Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
The Ultimate Demise Of The Euro Union - 1st Sep 14
Palladium Price Breaks Multi-Year High Over $900 - 1st Sep 14
When Complexity Becomes Chaos - 1st Sep 14
Designer War By Default - 1st Sep 14
Islamic State or Russia? Ten Key Questions Towards Pragmatism - 1st Sep 14
Mixed Emotions for the Gold Market - 1st Sep 14
These Clowns Are Dragging Us Into War with Russia - 1st Sep 14
Marx And The Capitalist Cancer Of Overproduction - 1st Sep 14
Scottish Banks Salivating at the Prospects for an Independent Scotland of 6 Million Debt Slaves - 1st Sep 14
Small Man Europe Is Now In “Effective State Of War” With Russia - 31st Aug 14
The Unintended Blowback Of False Flags - 31st Aug 14
Tesco Supermarket Death Spiral Latest Profits Warning and Dividend Slashed - 31st Aug 14
Dow, Gold and Silver - A Last Stand, A Fake Out And A Surge - 31st Aug 14
If U.S. Consumers are so Confident Why aren't They Spending? - 31st Aug 14
Scotland Independence House Prices Crash, Deflationary Debt Death Spiral - 31st Aug 14
Obama’s “Catastrophic Defeat” in Ukraine - 30th Aug 14
Stock Market Inflection Point Approaching - 30th Aug 14
Gold And Silver - Elite's NWO Losing Traction. Expect More War - 30th Aug 14
Corporations Join Droves of Americans Renouncing US Citizenship - 30th Aug 14
Peter Schiff U.S. Housing Market, House Prices Bubble Warning - 30th Aug 14
Russia, Ukraine War - It’s Time to Play the “Gazprom Card” - 29th Aug 14
The One Tech Stock Investment You Should Never Sell - 29th Aug 14
Bitcoin Price $500 as Current Downside Barrier - 29th Aug 14
Don't Get Ruined by These 10 Popular Stock Market Investment Myths - 29th Aug 14
Low Cost Transcontinental Gold - 29th Aug 14
Gold Bullish Central Banks Should Give Money Directly To The People - Helicopter Janet? - 29th Aug 14
US House Prices Bull Market Over? Trend Forecast Video - 29th Aug 14
The Fed Meeting at Jackson Hole Exposed Yellen’s Greatest Weakness - 29th Aug 14
AAPL Apple Stock About To Get sMACked - 29th Aug 14
A History of Unlimited Money: Learn From It or Repeat Its Mistakes - 29th Aug 14
How You Can Play to Win When Market Makers Are Calling the Shots - 28th Aug 14
EU Gas Supply Is In Real And Imminent Danger - 28th Aug 14
Central Banks at the Root of Evil - 28th Aug 14
European Bond Market: Bubble of all Bubbles! - 28th Aug 14
Employers Aren’t Just Whining: The “Skills Gap” Is Real - 28th Aug 14
The ISIS Menace - Just What We Need, Another War - 27th Aug 14
The Risky Business of Methane-Rich “Fire Ice” - 27th Aug 14
CFR Recommends Policy Shift that is Very Bullish for Gold - 27th Aug 14
Ukraine Standoff Signals Global Power Shift - 27th Aug 14
Stock Market Panic Decline Begins - 27th Aug 14
The Monopoly of the Government Education Cartel - 27th Aug 14
How to Invest in Silver Today for Double-Digit Gains - 27th Aug 14
The Big Solar Energy Breakthrough We've Been Waiting For - 27th Aug 14
U.S. Empire’s Bumpy Ride - 27th Aug 14
Gold Market and the Interest Rate Trap - 27th Aug 14
Stock Market Staring Into the Great Abyss - 27th Aug 14
A Look at the Coming 30-year Inflation Cycle - 27th Aug 14
Forex Trading - Will USD/CHF Rally Above 0.9200? - 27th Aug 14
Europe’s Depressing Economy Dog Days of Summer - 27th Aug 14
How The Coming Silver Price Bubble Will Develop - 26th Aug 14
A Nation of Shopkeepers - Supply-Side (Voodoo) Economics? - 26th Aug 14
Stock Market Bear Tracks Abound In Wall Street - 26th Aug 14
65,000 U.S. Marines Hold up a Mirror to the Economy - 26th Aug 14
Bitcoin Market Provides Clues for Investors - 26th Aug 14
The Key to Trading Success - 26th Aug 14
Will The US Succeed in Breaking Russia to Maintain Dollar Hegemony?... - 26th Aug 14
Even Mainstream Academia Worried about Massive Bubbles in Markets - 26th Aug 14
Iraq and Syria Follow Lebanon's Precedent - 26th Aug 14
Colonization by Bankruptcy: The High-stakes Chess Match for Argentina - 26th Aug 14
Dow Stock Index On The Cusp - 26th Aug 14
Prohibition Laws and Agency Regulations - 26th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

Too Late to Leave the U.S.?

Politics / US Politics Feb 01, 2013 - 12:44 PM GMT

By: Jeff_Berwick

Politics

Wendy McElroy writes: The Ex-PATRIOT Act lies like a coiled snake on a table in the U.S. Senate. The longer title of this unenacted bill from 2012 is the Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act. Its self-description is, "A bill to amend the Internal Revenue Code of 1986 to provide that persons renouncing citizenship for a substantial tax avoidance purpose shall be subject to tax and withholding on capital gains, to provide that such persons shall not be admissible to the United States, and for other purposes."


