According to a post on the Democrats’ Senate Floor Twitter feed, 78 Senators voted in favour of Orrin Hatch’s Trade Facilitation and Trade Enforcement Act (S. 1269), which includes the passport revocation provisions discussed yesterday: to revoke passports from people with US$50,000 of unpaid taxes & fines, or people who never obtained or do not provide a Social Security number.
In November 2014, American Citizens Abroad issued a position paper explaining why passport revocation is an inappropriate and dangerous means of tax enforcement. Patrick Weil, in a Yale Law Journal article, has detailed the long history of abuse of the administrative power to revoke passports. And, as stated here previously:
Due to the U.S.’ sharply harsher penalty structure on under-reporting of similar assets & items of income simply because they’re located in another country, it’s likely that a disproportionate number of victims of this bill would be U.S. citizens in other countries. Hatch is the chairman of the Senate Finance Committee and the most prominent Republican supporter of Chuck Schumer (D-NY)’s Ex-PATRIOT Act, another well-known emigrant harassment proposal.
The roll call on this “trade facilitation” bill (showing the votes of each Senator) was posted after I first wrote this; it shows that all 44 Democrats, 32 Republicans, and both the independents voted for the bill, while 20 Republicans voted against and 2 Republicans did not vote. The “yea” voters include not just traditional enemies of the diaspora like Chuck Grassley, Chuck Schumer, Jack Reed, and Harry Reid, but FATCA opponent Rand Paul as well.
Similar passport revocation provisions passed the Senate once before three years ago (in a highway funding bill) but got shot down by a competing House highway funding bill which coincidentally did not include any passport confiscation provisions. On the bright side, The Hill has predicted that this “trade facilitation” bill, too, will get nowhere in the House — though again, not due to any concern for the diaspora, but rather because of the bill’s controversial anti-currency-manipulation provisions (Title VII).
The twisted procedural history
The Atlantic describes the decision to bring S. 1269 up for a vote as a concession to Senate Democrats, as they support its anti-currency manipulation provisions. In total, four separate trade-related bills were brought up for votes. According to reports in The Hill, Harry Reid (D-NV, another long-time supporter of passport confiscation) had been pushing for all four bills to be combined. However, due to a split between Senate Democrats and President Obama, the four-in-one deal broke up and instead the “trade facilitation & trade enforcement” bill was scheduled for a separate vote.
Or, more precisely, H.R. 644 (originally a bill providing for charitable deductions for donations of food inventory, which passed the house in April) was scheduled for a Senate vote. Then, they replaced its contents with the text of S. 1269 — the Trade Facilitation and Trade Enforcement Act, which includes the passport revocation provisions discussed yesterday — and voted to pass that. Now, in order for this to become law, the totally different versions of the bill passed by the two chambers still have to be reconciled in conference, and the bill signed by President Obama.
Hatch was very proud of himself for all the procedural manoeuvring in which he was willing to engage to get passport confiscation to the floor, as you can see from his press release.
While we could not – and still cannot – guarantee that all four bills will become law, we certainly want to see the custom and preferences bills pass the Senate.
I’m a co-author of both of those bills. They are high priorities for me. It was never my intention to let them wither on the legislative calendar. I was always going to do everything in my power to help move them forward.
S. 1269, which contains the passport confiscation provisions, is what Hatch refers to as the “customs and enforcement bill”; “Trade Promotion Authority” is S. 995, “Trade Adjustment Assistance” is S. 1268, and “trade preferences” is S. 1267.
Reactions to the trade bills
The Asian Trade Centre, a Singapore-based organisation, criticised the efforts to hitch this awful “trade facilitation” bill to the bigger wagon of the trade preferences bill:
But insisting on including this set of rules alongside the TPA debate just illustrates the nature of the debate in Washington. It is not about creating helpful rules to guide trade in the next five years. It is about following narrow, domestic partisan interests and using flawed arguments.
In the end, it also shows the rest of the world that the United States cannot be viewed as a trusted partner because—no matter how much you bend to accommodate the Americans in a negotiation—they will always add one more bitter pill and insist that you swallow it. Even then, passage of the final deal is never assured.
