Introduction And Purpose
The 2008 notes of a law student about Justice McKenna's decision 1924 decision in #CookvTait. The basis of the ruling is more about the meaning of citizenship under principles of international law. It appears to have very little to do with tax. pic.twitter.com/Jb0zE5qTca
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 6, 2022
The focus of this blog has always been on citizenship, taxation and citizenship taxation. Although taxation has always been perceived as a necessary burden, citizenship has sometimes been a benefit and sometimes been a burden. James Dale Davidson, writing in “The Sovereign Individual”, expressed the view that in the 20th Century US citizenship was generally a benefit. In the 21st (digital) century US citizenship based taxation has transformed US citizenship into a burden. The numbers of people renouncing US citizenship are a testament to this new reality.
The Weaponization Of US Citizenship – Two Methods
The history of US citizenship as documented in Amanda Frost’s “You Are NOT American”, is an epic story of the “weaponization of citizenship”. I highly recommend Professor Frost’s book – “You Are NOT American” to those interested in the evolution of US citizenship.
The Weaponization Of Citizenship: From “You Are NOT American” to “You ARE American” https://t.co/ei4PadNr2x
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 7, 2022
Method 1: Weaponization By Claiming The Individual Does NOT Meet The Requirements Of Citizenship
Regardless of the benefits or burdens of US citizenship, it is clear that the United States has a long history of “weaponizing US citizenship”. Professor Amanda Frost in her superb book “You Are NOT American” provides many examples of how the United States has used the concept and status of citizenship to either punish or reward individuals. Generally, Professor Frost describes a history where the use (or misuse) of America’s “nationality laws” has created hardships for people. Citizenship is a part of who people are. It’s part of their personal identity. Citizenship (presumptively) gives people a place or country they can call home. Citizenship (presumptively) gives people a place where they can live without fear of removal. Citizenship matters and the loss of citizenship can be a frightening and destabilizing event in the lives of an individual. It was not until 1967 that the United States Supreme Court in Afroyim ruled that US citizenship was conferred by the Constitution, belonged to the individual and could not (at least if born or naturalized in the US) be taken by the Government. (Of course that is of little comfort to those who can’t prove their US citizenship.)
Method 2: Weaponization By Claiming The Individual Does Meet The Requirements Of Citizenship
A minority of countries in the world confer citizenship based on and only on birth in the country.
Only two countries in the world impose worldwide taxation based on and only on the fact of citizenship.
The United States is the ONLY country that does both!
FATCA assisted the United States in exporting US taxation into other countries and on to the individuals who live in and are tax residents of those countries. In short: the accusation of being a US citizen living outside the United States subjected one to the “disabilities” and “criminalization” imposed by the US extra-territorial tax regime.
The US Supreme Court, Justice Joseph McKenna, And Citizenship In The Early Part Of 20th Century
From Dred Scott to Afroyim v. Rusk, the Supreme Court of the United States has played a vitally important role in being the tribunal of last resort in matters of citizenship. Between 1915 and 1924 the Supreme Court presided over two significant cases where US citizenship was either the primary issue or the primary consideration. These cases are MacKenzie v. Hare (decided in 1915) and Cook v. Tait (decided in 1924). Interestingly, both of the decisions were written by Justice Joseph McKenna. Justice McKenna was not considered to be one of the stronger judges of the US Supreme Court. His appointment was generally regarded as an appointment based on politics and not based on merit.* Like all judges he surely addressed the issues in the context of the world in which he lived.
The World Of Justice McKenna And The Meaning Of Citizenship Under International Law In The 1920s
After the end of World War 1 the international community began to consider/reconsider international rules regarding nationality. Those interested in a “deep dive” are invited to read the following report – which included a draft “nationality” convention – which originated at Harvard University.
That proposed treaty was composed of 22 Articles. Significantly, the proposed treaty focused on the rights of the state in relation to its citizens and NOT on the rights of the citizens in relation to the state! (It was not until the 1948 Universal Declaration Of Human Rights that the international community focused on the rights of individual citizens.)
For example, Article 1 of the Harvard proposal states:
As the terms are used in this convention,
(a) nationality is the status of a natural person who is attached to a state by the tie of “allegiance”;
(b) a “national” of a state is a natural person attached to that state by a tie of “allegiance”.
(c) “naturalization” is the process by which a state confers its nationality upon a natural person after birth.
There is a clear emphasis on “allegiance”. In addition, other Articles (notably Articles 12 and 13) express clear presumptions against having more than one nationality. It is reasonable to infer that the period that Justice McKenna’s understanding of citizenship was that: (1) it was largely about the rights of countries/states (2) citizenship was the “allegiance” the citizen had to the country and (3) the concept of “allegiance” seemed to create strong presumptions against dual nationality. It is probable that these principles supplied the lens through which Justice McKenna understood citizenship.
Therefore, it is likely that Justice McKenna would have thought about “citizenship issues” in terms of the rights of the state in the individual or the obligations of the citizen to the state. A reasonable extension of this principle would have seen the state would represent the individual to other nation states. It is unlikely that Justice McKenna would have considered that citizens had rights as individuals. (After World War 2, the world began to consider the rights of the individual. The consideration of citizenship in terms of the rights of individuals seems to have arisen in the aftermath of World War 2.
