Who Renounces Their American Citizenship?
Sunday, Vermont's Independent Senator Bernie Sanders tweeted, bright and early, that "Today, the 400 richest Americans are now worth a record-breaking $1.7 trillion-- more than 5 times what they were worth just 2 decades ago." I guess you can still make the kind of fortune in America that gives you the opportunity to dominate society and call the shots. These people even have their own political party-- the GOP-- and pretty much control what the Democrats do as well. I have some kind of foggy recollection about the Founding Fathers opposing the whole notion of the formation of the kind of great intergenerational wealth that gives birth to one of the worst of all governing systems, the plutocracy. It's why democracies have estate taxes. Even if Republicans don't Conservative Winston Churchill and robber baron Andrew Carnegie were very much in support of holding the development of plutocracy and oligarchy at bay with a strong inheritance or estate tax. From Chris Hayes' Twilight of the Elites:
The estate tax is designed to only affect those with vast fortunes, estates of more than $5 million. And it's logic is clear: We don't want an aristocracy of birth-- that's the very system our founders repudiated when they created a republic. Conservative Winston Churchill argued that an estate tax provided "a certain corrective against the development of a race of idle rich," and it was out of an ideological commitment to a kind of protomeritocratic vision of equality of opportunity that robber baron Andrew Carnegie, opponent of income and property taxes, argued for a steep and confiscatory tax on inheritance:Over the weekend one of the U.K.'s more conservative newspapers, The Telegraph, took a look-- albeit a typically superficial one-- at Americans who renounce their citizenship. The tradition is England-- at least among wealthy rock stars-- has always been to live outside Britain enough months of the year so as to qualify for low tax rates in America or France or Spain. I dealt with dozens of them when I was at Warner Bros. Lately we've been seeing rich French tax avoiders seeking to shelter their money by moving to Belgium and the U.K. or even taking Russian citizenship. The number of Americans applying for U.K. citizenship has risen since the end of the Bush years. But most of them have already been living and working in London.
As a rule, a self-made millionaire is not an extravagant man himself... But as far as sons and children, they are not so constituted. They have never known what it was to figure means to the end, to live frugal lives, or to do any useful work... And I say these men, when the time comes that they must die... I say the community fails in its duty, and our legislators fail in their duty, if they do not exact a tremendous share.And yet, over the past decade, this fundamental and basic means of gently enforcing some modicum of a level playing field has been gutted. In 2002, the rate for estates of more than $1 million was 50 percent, but it was diminished each year, until it was entirely phased out in 2009. It has since been restored (extended in December 2010 only for two years, for now), but at the historically rock-bottom rate of 35 percent, with a $10 million exemption for married couples. The New York Times said House Democrats opposed the deal brokered by Obama and congressional Republicans in the lame-duck congressional session of 2010 because it "would cost 68 billion, help only the richest of the rich-- an estimated 6,600 households-- and do nothing to stimulate the economy while adding to the national debt."
London-based American lawyers, who specialize in tax and immigration, report a threefold increase over the last five years in the number of American citizens who are giving up their citizenship-- a process known as “renunciation."Of course, for every American who would give up his or her citizenship rather than pay his or her taxes, there are
Across the world 1,781 Americans renounced their citizenship in 2011 compared with just 231 in 2008, when US tax laws changed, although it remains unknown how many are adopting British rather than any other nationality.
Many decide to give up their American citizenship after tiring of the lengthy US tax return process, which requires them to pay tax on their total income regardless of where they live.
“There’s no question that the number of people renouncing their US citizenship is increasing,” said Diane Gelon, a US tax and immigration lawyer based in London.
“I probably get a dozen cases a year now when before 2008 when the tax laws changed it was just three or four.”
...Even if a US citizen earns all their income in Britain they are liable for tax in their home country which can lead to unusual tax situations arising, said Ms Gelon.
For example, US citizens are expected to pay capital gains tax to the US government if they sell a property in Britain which is their main residence, even though a similar tax is not imposed by the British Inland Revenue.
