Tag Archives: taxation without representation

Americans abroad opposing "taxation-based citizenship" should retire the "Taxation Without Representation" argument

In a recent comment reproduced as a post at the Isaac Brock Society and at Citizenship Taxation, I argued that it’s time for people to unite with one simple message. The message captured in the following tweet:

“The United States must not impose “worldwide taxation” on those who have “tax residency” in other countries and do not live in the United States!”
I propose this for the following reasons:
1. There is not a single person or organization on the planet that could not support this and credibly claim that they want to end U.S. extra-territorial tax policies.
2. It places the focus of U.S. tax policies on how the policies affect the citizens and residents of other countries and NOT on those who identify as U.S. citizens living abroad AKA “Homelanders Abroad”. There is no suggestion of seeking exemptions for certain “tax compliant people”, …
3. It resonates with “accidentals” (AKA those carbon life forms that the United States considers to be life long tax slaves) because they were born in the United States.
4. It naturally leads to a discussion of how U.S. extra-territorial taxation affects the economies (“steals from their tax base) of other countries.
5. By focusing on “tax residents” of other countries, it avoids alltogether the idiotic “baff gablle” of: “Well, you are a member of the political community”, “patriotism”, “right to live in the USA” and all of these “academically focussed) distractions.
6. It avoids getting into the incredibly difficulty problem of explaining precisely HOW the Internal Revenue Code applies in different countries (in practical terms it applies differently in different countries). Almost nobody understands how the Internal Revenue Code actually applies in other countries (including the IRS) …
7. It bypasses arguments like: “What do you mean you are complaining? I hear you exclude about 100,000 using this thing called the “Foreign Earned Income Exclusion”. If you can exclude 100,000 when you don’t even live in the USA, then why can’t I as a Homelander exclude at least 100,000″ …
Again to agree to the message:
“The United States must not impose “worldwide taxation” on those who have “tax residency” in other countries and do not live in the United States!”
should avoid the distractions described in points 1 – 7.
“Taxation without representation argument”
But, I want to focus on an argument/point that I think is a particular time waster and probably hurts the cause rather than helps it.
The ONLY Americans who have representation in the political process are those who have the money to “buy the laws” that they want. The American legislative process is nothing more and nothing less than a “pay to play casino”. It’s that simple. America is one of the world’s most dysfunctional democracies. In fact it is a democracy only in the sense that some Americans (including some but not all Americans abroad) have the right to vote. Having a vote is a necessary but not a sufficient condition for a functioning democracy. A vote matters only if there are viable candidates to vote for. In the America of today, who the candidates are, is tightly controlled by the political parties. Do you really think that if America had a functioning democracy, that allowed for democratically selected candidates, that the 2016 election would have come down to:
Donald Trump vs. Hilary Clinton?
Not a chance. My point is that almost no Americans have political representation in any case. By making the “taxation without representation argument”, Americans abroad are asking for something that Homelanders don’t have!

So, please let’s retire the:

“Taxation without representation argument”!

John Richardson
My morning thoughts on this were generated by the comments in the following tweets (all of which were generated by the Financial Times discussion on the Sec. 965 Transition Tax: