invented” the distinction between nationality and citizenship at that time, as a solution to avoid statelessness but still not confer citizenship, and Congress wrote it into law. After several decades, Congress eventually gave citizenship to people in the territories, except American Samoa (and the Philippines, which became independent).
Now, a small group of American Samoans are suing the US government, trying to revert the decision in the “insular cases”. They say that the status of US national without citizenship is discriminatory and unconstitutional, so the citizenship clauses in the constitution should apply to the entire US equally, including all territories. However, the American Samoan delegate and the governor both oppose this lawsuit, because they say that it would conflict with local Samoan law, that citizenship should be voluntary, and that American Samoans are already allowed to apply to become US citizens if they want, on an individual basis (they have to actually move to a US state to do that). The first court ruled against the plaintiffs, but they appealed and now the case is going to a higher court. Some commentators are expecting that the case will eventually go to the Supreme Court, which will probably rule for the plaintiffs because it seems that the judges have said something about reverting the “insular cases” recently. The public opinion in the US is almost entirely in favor of giving citizenship to American Samoans, because they have no idea about the problems of US citizenship and think that it is always beneficial.
If the expectations are correct, and the Supreme Court gives citizenship to all American Samoans automatically, the delegate will not like it. And that’s where my proposal will get on track. He would probably want to allow American Samoans to regain their previous status, if they wish, and a practical way to do that is to renounce US citizenship and keep US nationality. In fact, people from the Northern Mariana Islands had the option not to become US citizens when the islands became a US territory in 1986. So for totally different reasons, with a bit of political game, there is a reasonable chance that my proposal will be passed.
Regarding your concerns:
1. Possible loophole for wealthy US residents to avoid taxes by expatriating without losing US nationality. Not really. They would still be subject to the expatriation taxes, which more than compensate tax avoidance. Besides, they can already do that by moving to Puerto Rico, without the expatriation taxes, and I haven’t heard of anyone who did it.
2. Possible backfire against Americans abroad “not paying their fair share”. Not really either. First, the vast majority of Americans abroad already don’t owe taxes to the US due to FEIE and foreign tax credit. Second, they would no longer be citizens and would not have the right to vote. People in the US consider this a fundamental difference. And third, Congress doesn’t care about Americans abroad either way, it just ignores their existence.
3. RBT. Yes, I agree that RBT is the real solution, but from the recent developments, I also believe it will take at least some years for them to accept it. Maybe next year things will be different, after Carl Levin and Tom Coburn retire. Maybe we’ll have to wait until Chuck Schumer retires too.
Since you liked my proposal, I’ll go ahead and request a meeting with delegate Eni Faleomavaega (D-AS). I hope I pronounce his name right 🙂
@Anne Frank wow did you hit the nail on the head with your above post.
“Some of them may even be inclined to invest some of their savings in the US, buy a secondary home (thereby supporting soft real estate markets) or even move back to the States with their savings (bringing with them any vested Canadian pension entitlements, by the way). Win win all around (except I guess for Canada). Most of them will now forever be deterred from even considering doing such a thing. If the ring of oppression grows, they will strike the US off holiday destinations (further loss of revenue for the US) and basically avoid the US like the plague that it is becoming for them.”
and
“I am precluded from buying condo in Florida or Arizona, but I’ll get over it. Mexico and Costa Rica aren’t so bad”
describes my situation to a T. my wife and i were making plans to buy a small place in a town in california we had spent quite a bit of time in and fell in love with it as a winter destination for us.
guess what …. no more…. we were good for usually each year a couple of long weekend trips to the states and a longer week to 10 day trip every year. we are now going to be tourists in our home province for those long weekend trips and will be flying to a sunshine destination for the longer week plus trips.
we will never be setting foot in america again. their loss is the rest of the worlds gain.
Shadow Raider,
I’ve learned more from you than any US schooling I had. BTW, not one person I’ve asked (but I’m sure there are some and perhaps you) learned about citizenship-based taxation in high school — where one would think that would be in curriculum. If citizenship-based taxation has so many consequences for people, it should be a course all on its own and required for graduation.
Good luck on the pronunciation of Mr. or Ms. Falemavaega (sounds quite lovely the way my mind attempts it).
As always, thank you for all you contribute on our behalves. Wow!
