New Zimbabwe: The Punishment Imperative
Entrepreneurial business leaders viscerally understand the tension between vision and results. You start by painting a picture of sunlit uplands just ahead, accessible through the agency of your cool new technology or service. If you are smart, you allow enough data through the reality distortion field to drive vision adjustments as needed.
You see, in the private sector, the voluntary decisions of your customers to "eat the dog food," as we put in here in Nerdville, are the key data points. You certainly don't punish ex-customers--how could you?--you woo them back by doing a better job than your competitors. Customers beginning to flee your platform don't have a problem, you do. They aren't being ungrateful, you just aren't doing your job. The world changes, and smart entrepreneurs adjust the vision-thing to accommodate changed circumstances.
Smart politicians do the same thing. When pondering reelection after the 1994 Republican takeover of the House of Representatives, Bill Clinton famously declared an end to the era of big government and acceded to conservative welfare and budget reforms that invigorated the national economy. Clinton's pragmatic turn allowed him to cruise to a second term, even earning the Big He enough political capital to squeak through impeachment after being caught lying under oath.
By this standard Democratic Senators Chuck Schumer and Bob Casey are anything but smart. Having constructed the inevitable no-growth liberal utopia, conflict between vision and reality is resolved by denying the latter. So, when customers begin fleeing for competing countries, as with nearly 1800 who renounced their U.S. citizenship last year, the response is to punish the customers.
From ABC News:
Sen. Chuck Schumer, D-N.Y., has a status update for Facebook co-founder Eduardo Saverin: Stop attempting to dodge your taxes by renouncing your U.S. citizenship or never come to back to the U.S. again.
In September 2011, Saverin relinquished his U.S. citizenship before the company announced its planned initial public offering of stock, which will debut this week. The move was likely a financial one, as he owns an estimated 4 percent of Facebook and stands to make $4 billion when the company goes public. Saverin would reap the benefit of tax savings by becoming a permanent resident of Singapore, which levies no capital gains taxes.
At a news conference this morning, Sens. Schumer and Bob Casey, D-Pa., will unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act to respond directly to Saverin’s move, which they dub a “scheme” that would “help him duck up to $67 million in taxes.”
The senators will call Saverin’s move an “outrage” and will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.
The U.S. has the highest corporate tax rate in the world, the most regulated financial markets, escalating personal income tax rates applied on a global basis, staggering sovereign debt, and multiple industries prostrate due to excessive government interference. All this catalyzes a never-ending Great Recession, and the response of the "visionary" ideologues responsible is, like Zimbabwe strongman Robert Mugabe, to punish the miscreants attempting to flee.
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Mar '11
Re: New Zimbabwe: The Punishment Imperative
Yes, clearly this is the wrong approach. No what we need is a wall. A Berliner Mauer as it were. Of course we shouldn't completely seal ourselves off but one entry/exit point will be sufficient. We shall call it Checkpoint Charlie say located on Ellis Island, call me sentimental.
Edited on May 18, 2012 at 4:12amJan '11
Re: New Zimbabwe: The Punishment Imperative
Schumer and his cronies want the right to impose their regulations and taxes, but to prevent others from responding in their self-interest.
We live in a dynamic world. Each action spawns a reaction. But these strategic, brilliant lawmakers want the world to stand still.
Strategy is when you make your decision based on what you expect others to do. Strategy, then, is a form of respect. You respect others' right to make decisions for themselves. You appreciate that they have their own self-interests. You're actually counting on others to move with their own freedom and to pursue their own interests, from their own point of view. That's respect.
When you create a business-killing regulatory and tax environment, and then rely on raw power to punish people for responding differently than you want them to ... that's the essence of tyranny. Note their immediate response. Call in the media, bash someone, and then threaten legislation.
These senators, basically, can't think in 3D. They can't handle a dynamic world, and they're angry about it.
As my old coach used to say, some offenses are mad that defenses are allowed to tackle.
May '10
Re: New Zimbabwe: The Punishment Imperative
Chuck is pretty much the husband in Sleeping With the Enemy at this point. “You made me tax you that hard! Get back here where you belong, and finance me some dinner!”
May '12
Re: New Zimbabwe: The Punishment Imperative
Glad you brought up Mugabe, perhaps we should rename the Democrats the Zanu-Democrats for their policies.
