We like stories, we like to summarize, and we like to simplify, i.e., to reduce the dimensions of matters. The first of the problems of human nature that we examine in this section … is what I call the narrative fallacy. (It is actually a fraud, but, to be more polite, I will call it a fallacy.) The fallacy is associated with our vulnerability to overinterpretation and our predilection for compact stories over raw truths. It severely distorts our mental representation of the world; it is particularly acute when it comes to a rare event.
The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship, upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity can go wrong is when it increases our impression of understanding.
Nassim Nicholas Taleb (emphasis his), The Black Swan
The news media always tells stories. When it comes to the IRS problem that so-called USA citizens abroad have, there is a majority narrative fallacy, which has come out ever so clearly in the recent stories about the Duchess of Sussex and now her baby, who not yet born is already owing the IRS his loyalty and taxes. CNN has spread a particularly egregious narrative fraud based upon the testimony of David Treitel, who has a conflict of interest since his livelihood and his wealth derives from helping overseas taxpayers come into IRS compliance:
That’s because as US citizens, both Meghan and her baby — who will be seventh in line to the British throne — will be liable to pay US taxes, which could potentially open up the notoriously private royal accounts to the Internal Revenue Service (IRS)
“The United States has — unique among nations — a citizenship-based taxation (system), so as long as Meghan is a citizen of the United States she is taxed,” explained David Treitel, the founder of American Tax Returns Ltd., which provides taxation advice to US expats.
The law means US tax inspectors could scrutinize Harry and Meghan’s royal wealth, and the income of their newborn child.
The article goes from bad to ridiculous, claiming that Merkle and her baby will have to pony up taxes on such things as their home in the UK and the Crown jewelry. To summarize some of the main points of this narrative fraud:
- The Duchess of Sussex must pay USA taxes because this is what the IRS requires.
- There is no escape except to renounce.
- The only law that matters is USA law.
- UK law is by implication irrelevant.
- The Royal family will be exposed to the IRS tax man.
- There is by implication nothing wrong with this obligation.
- By implication also, if the Royal Family can’t escape the IRS, you can’t either.
One reason for the existence of the Isaac Brock Society is to provide a counter narrative to this fraud. I would respond with the following Brock narrative:
- The unborn baby will have a say regarding what citizenship he (or she) will have. He will be born in UK to the Royal family and that means he is completely out of reach of foreign governments, not least of all the USA, just because the Crown will protect him.
- USA law applied not just to the Royal family but also to most other so-called USA citizens abroad is a gross overreach and done only in violation of international laws and conventions.
- The IRS and the compliance industry are bad players, two branches of a well-organized crime syndicate, and they are acting in a manner which is immoral.
- CNN receives advertising dollars from the compliance and the banking industries and therefore has a conflict of interest that skews their fraudulent reporting.