Tax Break

Who said tax is boring?

The spotlight beside the golden door

When did she renounce her first religion?

When did she renounce her first religion?

Fifty years ago today, the New York Times announced that Elizabeth Taylor  had failed in her attempt to renounce US citizenship. Required to disavow ‘all allegiance and fidelity’ to the United States, she found herself  unable to do so. Now, allegiance and fidelity are terms Ms Taylor had a lot of experience disavowing – eight lots of experience, to be precise: Mr Hilton, Mr Wilding, Mr Todd, Mr Fisher, Mr Burton (Take one), Mr Burton (Take two), Mr Warner and Mr Fortensky.

Ms Taylor, somewhat disingenuously, declared her reason for renouncing her citizenship as wanting to have the same citizenship as her then husband-for-the-first-time , Richard Burton. Had Burton, by reason of his birth, been a Welsh Nationalist (which he was patently not), the argument may have had some traction. But Taylor did not need to seek the same British citizenship as her husband for the convenient reason that she was British, born and bred.

The only reason that the Cleopatra star wished to be rid of her American passport was that she was living and working in Europe at the time, and she did not want to have to pay tax in the US.

Nothing has changed in fifty years. People are renouncing their citizenship right, left and centre (although, on this occasion, I suppose that should be ‘center’). Whereas, in the conscience-ridden and patriotic ’60s ordinary people had understandable difficulty in renouncing allegiance and fidelity – nowadays, if it will save a buck or two, who the hell cares about such outdated emotional claptrap?

Thaddeus Stevens who roomed with Al Gore at Harvard

Thaddeus Stevens who roomed with Al Gore at Harvard

But, of course, as in so many other respects, this aspect of  US Tax Law is insane. Eritrea is the only other nation that taxes income on the basis of citizenship. I admit that I have never been to Eritrea (in fact, I would not know where to find it on a map, so it is just as well I have never tried to get there), but my assumption is that Fifth Avenue it is not. One can almost sympathize with successive Eritrean governments trying to plug their fiscal hole with takings from comparatively wealthy citizens abroad. One could also sympathize, if one were living a hundred and fifty years ago, with Thaddeus Stevens and his House Ways and Means Committee wanting to clobber Yankees escaping the Civil War. But things have moved on since then. The  dysfunctional American tax system allows multi-national corporations to shelter profits overseas, provides countless tax breaks to domestic taxpayers and has enough loopholes to fill whatever you can fill with loopholes. So, choosing to chase expatriates not currently benefiting from the public spending of tax revenues is barmy.

Beyond the idiocy of citizenship-based taxation, it is the offer of a ‘Get out of jail free’ card by relinquishing citizenship that I, a non-American with no aspirations to become one, find distasteful. I am very proud and happy that I became an Israeli citizen a quarter of a century ago. This is my home. This is the place where  I raised my children and the place where they are now raising theirs. But I am also proud of being British. It was Britain that offered my grandparents refuge when, over a century ago, they had to escape the stink-hole that was, and possibly still is, Ukraine. It was Britain that stood alone against the greatest evil yet known to man in 1940 and 1941. It was Britain that gave me the education that enabled me to get on in life. Britain does not present me with a dilemma. There is no reason for me to consider giving up my citizenship.

Expatriate Americans, on the other hand, faced with horrendous annual reporting requirements, as well as potentially horrible taxes, have to make a real decision. For those with a conscience, it is an almost impossible situation. How does a native-born American disavow ‘all allegiance and fidelity’? Even I, a non-American, would have difficulty making a  statement like that about the one nation on the planet that, when push came to shove,  has held it all together for the last hundred years.

Still liable to tax

Still liable to tax

Come on Uncle Sam. This year marks the 150th anniversary of the end of the  Civil War. If you can make peace  with Cuba, you can  make peace with your expatriates. They are the best ambassadors you’ve got (although I’m not sure about Liz Taylor – she was a bit of an embarrassment at times, even for an American).

 

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One thought on “The spotlight beside the golden door

  1. Love the use of “barmy”

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