The truth is that people can still leave the US as easily as they came. Some smart country, somewhere in the world, will actively court and offer big incentives to over-taxed US private-sector people. Perhaps they'll create a special economic zone, with good schools, low taxes, and citizenship. A marginal tax rate of 0=12% vs. 50% or more in California or New York is hard to turn down. Many could go. Some will go. That country will reap a huge windfall. The US will effectively have scared away the geese that lay the golden eggs.
Edited on May 18, 2012 at 2:59amJul '11
Re: New Zimbabwe: The Punishment Imperative
3 of my folks renounced in the last 2 years and all because they saw Obama's writing on the wall in 2013. I know more about the nuances of alternative citizenship and moving money to Panama, Switzerland, and Asia than the average 2.5%er. When the wealthy fear asset seizure they move.
Personally I had the chance to start a new life 3 years back and for decent money if I went to NZ or OZ and, while I strongly considered it, I would rather fight for my country.
Nov '11
Re: New Zimbabwe: The Punishment Imperative
There is a very good post on this on the Member Feed by Knate, who did some interesting math.
Feb '11
Re: New Zimbabwe: The Punishment Imperative
"will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country"
The reason why this would not be an unconstitutional ex post facto law is???
Feb '11
Re: New Zimbabwe: The Punishment Imperative
KC Mulville...your comment reminded me of a passage from George Eliot:
"Fancy what a game of chess would be if all the chessman had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary's men, but a little uncertain also about your own . . . You would be especially likely to be beaten if you depneded arrogantly on your mathemactical imagination, and regarded your passionate pieces with contempt. Yet this imaginary chess is easy compared with a game man has to play against his fellow-men with other fellow-men for instruments."
Eliot wrote the preceding passage circa 1866. Most politicians and bureaucrats, plus many academics and even some executives, still haven't figured it out.
Apr '12
Re: New Zimbabwe: The Punishment Imperative
The US has the highest corporate tax rate in the G20. Compare is it thirty percent to Socialist Canada where we are at 15 percent, going down to 12 percent next year. We are the Silicon Valley of the North with Gaming, video and social media being targeted as top priority growth industries with lots of interesting tax breaks. No Apples but many small companies making a decent living for the owners and employees. These goverment officials Smashing blindly at Facebook's early investor, Saverin, who is making a sensible financial decision as someone who was not born in America, is myopic and foolish. Swatting at flies. Let the guy go by the rules and buy US property, visit, spend and leave. Do these politicians get out of Washington much? Fifteen years ago, the books that predict the future were saying no one will want the American citizenship because of their global tax system. Ironically, would be better off with a Zimbabwe passport and citizenship.
Mar '11
Re: New Zimbabwe: The Punishment Imperative
david foster: KC Mulville...your comment reminded me of a passage from George Eliot:
"Fancy what a game of chess would be if all the chessman had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary's men, but a little uncertain also about your own . . . You would be especially likely to be beaten if you depneded arrogantly on your mathemactical imagination, and regarded your passionate pieces with contempt. Yet this imaginary chess is easy compared with a game man has to play against his fellow-men with other fellow-men for instruments."
Eliot wrote the preceding passage circa 1866. Most politicians and bureaucrats, plus many academics and even some executives, still haven't figured it out. · 13 minutes ago
Fantastic quote, on many levels.
Aug '10
Re: New Zimbabwe: The Punishment Imperative
Personally, I don't much like people who withdraw their loyalty to my country, but one of the most fundamental differences between a free country and a tyranny is that a free country doesn't try to punish you for leaving. Some places like North Korea simply won't let you leave, some like Cuba won't let you leave with your family, and some will let you take your family but you have to leave your property. Are we supposed to be thankful that Chuck Schumer only wants 30%? Does he have any idea how parodically leftist-dictatorish he appears?
Edited on May 18, 2012 at 6:11amMar '12
Re: New Zimbabwe: The Punishment Imperative
Paul, great post with #11.
This thread sent me searching for "The Complete Andy Rooney" paperback book set I received for Christmas in 1982 when I was 14. The books are compilations of his "60 Minutes" commentaries.