Bernie Sanders, for his part, is opposed to all these trade bills because of working conditions in other countries whose exports to the U.S. may increase under the bill. In particular, he doesn’t like it when groups of foreign blackmailers confiscate migrants’ passports and hold them hostage in order to extract money from them; as he stated in a speech on the Senate floor in opposition to one of the trade bills (161 Cong. Rec. S2783):
32 percent of the [electronics] industry’s nearly 200,000 migrant workers in Malaysia were employed in forced situations because their passports had been taken away or because they were straining to pay back illegally high recruitment fees. In other words, American workers are going to be forced to compete against people in Malaysia–immigrant workers there whose passports have been taken away and who can’t leave the country and who are working under forced labor situations.
Yet he has nothing to say when domestic blackmailers threaten to do the same thing.
The midnight knock on the door
The first inkling we had of these passport confiscation provisions was on Monday, and the earliest news of this deal to get the “trade facilitation” bill to the floor was not even a day in advance, when it got posted on the Republican Senate “Floor Monitor” Twitter feed, while I was still sleeping. I found out about it during my lunch break when I saw Mark Twain’s comment pointing to Hatch’s speech, and the Senate Republican Policy Committee posted details of the vote.
At 10:30 a.m. on Thursday, May 14, 2015, the Senate is scheduled to begin consideration of H.R. 1295 and H.R. 644. An amendment containing S. 1269 (Customs Enforcement) will be offered to H.R. 644. At noon on Thursday, May 14, 2015, the Senate is expected to proceed to a roll call vote on H.R. 644, as amended with S. 1269, at a 60-vote threshold. This will be the second in a series of two votes at noon.
Do you really want to keep waking up for the rest of your life in fear that 535 demagogues in a distant city have decided — in the dead of night while you were sleeping — that omelettes are on the Homelanders’ breakfast menu and you are the egg who is going to be broken?
Externalising the costs and internalising the benefits
The Senate Republican Policy Committee’s summary of S. 1269 failed to mention anything at all about the passport confiscation provisions of the bill; they simply stated it would “decrease deficits” without explaining exactly on whose backs they planned to balance the budget. Specifically, the Congressional Budget Office claims that passport confiscation will raise US$231 million of revenue in the next four years, and US$398 million by the end of 2025. This is barely more than half of the US$743 million the JCT claimed this provision would raise the last time around, back in 2012.
As discussed in S. Rept. 114-45 (see Senate Finance Committee PDF if the congress.gov link isn’t up yet), all major items of spending in this bill are for the benefit of Homelanders: $179 million in reductions of customs duties collected due to an increase in the de minimis threshold below which no duties are collected; $200 million in increased payments to domestic manufacturers under the Continued Dumping and Subsidy Offset Act, et cetera. But rather than sufficiently increasing customs user fees to pay for all the additional spending, Hatch and his gang decided to hide the costs elsewhere — just like how FATCA got into the HIRE Act.
The absurd speed at which the Senate managed to get this law for revocation of passports to the floor — while dragging their feet on concessions to the concerns of emigrants — clearly demonstrates the precarious position of those who choose to retain their U.S. citizenship while living outside of the United States, in particular those who have no other citizenship. Congress has no reason to care about your concerns; your votes are diluted among all fifty states, and you don’t even have a non-voting representative like the Puerto Ricans or the American Samoans.
@Don: FWIW, the House will probably let this bill die. The White House supports about half of it, and has no complaint whatsoever about the revenue offsets, but would prefer another bill without the currency manipulation provisions.
Guys, It says delinquent. So it’s not enough to have a tax bill that’s unpaid that is big. You have to have not paid the taxes for quite some time and not have a payment plan in place.
I think the tax I have to pay to the US is theft. I feel I was robbed. When the bill came I paid it. What choice did I have. If I didn’t have the money I would have filed the paperwork to get a payment schedule. If there was no way I could ever pay it you can get the tax reduced.
I have been delinquent on my taxes precisely one time and they even sent a collection agent after me (for less than $100). Of course they had to apologize when I showed them they had got it all wrong and in fact they owed me.
Are you guys sure it would apply to FBAR penalties? They aren’t tax penalties. Not that that matters.
They’ll only revoke your passport if you have a tax judgement against you. How likely is that for non-residents who can plead reasonable cause if push comes to shove? Still, who needs the cleansing by fire?
Since Americans who work in the U.S. ALL have S.S.N.s, then the people with American passports without the S.S.N. (the ones that will be revoked if this bill becomes law) must be the people who were obliged to obtain a U.S. passport ONLY because they were born in the U.S. and had to get one simply to to enter the country (even though they haven’t lived in the U.S. for years and have never worked there.) It’s ridiculous to force people to get an American passport because of their birthplace, rather than the country where they actually live and work and have dominant citizenship. Now they’re being forced to get a S.S.N. too, in order to get said American passport.