Anne Frank and mettleman,
It all boils down to good old “Common Sense”. I’ve not seen any!
@AnneFrank
Please go on a crusade with what you have written here. If ANYTHING could get through the thick skulls of american politicians- it could be what you have written above. This is absolutely what matters to them and the only argument which could also hold water for them. Please let as many people know as possible- because your words are so distinct and so clear. Get the word out to Rand Paul and politicans who have a voice that might be heard in Washington. Hell- send a copy of what you have just written to Schumer as well.
As for nationality – I for one certainly do not want to be a member of a club that wants to screw me so royally. What they are doing to expats is an abomination- it is greedy and callous and selfish and inhumane. Now why would I want to remain a member of that club?
@Shadow Raider, your proposal makes great sense. As I understand from Indian expats, they have a system whereby those moving abroad can give up their obligations to file and pay income tax on worldwide income if they apply for an in-between status whereby they relinquish their rights to vote (and I believe directly invest in property) but can still choose to move back of they want to. It’s similar to relinquishing the full rights of citizenship while retaining the rights of nationality to still reside in India but with the advantage of no longer having the full obligations that full citizenship brings.
If I’d been offered that option of retaining my US nationality in spite of renouncing the US citizenship, I believe I would have chosen to do so as a middle way. It would have released me from the compliance burdens while still ensuring I’d continue to be able to safely visit or even live with family.
It occurs to me that of my much older husband dies before me, as a widow without any children in Britain, I may grow to deeply regret that I renounced, especially as I might have found comfort in knowing that my niece could have taken me in had I become very dependent and frail. The UK admittedly doesn’t treat it’s elderly all that well.
I believe it was @Anne who mentioned the option of being allowed to retain full citizenship and be taxed as an alien with perhaps an annual charge of $500 which I would have been willing to pay in order to retain the privilege to return.
While waiting for the US to adopt RBT like the rest of the world … the proposal of an embassy/voting tax for non-resident US citizens, instead of filing the whole 1040 etc., would be my first choice. The US government must have realized by now that a flat tax would bring in more money than processing revenue & bank documents of US persons residing abroad who don’t earn enough to pay income tax to the US.
If this simple idea is not accepted by US government, I’d support the US nationality proposal, even if it means giving up the right to vote. This would also be the best solution for our dual-national children, “accidental Americans”, with no ties to the US.
Thank you for this initiative!
@ Shadow Raider
I can see this being a nice comfy deal for some but when my husband took the carefully considered step of becoming a Canadian citizen he was absolutely certain he would hold allegiance ONLY to Canada from that point on. If he ever decides to return to live in the USA (after I’m gone) he is prepared to make an application and stand in line like everyone else to get whatever documentation is needed to make that possible. The chances of him wanting to return are pretty much nil though. It’s just not the place he wants to live in. My own situation is even more definite. I will never go there, not even to visit.
“Chiquita just left”
Obama’s gonna starve
Someone mentioned a change to RBT is 5 years away. In my opinion we should be praying for total economic collapse in the US I know I am. It’s happening already. History shows all empires that got too big collapsed from its own weight. The USA simply won’t last till the end of the year if I’m right.
http://www.infowars.com/deluded-currency-cultists-believe-the-dollar-is-invincible/
@calgary411, Of everything that I explained on this page, the only thing I learned in high school was the Spanish-American War. In college, I had a required civics class where I learned the general principles of US government, the constitution and some Supreme Court cases. The rest I just learned on my own reading stuff in books and online. I stumbled upon CBT when I was reading the instructions for my tax return. There was a sentence saying that citizens are taxed the same way regardless of where they live. I thought it was strange, but I saw that there was the FEIE and the foreign tax credit so I assumed it was just a matter of filing annoying forms. Later, I found out about FATCA, FBAR, OVDP, all those other “foreign” forms, expatriation taxes, Reed amendment, and that no other country uses CBT besides the absurd case of Eritrea. I had no idea. Then I realized that the whole thing was just wrong.
@monalisa, India, like the rest of the world, taxes based on residence. When Indians move out of India, they stop paying taxes and filing to India, regardless of their citizenship status. What you described is something else, called Overseas Citizenship of India, which has nothing to do with taxes. India doesn’t allow dual citizenship, but many Indians abroad complained that they wanted to naturalize where they live while keeping the option to return to India later. India responded by creating the Overseas Citizenship, which is like a “supervisa” for former citizens. The person can enter, stay, study and work in India without restriction, but cannot vote or invest in agricultural property. Unlike a visa, the status does not expire.