About 1981, in "The Coldback Problem", he inverts the then common story of defectors. In short, Rooney paints a portrait of US citizens braving the Bering Strait to get to Siberia (swimming the last mile and thus being dubbed "coldbacks"), Yankees defecting in Murmansk when visiting for exhibition games, and the US Mexico border without guards as the dream is no longer the US but Russia. It was a brilliant take down of "Soviet Love" by a lifelong democrat.
His imagery, and the theme of his last line, have stuck with me all these years: "When these events come to pass, I'll believe we have a serious problem with the Soviet Union, but while everyone is trying to get out of there and into here, I'll continue believing they have more of a problem with us than we have with them".
No more soviets, but we are much closer to "a problem" than Rooney ever envisioned in '81. Thanks Chuck!
Mar '11
Re: New Zimbabwe: The Punishment Imperative
George Savage: ...The senators will call Saverin’s move an “outrage” and will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship....
Wouldn't this amount to a bill of attainder, and hence be unconstitutional? Can any of the many lawyers on Ricochet weigh in on this?
Mar '11
Re: New Zimbabwe: The Punishment Imperative
Blue State Blues
Wouldn't this amount to a bill of attainder, and hence be unconstitutional? Can any of the many lawyers on Ricochet weigh in on this? · 1 minute ago
I'm not a lawyer, but it would seem that it would be a bill of attainder if they tried to make it retroactive.
How long before the Democrats are calling for a fence to keep people in?
Dec '10
Re: New Zimbabwe: The Punishment Imperative
Judge Learned Hand stated in the U.S. Court of Appeals case of Gregory v. Helvering in 1934, "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Apr '11
Re: New Zimbabwe: The Punishment Imperative
Yah, we should make our taxes and regulations more globally competitive and all that we all agree...but when I hear a story like this, honestly, my first impression is "screw that guy".
While I think I would be cool enough to not pass a law to punish him for dropping citizenship I would not be above being personally petty against him as a matter of principle. But, then again I subscribe to a policy of bitter and lasting vengeance in all things.
The one law I would pass is one stating that you can never regain US citizenship after you have renounced it.
Re: New Zimbabwe: The Punishment Imperative
If the United States rededicated itself to honoring its Constitution, affirming individual liberty in its tax code and regulatory procedures, we would have no cause to debate wealthy individuals trying to flee its jurisdiction. Instead we would be trying to sort out the applications for citizenship.
Consider that the political left is enthusiastic about importing clients of the welfare state on a massive scale, whether they arrive legally or illegally, but is quite happy to cause successful job-creating taxpayers to "self deport," provided they never again darken our shores.
Oct '10
Re: New Zimbabwe: The Punishment Imperative
I don't understand why people in the U.S. get all wrought up over changing one's residence and nationality. It's particularly curious because, unless they are descended directly from Native Americans or slaves, it's overwhelmingly probable their ancestors include people who left the nation of their birth, renounced its citizenship, and became U.S. citizens (or gave birth to children who were citizens). Many of these people came to the U.S. to flee oppression, seek individual opportunity, and live in liberty.
To those who define liberty as simply being able to live their lives as they wish without having the state constantly meddling and obstructing them at every step and think that U.S. residence and nationality are the best in that regard, I'd suggest they get out more.
None of this has anything to do with tax rates.
Apr '11
Re: New Zimbabwe: The Punishment Imperative
Percival, Blue, so long as it taxes only the future profits of expats, it's not ex post facto in letter. So long as it clearly targets a broad category of people, it's not a bill of attainder. Politicians can use lynchmob rhetoric without their bills falling prey to the anti-lynching protections of the Constitution. If it was constitutionally suspect, the rhetoric wouldn't hurt, but this should be easy to craft compliantly. Not that it matters, being drafted for politics, rather than being likely to pass.
Dec '10
Re: New Zimbabwe: The Punishment Imperative
These discussions remind me of Reagan's point that the Democratic party had left him. Indeed, the GOP has mostly left conservatives, over the years.
I don't consider that Saverin has renounced his U.S. citizenship. The U.S. has renounced him.
In the meantime, you may wish to seek out a Rubio interview with Cavuto, wherein he indicated his belief that such statutes may already be on the books, but merely go unenforced. Naturally, Rubio's point was that the proposed legislation wasn't the issue; the reasoning for Saverin's move was the issue.