And if this bill becomes law, never mind the trouble to get a passport, what’s more, is that it can be revoked at any time the I.R.S. alleges that you owe them 50K! Wait! Isn’t the I.R.S. notorious for confiscating the assets of small businesses (unless rescued by the Institute for Justice)? Isn’t the I.R.S. known for extracting huge amounts of money from people for alleged “willful noncompliance” and other similar “crimes”?
It stands to reason that the I.R.S. has no business deciding who should and shouldn’t hold a passport. It’s bad enough that due to the “no-fly list”, innocent people who happen to have the same name as a criminal’s name/alias are constantly detained, interrogated, and even denied travel–but at least the reasons for a “no-fly list” is understandable. But a mere allegation from the I.R.S.? Seriously? Soon they’ll get to decide who can and cannot enter/exit the country on ANY passport!
@Neill: Well, there’s only two possibilities here.
A: This provision has no effect on tax collection, in which case Senate Finance lied (notice they already cut their revenue estimate by nearly half from four years ago) and later on they’ll have to find aother way to make up the difference somehow
B: This provision does have an effect on tax collection, i.e. more tax is going to be collected from someone: namely, people who care about having a U.S. passport.
You are right, most Isaac Brock readers won’t be affected. But single citizens who do care about having a U.S. passport (particularly, Americans abroad who can’t naturalise where they live, or more likely naturalised immigrant US citizens who came from single-citizenship countries and so no longer their other passport) will be affected at a far higher rate than the average Homelander who doesn’t travel internationally, even if the total number of people affected is low.
And that’s the whole reason why this facially-neutral provision was chosen as a revenue offset, instead of increasing customs user fees by the full amount or something similar: the beneficiaries of the bill don’t want to pay for the benefits they’re getting, so they shove the costs off onto unpopular members of unpopular groups.
(Notice that they haven’t proposed taking away interstate travel privileges from federal tax debtors, e.g. by revoking their driving licenses or barring them from transport companies which operate in interstate commerce. Why not? That would be unconstitutional, and more importantly for Congresscritters, unpopular. But in bullshit cases like Haig v Agee the US claims that international travel is not constitutionally protected like interstate travel, and so passports are fair game.)
Is passport revocation for tax matters even constitutional? If not, wouldn’t that be just another item to add to the list for litigation?
Constitution… what is that.. some old piece of paper with suggestions… seems like the US gov’t makes up crap as they go along… hiding things left & right in these new laws that no one who is sane will totally understand or read… what hope is there for the average joe who relies on the gov’t to do the right thing…
Yeah- those thoughts were passing before my inner mind too. All these hidden agendas-or so I thought. But I think that these people were elected by the american people to represent them, and sadly- I think ALL of inland America is of the same mindset: we need money and we will get it wherever we can, no matter whether just, reasonable, or not. They even passed some horrific law for “civil forfeiture” which is like making robbery lawful. They dont CARE where it comes from. It`s like somebody who is drowning- they don`t ask whose lifeboat it is either. They have all fallen for the myth of balancing the budget with those ugly “tax cheats” and tax evasion is the biggest enemy, not internal policies.
But it is like Churchill once said: ” I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
While in a panic, nobody listens to reason. They skim over the “details”. They aren’t even trying to crunch the numbers to see if their plan is even plausible.
The other day, somebody wrote something that went kind of like this: who trusts a country which plans to make its revenue by selling drugs and guns? This is the new America? Which throws hONEST business people under the bus- those who would try to sell REAL products?
” seems like the US gov’t makes up crap as they go along”
Delinquent is a tax lien. It is applied if one doesn’t answer to the requests to pay. If the delinquency is due to social security payments (like from a business), the tax lien comes FAST. In a personal situation, it might take awhile longer. However, I have had my entire FEIE negated for not having dotted the i’s, for which I immediately corrected. However, it took the IRS nearly a year to recognize it, all-the-while sending threatening letters. If they had screwed up one more time, I would have had a tax lien against me. Tax liens don’t always come, but that one day that they do, you are screwed. And tax liens may come to persons who had never known they should ever have filed. Those liens could get created longtime prior to the IRS knowing any person’s address and longtime before any such person is notified. Screwing a small segment of the population is still screwing a population.
