Of course, it was already obvious that libertarians oppose the “Expatriation Prevention” Act, but it’s heartening to see at least one sitting politician take a public stance against the wave of demagoguery and jingoism on which Schumer is surfing. Transcript and my comments after the jump.
0:00: Hello, this is Ron Paul, with your weekly update for May 28th. The characteristic mark of a tyrannical regime is that it eventually finds it necessary to erect walls to keep people from leaving. That is why we should be troubled by the Ex-PATRIOT Act — an egregiously offensive bill recently introduced in the Senate. Following a long line of recent legislation and regulations attempting to expropriate more wealth from hard-working Americans, this new bill spits in the face of the overburdened taxpayers, and tramples on the Constitution.
0:37: Current law already dictates that Americans with a net worth of over $2 million who expatriate must be assumed to have sold all their assets and must pay a corresponding punitive exit tax on those assumed sales. The Ex-PATRIOT Act tax goes even further than current law by assessing a 30% capital gains tax on all future earnings of expatriates.
This of course is not factually correct (yet): the 30% tax only applies to future U.S. capital gains. The U.S. has not yet found a way to tax non-resident non-citizens on income they don’t earn in the U.S. — perhaps they’ll figure out a way to do this in the future, by combining it with the FATCA withholding regime
1:02: Not content just with this additional tax, the bill also grants the IRS the sole authority to determine whether individuals have expatriated for tax purposes, and allows the IRS to bar those individuals from ever re-entering the United States. Finally, the bill blatantly violates the ex post facto provisions of the U.S. Constitution by extending all of these provisions to anyone who has given up their U.S. citizenship within the past decade.
1:33: This bill and other similar bills cast a chilling effect on savings, investment, and entrepreneurial activity. The bill was introduced in response to news reports about one of the founders of Facebook, who might save millions of dollars of taxes by renouncing his U.S. citizenship
1:55: In their blind envy towards successful entrepreneurs, the bill’s sponsors ignore the fact that they will ensnare many ordinary middle-class Americans who work hard, save and invest wisely, and benefit from rising home values. These Americans may easily find themselves pushing past the $2 million mark by the time they retire, especially as inflation continues to seriously accelerate.
This is the same point that Petros and others here have made before: the $2 million “covered expatriate” threshold imposed by Section 877A does not have a cost-of-living adjustment multiplier applied to it (though the $600,000 capital gains deduction does), meaning that anyone who bought a house in the right area at the right time — especially outside of the U.S. in a hard-currency area — could eventually end up exiled from the Homeland. And of course, as I keep pointing out, you could become a “covered expatriate” without any assets at all if you answer “no” on the Form 8854 question that asks (under threat of perjury charges) about your past five years of tax compliance — since a missing Form 3520, 8621, 8938, or other obscure garbage “information return” could be counted as “tax non-compliance”.
2:26 If they wish to escape the Federal Reserve’s inflation by immigrating to lower-cost countries so their dollars will go further — as many Baby Boomers are starting to do — the Federal Government would penalize them, and would continue to penalize them for the rest of their lives, as long as they hold any money in the United States.
2:40 Unfortunately, the mere consideration of such legislation, even before it is passed, has made American banking customers a potential future headache for banks around the world. They don’t want to deal with the IRS any more than Americans do, and as American accountholders become a Trojan Horse for the IRS to insinuate themselves into their affairs, there may be more costs than benefits to extending banking services to Americans.
Of course, as Homelanders of all political stripes repeatedly fail to understand, it is not necessary to give up your citizenship to emigrate from a normal country — indeed, many people from other countries live abroad for decades or even generations while retaining their ancestral citizenships. It is only Americans who have to renounce after emigration in order to live normal financial lives in our countries of settlement. I wonder if Ron Paul is actually aware of the U.S.’ unique citizenship-based taxation system? He seems to have heard something about FATCA and the effect it is having on U.S. customers of non-U.S. banks, though he doesn’t mention it by name and seems to have confused it with the Ex-PATRIOT Act.
3:09: We live under a federal government that has eviscerated our Fourth Amendment rights, that can detain U.S. citizens indefinitely based solely on the president’s word, that assaults toddlers and grandmothers at airports in the name of security, and regulates virtually every aspect of our economic lives. No wonder increasing numbers of Americans feel that this government is engaged in outright warfare against its own citizens.