@Anne Frank, Jayne, I think the flat tax is a good idea, even from the government’s point of view, because many people would prefer to pay $500 in tax with no forms instead of $1,000 to an accountant and no tax. Everyone wins (well, except the accountant). The problem is that this flat tax may be unconstitutional. The constitution prohibits the federal government from imposing a “capitation tax” without apportionment among states, and apportionment of taxes on people is impractical. Maybe it would be allowed for Americans abroad because they are not really part of a state, but I’m not sure.
Anne Frank you are one amazing person. I see the USA as trying to swindle anyone with US Nationality out of their savings and lifetime achievements. This will soon stop.
Can I safely assume that our esteemed team of lawyers and professionals working so hard for us have a direct inside line to Rand Paul? This should not be hard to accomplish?
@Shadow, Thanks for explaining how Indian Overseas Citizenship works as essentially a super visa without expiry. I would have even been willing to pay an annual tax of $500 to continue enjoying the unconditional right to return.
It thus seems obvious that the US views it’s former citizens, especially renunciants, as apostates. The way they’ve made renunciation irrevocable plus with the added risk of the Reed Amendment proves they treat expatriation like a divorce.
And by the way, an annual accounting bill of $1000 would have been just about liveable but not the $3000 I would have been lumbared with!! It’s also obvious that the compliance industry gains from using IRS complexity to leech us, even lobbying Congress for even more loopholes and complicated laws to force expats to rely on them.
monalisa,
You should have the right to return as any other citizen of the country you live in. http://london.usembassy.gov/rctour.html
I think you should make the proposal to Senate Finance, Ways and Means, and Rand Paul. Of course the best solution is RBT but this would at least get us closer with relatively little change to existing law.
@ShadowRaider
Do US “Nationals” who renounce “Nationality” show up on the name and shame list and are they subject to the Reed Amendment?
@Calgary, of course but only for short visits of less than 90 days on visa waiver unless I apply for a visa. Don’t think they’d allow me to stay indefinitely to take care of an aging parents, etc., as this could be deemed a form of work; By renouncing, I’ve thus given up any further rights to work in the USA.
The Overseas citizenship would be a decent compromise whereby I could still enjoy the right to live in the US, not just visit (which is still not guaranteed if they wanted to start enforcing the Reed Amendment ). Of course I should enjoy the same right to visit as other British citizens but who’s to say that they won’t always look upon renunciants unfavorably?
@Tim, The renunciation of nationality is the same process for any US national, whether US citizen or not. They all get a CLN. Section 6039G tells the Department of State to send a copy of every CLN to the IRS, and tells the IRS to publish the names of people losing US citizenship. If the CLN specifies if the person was a US citizen or just a US national, the IRS is supposed to list only the names of those who were US citizens. But as we know the IRS does a poor job with the lists.
The Reed amendment bans people who renounced citizenship to avoid taxation, so I suppose it would not apply to US nationals without citizenship who renounce nationality. And that wouldn’t make any sense, because US nationality is irrelevant for taxation.
@shadow – Not going to waste my mental energies worrying about whether a flat tax would pass constitutional muster. The concept would be an income tax at its base (the ordinary one) with an election to pay the flat tax in lieu, and is a direct tax that ought to be covered by the 16th amendment in any event. I’m sure they could find a simple way to make it work if they wanted to. As lots have said, there is simply no political will (Rand Paul notwithstanding) to tackle these issues. They don’t care – expats are like the Who”s in Whoville in Dr. Suess’ book “Horton Hears a Who”. Politicians simply can’t hear them, can’t relate to them and can’t be bothered to take the time to figure it out. The list of things that they need to fix is as long as their arm already and they know they can’t get anything done anyway. None of this is going to help them raise money for the next election, get federal money for their district, make their opponents look like turkey’s etc. Good policy takes brains, integrity, intelligence – well, you get the picture, these are not the qualities habitually found in career politicians in Washington.
