Divorcing Lady Liberty

Numerous recent news stories have reported on high-net-worth Americans renouncing their U.S. citizenship to protect assets from high tax rates. Last Friday, a Wall Street Journal editorial suggested the U.S. government should not seek to “punish” ex-citizens through high “exit taxes.” Instead, Congress should work “to make the U.S. so appealing and dynamic again” that people will be “sorry [they] ever left.”

It seems unreal that citizens should find it in their interest to leave the United States of America. Our country and its material success were built by millions of the world’s “huddled masses, yearning to breathe free.” Men, women, and children have come to America for centuries in search of freedom, justice, and an upwardly mobile future that results from both. When the tax code is so punitive that Americans would relinquish willingly the rights and privileges of U.S. citizens, we know we have a problem.

Our tax policies should encourage entrepreneurs, investors, and individuals of financial means not only to come here but to stay. Yet, it bears remembering that our identity as Americans and our relationship with our country should have value to us beyond whether they are financially “worthwhile.” Americans have grown used to acquiring whatever we desire, but our American heritage can’t be purchased―and you can’t put a price on freedom. That’s why it’s a sorrow to see Americans choosing to go.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

Learn more at cascadepolicy.org.

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Posted by at 11:08 | Posted in Economy, Taxes, Uncategorized | Tagged , , , | 32 Comments |Email This Post Email This Post |Print This Post Print This Post
  • 3H

    Is this a relatively new problem?  Because in the past tax rates on the rich, etc…, have been higher.  In some cases, much higher.  Did we have a problem in those years with expatriation?   If not, why not?

    Where are they going?

    How much do we have to pay to keep them here, and is it worth it?

    • valley person

       The tell is in the “numerous recent news stories…”

      No data, just more nonsense thrown out there to gain sympathy or scare people into all the rich people are leaving the island. I would venture there are far more rich people trying to get in than out. And as you say, the present tax rates on the rich are at their lowest point in many decades.

      Nevertheless, the rich have plenty of money to get other people to spread this nonsense around to make it seem like fact. When will we catch on? When will we stop worrying about the rich? 

      • JoelinPDX

        You have to be living on a fixed income…maybe Social Security based on your minimum wage job. That’s the only thing that can possibly explain your vitriol toward anyone who has a little money.

        • valley person

           Try to think of a different reason, because you aren’t even close.

          • 4real

            basement dwellers unite!!!!

          • 3H

            Is their next meeting in your basement?  Will your mom be serving milk and cookies?

    • JoelinPDX

      Actually they’re leaving because they’re afraid of what your boy Barry Obozo is doing to this country. They’re worried that if he gets re-elected he’s going to flush.

      • 3H

        Really?  He seems to be pretty much in the pocket of the rich already.  Not sure what more they could ask for.  He’s not holding them accountable.  Any talk of tax increases is pretty minimal.  I’m gonna go with pure, unadulturated, greed.

  • Bob Clark

    In the past – prior to Ronald Reagan’s presidency – stated marginal income tax rates were much greater than currently.  However, there were numerous loophopes which allowed the super rich to escape with much lower realized tax rates.  One of the biggest escape routes was for a small business entreprenuer to file as a S chapter under corporate tax rates, and income would typically be minimized and kept within the business as a form of deferred compensation.

    A significant chunk of the modern era’s growing income gap is actually due to the 1986 tax “simplification” act which set into trend entreprenuers filing not as S corporations as previously but as personal income filers.

    So, the current conversation of hiking progressive marginal personal income tax rates is a sharp change for those of higher income means.  Even those of middle income means are lured to relocate to lower income tax rate states.  We’ve seen a significant number of Oregon CEOs re-locate just across the river in Washington state, inorder to avoid Oregon’s 9-plus marginal income tax rate.

    • 3H

      Perhaps some of them are afraid, and moving, because they’re worried  that the public will push Obama administration into finally filing charges against those that lied and scammed their way into greater wealth.  

      Because ya can never, ever, have too much, or even enough.

  • Chana Cox

    It is true that on paper we have had higher marginal tax rates on the rich.  It is also true that those rates could be avoided through the so-called loop holes.  

    One of the factors that prevented most wealthy Americans from renouncing their citizenship to minimize taxes was that many European countries had still higher taxes than we did.  Now we probably have the highest income and corporate tax rates in the developed world. 

    Within the United States, the movement from high income tax states to low income tax states has been going on for decades.  

    • valley person

       Our low rates of taxation on the rich are also largely avoided through loopholes. Consider carried interest. Consider what Mitt Romney paid on a 20 million $$ income.

      “Now we probably have the highest income and corporate tax rates in the developed world. ”

      No we do not. We are well below the midpoint of OECD countries on income taxes. Our effective corporate tax rate is only about 12%, also far below the middle.

      • 4real

        Send more in you fool if that is what you want. Just leave the rest of us alone.

  • 4real

    If all the rich people leave how will we continue to support the 50% of US citizens unashamedly on the doll??? I ask you. How?? And they must be supported, as they are unwilling to support themselves and we are a caring peoples.

    • valley person

       On the doll? 50% of Americans are mounting blow up dolls? And with no same?

      Things are even worse than I suspected.

      What is a peoples?

      • 3H

        I’ll betcha there almost all men.. to a man.  😉

        • 3H

          they’re

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