Rich Runaway Slaves

The United States of America has historically treated its runaway slaves as something less than human beings entitled to freedom, fairness and equality under the law.

Dred Scott v Sanford, a.k.a. the infamous Dred Scott Decision by the U.S. Supreme Court in 1857, illustrates the point. The court ruled that human beings of African descent brought to the United States as slaves and their dependents, whether or not slaves, were not protected by the U.S. Constitution and were not U.S. citizens.

Congress never had any authority to prohibit slavery in federal territories, said the court, because slaves were not citizens, could not sue in court, and as private property, could not be taken away from their owners without due process of law.

It took a Constitutional Amendment after the Civil War to nullify this horrible decision. The Fourteenth Amendment, ratified in 1868, provides that "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

But what if a United States citizen, for good, sound and practical reasons, wishes to renounce his or her citizenship and become a citizen somewhere else?

Well, in that case their “owners,” the political parasitical class of the United States government, treats them like runaway slaves.

The government indignantly demands its pound of flesh.

Lots of rich people, for good, sound and practical reasons are choosing to renounce their U.S. citizenship these days and the parasite politicians are in a state of apoplexy.

Wealthy socialite Denise Rich has renounced her U.S. citizenship recently and now resides in London. By doing so, tax lawyers say she is able to legally avoid paying significant taxes on her estate. In January, Rich put her Fifth Avenue Manhattan penthouse on the market, according to her real estate agency, Corcoran. The property, which boasts 20 rooms and 11 baths, is on sale for $65 million.

"It may not be coincidental that some of these high profile expatriations are occurring when asset values have been relatively depressed," said tax attorney Dean Berry. According to expatriation tax legislation passed in June 2008, she is considered a covered expatriate and will therefore have to pay an exit tax on the net gain calculations of her assets.

In 2011, nearly 1,800 people renounced their U.S. citizenship, a six fold increase from 2008. Experts say the increase in expatriations comes in part because of the Internal Revenue Service’s crackdown on undeclared and untaxed foreign holdings of U.S. taxpayers.

Unlike many countries, the U.S. taxes citizens and residents on their worldwide income, but the rules were loosely enforced for many years. That changed after the terrorist attacks on Sept. 11, 2001, and, separately, evidence that giant Swiss bank UBS and other offshore providers were encouraging U.S. taxpayers to hide assets abroad. If Rich has extensive foreign holdings, “she just may not want to pay U.S. tax on that income,” another tax attorney opined.

Other rich folks in the U.S. are also facing the prospect of higher tax rates next year. Even if Congress extends current tax rates for a year or two, a new 3.8% tax on investment income for most couples with adjusted gross income above $250,000 ($200,000 for singles) will take effect in order to help pay for the heath-care overhaul.

Rich will still pay a stiff price for renouncing her citizenship. She’ll owe exit taxes. U.S. citizens and residents who expatriate are treated as though they sold all their property the day before they renounce, even if they will continue to own it and pay property or other federal, state or local taxes. Capital gains are taxed at the current top rate of 15%, and some assets (such as individual retirement accounts) are subject to tax at ordinary income rates as high as 35%.

She will also have to show proof of tax compliance for five years, and may have trouble re-entering the U.S. without a visa.

Facebook co-founder Eduardo Saverin is another prospective victim of the parasites. He stands to rake in about $3.84 billion from his 4 percent share of the company which recently went public. Ordinarily he would have to pay several taxes, including taxes on salary and investments. He’d have to pay about $600 million in capital gains taxes whenever he sold his Facebook shares.

Saverin became a U.S. citizen in 1998, having moved to the country in 1992 from Brazil. But he also renounced his U.S. citizenship for residence in Singapore where there is no capital gains tax. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said a spokesman for Saverin.

Of course, he’ll have to pay the same exit tax which Rich will pay even if he doesn’t sell his shares. Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, said a tax attorney. “Once it's public you can’t fool around with the value.”

Government parasites, Sens. Charles Schumer (D-N.Y.) and Bob Casey (D-Pa.) announced plans to introduce a bill to respond to Saverin’s move, which they characterize as a despicable “avoidance scheme.”

“The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country,” says their press release, and the legislation would also bar individuals like Saverin from re-entering the country.

Their bill will be called the “Ex-PATRIOT” Act, which stands for the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act. It provides that “any expatriate with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for tax avoidance purposes,” and they would pay 30 percent capital gains tax — the same rate as people pay in the U.S.

Sen. Casey said that actions such as Saverin’s are an insult to middle-class Americans. “We simply cannot allow the ultra-wealthy to write their own rules… Mr. Saverin has benefited greatly from being a citizen of the United States but he has chosen to cast it aside and leave U.S. taxpayers with the bill.”

Our government parasites unabashedly count the citizens of the United States of America as little more than slaves. Casey and the rest of the U.S. government parasites in Washington are screaming that anyone who wants to legally take necessary steps to preserve his own legally acquired property and assets from the predatory tax authorities in this country is the equivalent to a runaway slave who has deprived the owner of his value.