How can Orin Hatch say he is in favor of Residence Based Taxation, yet support the passport revocation provision? They are inconsistent.
Well I’ve been holding out but this kind of news brings me closer to relinquishment; I already have 2 passports; maybe I’ll apply for a third one, in my host country, and use that to show that I am relinquishing.
The sunny side to the US mess is that I now deal with my host country’s tax system with a smile, each time telling myself how much easier and less threatening they are than the US, and that they will leave me alone if I leave the country.
Small piece of the puzzle in the Federal Register a couple of weeks ago: the IRS estimate that Form 13997 (the form they send & ask you to fill out if your passport application doesn’t include your SSN or TIN, or doesn’t clearly indicate that you don’t have one) is filed by 2000 people per year
It’s OMB Control Number 1545-2144; nothing particularly interesting in their supporting statements
Due to an oversight at the Bellingham SSN office, my SSN hadn’t arrived before I reapplied for a US passport, so I just put a series of zero’s in its place. No one ever requested I fill out a form 13997!
How about a World Passport?
Apparently it’s only recognised by 7 countries, but hey that’s 7 more than Orrin Hatch is giving you.
Another US IRS Form about which very few people would any idea: http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCQQFjAB&url=http%3A%2F%2Fwww.reginfo.gov%2Fpublic%2Fdo%2FDownloadDocument%3FdocumentID%3D318364%26version%3D0&ei=-iBWVd3rF8OBygSN34DoAg&usg=AFQjCNEC2ytJG5j9pFW0znaEXewwtUEkTw&sig2=qTwcagKZlS2xyK4cnL4N1g&bvm=bv.93564037,d.aWw
May 4, 2015: http://www.gpo.gov/fdsys/granule/FR-2015-05-04/2015-10321
Wikipedia on history of World Passport: http://en.wikipedia.org/wiki/World_Passport
Was it not Orrin Hatch’s committee staffers that the ADCS delegation met with in Washington. Does this indicate that Hatch has ignored the submissions ?
Well, the US is gonna do what the US is gonna do. So we should do what we need to do…which is ignore all summons and tell the assholes in USG to “cross the border and come n’ get us.” They’ll have a war on their hands.
If they are going to do this they should extend it to include IRS workers who live in the US and have big delinquent tax bills. There are a large number of these.
@Eric, I know what you are saying but this is NOT punishment for homelanders. But is punishment for expats!!!
An IRS worker who has a US Passport revoked…..BIG F. DEAL…… It will not change their life at all.
But an Ex-Pat on Limited Leave to Remain in the UK working on Indefinite Leave to Remain is absolutely screwed.
This law is meant to HURT ex-pats.
Although this comment is unrelated to the passport issue, Homelanders once again have shown their ignorance to the outside world.
The jury today in Boston by sentencing the Boston Bomber to death now has put Boston in the position of European style bombings by either real terrorists or other lone wolves.
Knowing Boston well and its lack of European style security measures such as having bins in the T stations is a good example.
I hope that I’m proven wrong.
Thanks Calgary411. It appears that Form 13997 was introduced after I renewed my passport, at a time when many people were also experiencing their OMG moment.
Ok, here’s a thing I simply do not understand.
Sure, they can refuse to issue a new passport and all that. But cancelling a passport? Recognition that a passport is revoked is up to the foreign country.
If you are a dual, just do a name change and enter on the foreign passport. If you are not, then well… screw the US
This law is indeed meant to hurt expats. This is obviously part of a multi-stage plan. First get the penalties in place, then remove FEIE and hype up how much expats earn without paying and US tax while homelanders suffer (obviously we are at fault). Politically it’s easier this way than the other way round. As for me, my position remains the same: screw em. They don’t know what I’m worth or what I earn and I am not in any way inclined to tell them things they do not know about and cannot know about on their own.
@Fred: Recognition that a passport is revoked is up to the foreign country. State found an easy way around that problem: putting revoked passports in an INTERPOL database which was originally for stolen passports:
Most foreign countries, even ones which aren’t so friendly with the U.S., will jump to precisely the conclusions that State wants if the International Criminal Police Organization has your passport in a database entitled “Stolen and Lost Travel Document Database”, even if it clearly isn’t lost or stolen and matches all your biometric details. Note the uncanny parallel to the requirement that citizens abroad who want bank accounts must register with the Financial Crimes Enforcement Network.