So there seems to be a firestorm over the issue of whether Facebook co-founder and Brazilian-born Eduardo Saverin should have given up his US citizenship. While some on the Right have apparently taken this as a vindication that the US tax system is one step away from the Apocalypse, and we should therefore celebrate Saverin’s courage or something, the position on the left, if I can characterize it as a position, is that Saverin deserves his own special circle in hell. Mistermix over at Balloon Juice is outraged. Josh Marshall at TPM is scandalized, and is still devoting multiple posts to the subject. The Nation is fuming. The nerve of this guy. And the comments. Jeez, it’s like stepping into the comments at NRO. The level of invective is comparable, as is the level of knowledge on occasion, since so many people apparently derive their sense of history and current events from movies. Of course, US companies, as we mention below, do this from time to time, and the outrage level has been considerably lower.
Oh, honestly. Grow up. Lots of Americans renounce their citizenship every year—although clearly not as many who become citizens every year. Some do it for tax reasons, as Saverin may be doing (although his lawyer denies it, and even if he is, it’s probably at the expense of a substantially higher tax bill now). And that’s probably not a good thing on balance, if that’s all there is to it. But as Bruce Bartlett has recently discussed, taxes may not even be the most prevalent reason why people renounce citizenship, let alone move—there’s lots of other factors as well. For one thing, foreign banks are now much less willing to extend banking services to Americans living abroad because of the recently-passed Foreign Account Tax Compliance Act. I’m certainly looking forward to my bank telling me they don’t want my business any more because the paperwork is too onerous.
Then again, we know people here in London who have lived here for decades, think of this as home (as we do), find using a British passport not at all inconvenient, and are tired of having to file with the IRS every year. Here’s the thing—even if you have never lived in the US or worked there, even if you weren’t even born there, if you’re a US citizen, you have to pay taxes to the IRS. Every year. We know people who were born in London, have lived here all their lives, and have never lived in the US. But because they were born of US parents, they’re US citizens, and therefore subject to cavalier US tax laws. And when I say “cavalier,” what I mean is the fact that the US is the only country that makes its citizens pay taxes no matter where they live—even if they have never lived, let alone worked, in the US.
There’s a more general point, and it speaks to the fact that, frankly, Americans need to get out more. Apparently the “greatest nation on earth” meme that we all grew up with, no matter how old we are, is a hard one to put into some sort of perspective. It’s not exactly American nationalist triumphalism, as Larison, for example, discusses it—but there certainly seems to be some sort of American exceptionalism at work here. Saverin himself has said he feels like a global citizen. Most of the writers (and commentators) that I’ve cited, and I’m sure there are many more, find this a preposterous statement. Why is this? Tom Paine referred to himself as a Citizen of the World. Here’s someone who grew up in Brazil (in a wealthy family threatened with kidnap, so you can already guess the socioeconomic background here). The only reason he got to live in the US in the first place, where he moved when he was 13, was because his family was rich in the first place and could pay what needed to be paid to move the family here. It’s not like he had a choice in the matter. And if his family was poor, they wouldn’t have been allowed in at all, in all likelihood.
More broadly, what intrigues me is the complete rejection across the spectrum here that anyone in their right mind would even consider not being a US citizen. It’s like moving to another planet, apparently. Well, get over it. It’s a big world out here. There are lots of places to live out here that are better run and more tolerant than the US—the UK, where I live, for example, which is certainly setting a better example of preserving the social contract than the US is these days. As is most of Europe, in fact. We know people who have moved to Singapore, and many of them may stay there forever. There are Americans, or ex-Americans, all over the world, who have no wish whatsoever to return to the US. We’re everywhere.
Why is this? Well, after the wretched politics of the past several decades, the complete obliteration of local economies and culture by the globalizing machine, the forced equivalence of militarism and patriotism that shows no signs of diminishing, the mindlessness of mainstream media, the steady march towards government by oligarchy, the emerging national security state, the desperate search for the next Mideast war to fight, the perpetual war to create a permanent underclass characterized mostly by poverty…I would think that it would be pretty obvious why some of us no longer choose to live in the US. Henry Miller called it The Air-Conditioned Nightmare (although he, of course, returned to the US to live out his days on Big Sur.) And why some of us are in the process of gaining citizenship elsewhere. We would rather live in a country where you can turn on the television news and not be shouted at, where you can get somewhere without having to drive, and in a country that doesn’t declare illegal and unnecessary wars every couple of years. The United States of America is still the best idea for a country that anyone has ever had. The reality of what America is becoming, sadly, may be another story, and seems a far cry from these ideals.
And actually, if one is going to vent one’s ire on US citizens renouncing their citizenship to avoid taxes, there are certainly better, although perhaps not easier, targets than a guy who co-founded a company that looks set to have the biggest IPO ever, and which will undoubtedly be paying gazillions in corporate taxes to the US treasury as far as the eye can see (the State of California alone looks set to clear at least three times the amount of taxes that Saverin is alleged to be saving right off the bat). Hedge fund managers, for example, whose net contribution to the sum of human happiness is almost certainly negative. But the better route to follow would be to fix America’s corporate tax system. Let’s start with no longer allowing US companies to move their headquarters offshore to avoid US taxes, for example—or if they do, then they give up their right to work for the US government, particularly companies with lucrative defence contracts. This is something worth getting upset about. If you don’t like the US tax laws, get your act together to elect people who will change them.