The US rules make concessions for tax paid overseas but there is still a risk that their citizens will be hit with a large tax bill, she added.
“Actually giving up your citizenship is dead easy-- once you have an appointment with a consular official it takes a matter of minutes.
“But getting an appointment in London can take three months and that is largely because of the tax issues,” she said.
“It can be an emotional thing, to give up one’s citizenship. I’ve had clients cancelling their appointments at the embassy on the day they were due to renounce because they just couldn’t go through with it.”
Susan McFadden, another London-based US attorney who specializes in immigration matters, said: “I’ve definitely seen a surge. In the last few years it’s gone up threefold and I see through about two dozen cases a year.
“The US Embassy in London has responded to that demand-- and quite a long queue for renunciation appointments-- by streamlining the process.
“We are told they have trained additional officers to reside over renunciation processes.”
The 2011 census found 177,185 people living in England and Wales were born in the US. All American citizens are required to file a tax return on their world-wide income. The rule applies even if they have not visited the US for decades.
The US Internal Revenue Service is likely to discover tax returns have been missed in a number of different scenarios. For example, it may come to light if a citizen applies to renew a passport, is named as a beneficiary in a will or their foreign-based bank complies with new legislation which requires them to notify the US government about all American customers.
Bush’s "war on terror" was also a "war on immigrants," Thousands of "aliens" were imprisoned without trial or access to a lawyer, many just for having Arab-sounding names... [T]he US government has indeed used "denaturalization" to get rid of its dissidents. In 1919, J. Edgar Hoover ordered the arrest of anarchist leader Emma Goldman under the newly passed Anarchist Exclusion Act, revoked her citizenship, and placed her on a ship, nicknamed the Soviet Ark, to Russia. She was never allowed back to the US.The E.U. has been in the process of making the wise decision over the past couple of years to curb bonuses for banksters and that's about to kick in-- as it is in Switzerland, a non-member. So I suspect banksters aren't among those rushing to renounce their U.S. citizenship over taxes.
Nearly a century later, in 2004, that same fate befell Yaser Esam Hamdi, a US citizen captured in Afghanistan in 2001. The Bush Administration imprisoned Hamdi in Guantanamo bay as an "an illegal enemy combatant," but made no formal charges for three years. Under pressure from human rights groups, Bush’s officials agreed to deport Hamdi to Saudi Arabia, as long as he renounced his citizenship. When Hamdi refused to give up his passport, the Justice Department revoked it anyway.
And then, in 2007, Rice’s State Department released a list of new “potentially expatriating acts,” including treason.
The European Union moved to slap a strict limit on bank executives' bonuses in the latest effort to curb what is seen by many as corporate and banking excess.I guess greedy banksters can always move to China. I hope they do. Rush Limbaugh lives in Costa Rica now, right?
Negotiators for the European Parliament and EU states said they reached a preliminary deal on a measure that would forbid bonuses that exceed a bankers' fixed salary. Flexible pay could increase to twice fixed salary, but only with explicit shareholder approval.
The initiative, part of a broader law that forces lenders to build up more-robust financial cushions, is designed to reduce incentives for the type of risky behavior widely blamed for contributing to the 2008 financial crisis.
The EU push comes as Swiss voters will indicate on Sunday just how deep their resentment of big executive paychecks runs when they vote on a controversial plan that would give shareholders sweeping authority over executive compensation.
The 24 items contained in the Swiss referendum, dubbed the "rip-off" initiative, would allow shareholders to block salaries, ban so-called golden handshakes and parachutes-- forms of guaranteed parting packages-- and require greater transparency on loans and pensions to executives and directors. The measure includes fines and prison sentences for violations.
The moves in Brussels and in Switzerland, if successful, would represent the most intrusive intervention yet into how banks and corporations compensate employees and executives-- an issue that was for years considered an internal corporate matter.
The EU pay limits would apply to all European banks, including their operations abroad, as well as U.S. and other foreign banks' subsidiaries in the EU, officials representing both member states and the Parliament said. That provision may be reviewed in a few years' time, they added.