That being said, I’m pretty sure the existing expat taxes (JOBS and HEROES acts in particular) by and large do NOT stand close examination under US law either. Under the Immigration and Nationality Act, (s. 349) expatriation is automatic upon swearing allegiance to a foreign power with the intent to relinquish. I recommend everyone do it as often as they like! The test is purely subjective, but in theory you can do it twice a day.
The Tax Code (I think it is s. 877 and the fact I am starting to remember these citations is profoundly disturbing!) has added provisions which in effect deem you to be a citizen even when you are no longer legally a citizen. If you impose an exit tax on expatriating Americans, by definition, they are not Americans at the point they are being asked to pay the tax. They can say the effective date of expatriation is when the Secretary of State is notified and all the taxes are paid, but it doesn’t make it so. You all know this to be true since the State Department will happily hand out CLN’s to people dated as of the date they did the deed without regard to IRS timing in s. 877. The Tax Code does not trump the INA or the Constitution as far as who is a citizen. They can deem you to be American till the cows come home but if you swore allegiance to the Queen and became Canadian and are prepared to swear an oath that you did so with the full and knowing intention to relinquish any claim to US citizenship, the job is done. From that point forward, tax code or no tax code, you can’t have a passport, can’t vote or otherwise do all the things citizens can do. Since at that point you are by definition out of the country and not American, I would love to see the legal analysis that confers jurisdiction to tax people who are not present in the United States (and may NEVER have been in some cases) for the privilege of having ONCE been American. It’s an interesting point that somebody will doubtless raise some day, but I’ll leave that for the likes of Savarin who can afford to do such things.
Let’s be realistic – the chances of any major concessions seem remote. By my reckoning, the US has made 3 very minor concessions in the past few years:
1. The streamlined disclosure program.
2. Raising the reporting limits for individual aspects of FATCA for non-residents USPs from the $50k required of US residents.
3. Maybe my imagination, but I haven’t heard any new OVDP/I horror stories lately.
All these actions were taken administratively without Congressional approval. Certainly they could do a lot more to loosen the chains without passing any new laws. But they don’t. Which should tell us something.
I think the issue that some elements in the current U.S. government have created is an unconstitutional attempt to create a second class of U.S. citizenship and call it “U.S. Person”. As most of you know, U.S. citizenship is defined by the 13th amendment to the Constitution. The 13th Amendment does not contemplate different classes of citizenship, each having different rights and privileges. The U.S. government is attempting to treat non-resident U.S. citizens as though they are a second class of citizen. How is this manifested? The U.S. government is taking the posture that we Americans resident in Canada should be taxed as though we are resident in the U.S. At the same time, the U.S. government does not extend to non-resident Americans the same level of financial support services and other services that are extended to Americans resident in the U.S. In order to avoid its conflict with the U.S. Constitution, this government would have to establish staffing and infrastructure sufficient to serve Americans resident throughout the world, on the same basis as Americans resident in the U.S. This will be very costly for the U.S. government. The only way to move back into conformance with the Constitution–if the U.S. is not going to staff up and build infrastructure around the world to serve non-resident American citizens who are being taxed under the same rules as resident Americans–the U.S. will have to drop it’s CBT. The cost of providing equal services to citizens abroad–in order to justify tax them on a resident-in-U.S. basis is probably what has persuaded every other nation to not engage in CBT.
My suggestion is that a few of us work together–I am willing to assist in whatever way I can–to prepare a presentation to the American Civil Liberties Union (ACLU) for the purpose of persuading the ACLU to take up this case. It is a very dangerous first step when individuals within a government are not challenged when they begin to make policy that operates on the premise that all Americans do not have equal rights and privileges. Today, non-resident Americans might be targeted to be split off from other Americans and treated differently. If this goes unchallenged, there’s no reason to expect that some other premise could be used to create yet another class of U.S. citizenship (if it strikes a sitting government’s fancy to do so. Quite simply, the U.S. government cannot legally use policy to create a new class of citizenship (“U.S. Person”) and place on those citizens the same obligations placed on resident Americans, while the government does not provide the service to non-resident Americans that it does to Americans resident in the U.S. If the definition of U.S. citizen is to be changed, it must be done through the means of a change to the 13th Amendment to the Constitution, not through policy.
If you are interested in working with me to prepare a presentation to persuade the ACLU to take up this case, please email me at mstrunorth@gmail.com.
Sincerely,
Susan Ouderkirk