3:36 Every day, the noose grows tighter, yet everyone who sees the writing on the wall and seeks to leave must pay exorbitant taxes just for the privilege of leaving. And increasingly, the possibility looms of never completely breaking away from the government’s tentacles, no matter where they go.
3:57 Ultimately, the Ex-PATRIOT Act proposes to control people by controlling their capital. And that has no place in a free society. Thanks for following this update. The new update is placed on this number: 888-322-1414 every Monday. The written text can be found on my website: www.house.gov/paul under the heading “Texas Straight Talk”. Thanks for calling.
The transcript hasn’t been posted yet — there seems to have been a delay this time, so I did my own. Will correct any errors once his official transcript becomes available.
Is there any chance the divorce is just an “arrangement” for protection as opposed to one that’s a real split? In addition to all the stress, loss of sleep and so on, this is really an example of why this needs to be stopped. I have not had any problems sleeping since renouncing. 🙂
Which OVDI program did your friend enter? I am presuming 2009, since payment has already been made. There’ a story in the Times of India about some getting refunds. Maybe something here will apply to your friend?
From Mark Steyn’s column in today’s National Post, May 29, 2012 —
“The question for the wider world is what do “social media” types [the Facebook crowd] represent? If they supposedly embody the forces of progress and modernity, then they’ve just taken an electoral pounding from guys [the sharia-enforcing, Jew-hating, genital-mutilating enthisiasts of the Muslim Brotherhood] who haven’t had a new idea since the seventh century.
No one should begrude Mark Zuckerberg his billions, and decent people should revile in the strongest terms thug-senator Chuck Schumer’s attempts to punish Zuckerberg’s partner Eduardo Saverin for wishing to enjoy his profits under the less confiscatory tax arrangements of Singapore: It is a sign of terminal desperation when regimes that can’t compete for talent focus their energies on ever more elaborate procedures to prevent freeborn individuals voting with their feet.”
@just me, this line jumps out and is contradicted by every troll we have come across “Paying taxes is no measure of how grateful you are”, those who believe that somehow US citizenship is of greater value because of citizenship based taxation. Elitist and exceptional, American.
Wonder when the IRS will get its own Special Operations team to parachute into countries to go after those recalcitrant US Citizens non tax payers? 🙂
@just me, and will they have a kill or capture order? Which are we of greater value, dead or alive?
@bubblebustin: If you’re dead they can charge you estate tax. If you’re dead but you keep insisting you’re being taxed without representation, they’ll register you as a Chicago voter. If you’re dead but you keep insisting you’re not a citizen, they’ll issue you with a posthumous citizenship certificate.
The official transcript of Ron Paul’s talk has been posted on his Congressional website (link). It actually has an open comments section (might be filtered; I tried posting a message to thank him but looks like it got queued for moderation).
@Eric, wow, I feel like I’m in a Hieronymus Bosch painting.
Thanks for that, and also thanks for the comment that you posted on the Market Place Radio story on Australia looking for Millionaire investor types. Other Brockers are welcome to add something there too, (would be nice to have more than 2) as I am trying to get these guys attention on FATCA, and frankly right now, if you search for FATCA on their site all you get is my previous comments over time.
Back to Ron Paul……
I too, when on Ron’s blog, and posted a comment which is in moderation. It may never see the light of day, but the mission here is to get a message to Ron on Citizenship Taxation, and surely he and/or his staff will see it even if they never let it out of moderation.
Here is what I posted under my name…..
@Just me, hitting the “like” button on that. I hope that Don Whitely will send his article there too.
I see it showed up, so how about that! First one, which makes me wonder what happened to Erics?
@ Just Me
I followed that Ron Paul link to your comment and “liked” it. There really didn’t seem to be much more to add. You said it all, and very well, as usual. I’m beginning to think you have cloned yourself because you are so everywhere doing so much to help. Thank you!
Great letter to Ron Paul. Thanks for sending it!
Below is the full text from his speech which can be found on the Appenzell Daily Bell, which Ron Paul appears to be affiliated with.
Actually I just posted on his web site. Thanks for the other link, and maybe I will go put it there too
If all goes as planned on the Romney side, Team Nevada will provide Nevada’s delegates to the Republican National Convention. The duly-elected Ron Paul delegates, who were elected through state and local conventions in Nevada, will be barred from the convention floor.
Not sure why that tweet didn’t show up, but here is the link that I wanted you to see….