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Senators Schumer and Casey Aim to Trap People Who Might Want a Different Government Service Provider

May 17, 2012

Fearful of millionaires lining up at the border, Senator Charles Schumer wants to increase US exit toll

The New York Post reports:

WASHINGTON — Democratic Sens. Chuck Schumer (N.Y.) and Bob Casey (Pa.) took aim at Facebook co-founder Eduardo Saverin Thursday when they introduced legislation designed to tax expatriates even after they have left the country.

Saverin, who stands to make $4 billion from Facebook’s expected IPO on Friday, announced that he had renounced his US citizenship last week. His move is widely believed to be a financial one.

The two senators, who called his decision “despicable,” said Saverin stands to save $67 to $100 million in taxes by renouncing his citizenship.

Their so-called “Ex-PATRIOT Act” would impose a mandatory 30 percent tax on American investments for those who renounce their citizenship and would also prohibit individuals like Saverin from re-entering the country.

  1. Michael permalink
    July 12, 2012 5:33 pm

    Sad, but not surprising. Instead of working to make the country a more attractive place for talented people to come to, they try to make it harder to leave. All this does is raise a red flag to discourage potential entrepreneurs from ever coming to the US, lest they too become trapped in the US tax net and ‘owned’ for life no matter where they may want to go in the future.

    It’s America’s laws that are punishing and abusive to Americans who live abroad in terms of added difficulty and cost that is causing renunciations. From many not being able to keep a local bank account where they live (due to FATCA and foreign banks now turning away Americans for being too much cost & risk from IRS overreach) to the incredible complexity of having to file tax returns as an American living abroad even if you don’t owe any taxes and don’t live in the US at all during the year! And just pray you don’t forget a form such as FBAR, where penalties are 50% of the account’s value for every year up to six years, thus up to 300% of the account’s value! And they wonder why people are renouncing. It’s pretty clear why really. The potential risk, liability, overhead time to deal with this and emotional stress is too great, especially for those already living happily abroad (where, it must be mentioned, that these individuals are *already paying taxes to where they are currently resident and using services*). But hey, Schumer et al don’t consider the root cause of any it. Instead, they try to make it so that you’re not even free to leave the ‘land of the free’ anymore.

  2. June 19, 2012 5:23 pm

    Didn’t Germany do this to the Jews in the 30s?

  3. May 29, 2012 2:19 am

    I don’t see any reason why a person shouldn’t enjoy the benefits of citizenship during youth, enjoying such things as government-subsidized education that are designed to create productive, successful citizens, and then once those investments have paid off, take his skills and talents away from the country that invested in him, along with the fruits of said labor.

    Oh wait, no. The opposite.

    • Michael permalink
      July 12, 2012 5:46 pm

      @nobilisreed Don’t forget that it’s one’s parents who pay taxes while their children are educated. So even if an person goes to public school, that doesn’t make them a slave at all. Their parents chose to live in a place where they had to pay into a system in order to gain the benefit of their child being educated at their chosen school for elementary and high school. If you claim the child received inordinate benefit relative to what their parents must have paid into the system, then it’s not a sustainable system and it’s the design of the system that should be blamed for that. But in either case, you’re argument fails.

      • Michael permalink
        July 12, 2012 5:48 pm

        *your Damn typing too quickly

  4. Michael Wiebe permalink
    May 17, 2012 10:42 pm

    As Hayek wrote:

    If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it.

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