The Ex-PATRIOT Act seeks to impose a perpetual exit tax and a re-entry ban on “specified expatriates.” A specified expat is anyone with a net worth of at least $2 million or a tax liability averaging at least $148,000 over the last 5 years. A renunciation of citizenship would be automatically viewed as a tax dodge. The person would need to prove his innocence to the IRS to become exempt from a permanent and annual 30% tax on all earnings from U.S. investments. The net worth level at which the tax triggered would undoubtedly sink over time and, perhaps, quickly so.

(Even the Nazis were not so extreme. Until 1941, the third Reich used the Reichsfluchtsteuer (Reich Flight Tax) to charge emigrating Jews a one-time 25 percent exit tax. Schumer wants 30% in perpetuity.)

The Ex-PATRIOT Act would also ban “former citizens” from U.S. soil unless he received a waiver. The waiver requirements are to be determined at a later date. Current expats have no legal right to return, but they are rarely banned from doing so

The Act was introduced in May 2012 by Senator Charles Schumer (D-NY), read twice, and referred to the Senate Committee on Finance. It is likely to pass in 2013.

THE LIKELIHOOD OF PASSAGE

Reason #1. When the Act emerged from the Democrat-dominated Senate, John Boehner – the Republican leader in the House of Representatives -- was luke-warm. He would back the Act if it was “necessary,” he stated. But he asked, is this really necessary? Since then, the two parties have feuded bitterly over a budget bill, with the Republicans accused of serving millionaires at the expense of America. The mud stuck. Boehner caved; despite a vow to never do so, he allowed taxes on millionaires to rise. 

If he opposes the Ex-PATRIOT Act, Republicans will be excoriated for  pandering to jet-set tax evaders. Democrats will chortle with joy. In fact, they have already played the embarrassment card. A co-sponsor of the Act challenged Boehner through a press conference, “Washington needs to work together in a bipartisan manner. I request that you introduce the Ex-PATRIOT Act in the United States House of Representatives and call for an immediate vote on this important legislation.” The political dynamic favors passage of the Act in both the Senate and the House.

Reason #2. The average trapped American is resentful of expats...and, most especially, rich ones. As long as the rate of expatriation was small, it could be dismissed as an aberration. After all, who would flee from the land of the free? That was something Europeans did. But the annual rate of expatriation has been rising sharply since Obama's first term (2009-2012). In 2008, 231 Americas went through the complex and expensive process of officially leaving. In 2009, 750 left; in 2010, 1534; in 2011, 1782. These are official numbers from the Taxpatriate Lists published by the IRS. 

The real numbers would be much, much higher. Consider a series of Zogby International polls conducted between 2005 to 2007. The polls focused on households, not individuals, and excluded households in which any member went abroad as a part of work for the government or a private company. Zogby found that1.6 million U.S. households had already determined to relocate abroad; an additional 1.8 million households were seriously considering such a move, while 7.7 million more were 'somewhat seriously' contemplating it.” Zogby concluded, “If the data collected in the seven polls...are fairly representative of the current decade, then, by a modest estimate, at least 3 million U.S. citizens a year are venturing abroad."

The polls were pre-Obama. If the post-Obama rate of household relocation tracks the Taxpatriate List rate, then household relocation increased more than eight-fold from 2008 to 2011. No one knows the real numbers but the “expat problem” is now too large to ignore.

[Editor's Note: If you would like to become part of this "problem"...then take this necessary step to free yourself from the increasing burden of belonging to the US...]

Reason #3. Even if the expat numbers remained small, Eduardo Saverin was a game-changer. On May 11, 2012, a Global Post headline announced, “Eduardo Saverin, Facebook co-founder, to renounce his US citizenship ahead of IPO.” Bloomberg estimated that Saverin might well save $67 million in taxes by renouncing prior to Facebook going public. 

One week later, on May 17, Schumer announced the Ex-PATRIOT Act as a direct response to Saverin's “outrage.” Even Boehner was politically compelled to denounce Saverin. Then Denise Rich – a prominent songwriter, socialite and political fundraiser – went expat for tax advantages. And, now, it is rock legend Tina Turner. The United States cannot permit mega-rich and famous people to make expatriation trendy, especially not for tax reasons. 

Reason #4. The Ex-PATRIOT Act is another in what seems to be an irresistible juggernaut of repression against expatriates and Americans abroad. 

Some of the totalitarian measures are well known, such as the Foreign Account Tax Compliance Act. Others fly under the radar. For example, a provision was buried in an unrelated and 1676-paged Transportation Bill entitled “Moving Ahead for Progress in the 21st Century Act” (MAP21). Section 40304 allows the IRS to unilaterally revoke the American passport of anyone it believes "owes" $50,000 or more in taxes. There is no hearing or due process. The IRS can now prevent Americans from fleeing abroad by slamming shut the exit door. And that's that.

Reason #5. Expats and unobtrusive Americans abroad have no hand. Politicians do not care about exiles who do not vote or about people who expose “America, the beautiful” as a lie. Politicians need to demonize them as being greedy, unpatriotic, and thieving elitists. By accusing expats of their own sins, the politicians create a scapegoat.    

CONCLUSION

As it is currently written, the Ex-PATRIOT Act would not be retroactive in its tax provisions. But 2013 may be the last year to use the old tax code. If you are thinking about leaving the U.S., then do it NOW! The legislative pipeline in Congress has been clogged during much of 2012. Do not wait until measures like the Ex-PATRIOT Act or another Section 40304 pass the blockade and land directly into your life. 2014 may be too late. 

Wendy McElroy is a renowned individualist anarchist and individualist feminist. She was a co-founder along with Carl Watner and George H. Smith of The Voluntaryist in 1982, and is the author/editor of twelve books, the latest of which is "The Art of Being Free". Follow her work at http://www.wendymcelroy.com.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2013 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014