Liberty and justice for all United States persons abroad

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Tag Archives: Orrin Hatch

Orrin Hatch’s passport revocation bill passes Senate

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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).

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Orrin Hatch revives passport-revocation proposal in new trade bill

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As a revenue offset to S. 1269, “An original bill to reauthorize trade facilitation and trade enforcement functions and activities, and for other purposes”, which was introduced on Monday, Orrin Hatch (R-UT) includes the following unoriginal and tired proposal:

SEC. 7345. Revocation or denial of passport in case of certain tax delinquencies.

(a) In general.—If the Secretary receives certification by the Commissioner of Internal Revenue that any individual has a seriously delinquent tax debt in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 1001(d) of the Trade Facilitation and Trade Enforcement Act of 2015.

This proposal was previously discussed here in 2012, and made its most recent appearance in 2014. 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.

Another section of Hatch’s bill would deny U.S. passports to people without Social Security numbers, sharpening an existing law which requires the State Department to forward passport applicants’ details to the IRS. This would effectively require that U.S. citizens born in other countries obtain SSNs prior to visiting the United States. (Under current procedures, U.S. citizen without SSNs are simply instructed to enter all zeroes in the SSN field of their passport applications.) However, unregistered children of emigrants might just ignore the law requiring U.S. citizens to use a U.S. passport to enter the U.S., and instead use their non-U.S. passport.

Orrin Hatch (R-UT) hates emigrants too

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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.