Therefore the 1920s was characterized by a “culture of citizenship” in which individual citizens were considered to be the property and responsibility of the state and not as individuals with rights against the state. This is the context in which Justice McKenna considered the cases of MacKenzie v. Hare and Cook v. Tait.
MacKenzie v. Hare – 1915
As described in Professor Frost’s book, Ms. MacKenzie was born in the United States and was therefore – as per the 14th Amendment – born a US citizen. She married a non-citizen. The US expatriation laws of the time mandated that any US citizen woman who married a non-citizen would automatically lose her US citizenship. Interestingly this provision of US law conflicted with Article 19 of the Harvard draft nationality convention. Article 19 specifically stated that:
A woman who marries an alien shall, in the absence of a contrary election on her part, shall retain the nationality which she possessed before marriage, unless she becomes a national of the state where her husband is a national and establishes or maintains a residence of a permanent character in the territory of that state.
The issue was heard by the US Supreme Court in 1915. The decision, written by Justice McKenna, ruled that Ms. MacKenzie did, notwithstanding her birth in the United States, lose her US citizenship by marrying a non-citizen.
Mr. Justice McKenna’s ruling and conclusion in MacKenzie v. Hare is captured in the following paragraph:
It would make this opinion very voluminous to consider in detail the argument and the cases urged in support of or in attack upon the opposing conditions. Their foundation principles, we may assume, are known. The identity of husband and wife is an ancient principle of our jurisprudence. It was neither accidental nor arbitrary, and worked in many instances for her protection. There has been, it is true, much relaxation of it, but in its retention, as in its origin, it is determined by their intimate relation and unity of interests, and this relation and unity may make it of public concern in many instances to merge their identity, and give dominance to the husband. It has purpose if not necessity in purely domestic policy; it has greater purpose, and, it may be, necessity, in international policy. And this was the dictate of the act in controversy. Having this purpose, has it not the sanction of power?
Plaintiff contends, as we have seen, that it has not, and bases her contention upon the absence of an express gift of power. But there may be powers implied, necessary or incidental to the expressed powers. As a government, the United States is invested with all the attributes of sovereignty. As it has the character of nationality, it has the powers of nationality, especially those which concern its relations and intercourse with other countries. We should hesitate long before limiting or embarrassing such powers. But monition is not necessary in the present case. There need be no dissent from the cases cited by plaintiff; there need be no assertion of very extensive power over the right of citizenship or of the imperative imposition of conditions upon it. It may be conceded that a change of citizenship cannot be arbitrarily imposed — that is, imposed without the concurrence of the citizen. The law in controversy does not have that feature. It deals with a condition voluntarily entered into, with notice of the consequences. We concur with counsel that citizenship is of tangible worth, and we sympathize with plaintiff in her desire to retain it and in her earnest assertion of it. But there is involved more than personal considerations. As we have seen, the legislation was urged by conditions of national moment. And this is an answer to the apprehension of counsel that our construction of the legislation will make every act, though lawful, as marriage, of course, is, a renunciation of citizenship. The marriage of an American woman with a foreigner has consequences of like kind, may involve national complications of like kind, as her physical expatriation may involve. Therefore, as long as the relation lasts, it is made tantamount to expatriation. This is no arbitrary exercise of government. It is one which, regarding the international aspects, judicial opinion has taken for granted would not only be valid, but demanded. It is the conception of the legislation under review that such an act may bring the government into embarrassments, and, it may be, into controversies. It is as voluntary and distinctive as expatriation, and its consequence must be considered as elected.
Of particular significance are the following two sections:
First, finding that the nationality of the wife follows the nationality of the husband …
The identity of husband and wife is an ancient principle of our jurisprudence. It was neither accidental nor arbitrary, and worked in many instances for her protection. There has been, it is true, much relaxation of it, but in its retention, as in its origin, it is determined by their intimate relation and unity of interests, and this relation and unity may make it of public concern in many instances to merge their identity, and give dominance to the husband. It has purpose if not necessity in purely domestic policy; it has greater purpose, and, it may be, necessity, in international policy.
Second, reasoning that if wife and husband have the same nationality and that if the husband is not a US citizen that this could create difficulties for the United States in its interaction with other nations …
As a government, the United States is invested with all the attributes of sovereignty. As it has the character of nationality, it has the powers of nationality, especially those which concern its relations and intercourse with other countries. We should hesitate long before limiting or embarrassing such powers.
He seems to be saying that issues surrounding nationality are an attribute of the sovereignty of nation states and that the nation state represents its citizens alone in interactions with other nation states.
Foreshadowing Afroyim v. Rusk, in MacKenzie v. Hare, Ms. MacKenzie argued (in part) that the 14th Amendment gave her a constitutional right to her US citizenship and that Congress did NOT have the authority to strip her of her citizenship. (Note that this was the same argument that was the basis of the decision in the 1967 decision in Afroyim v. Rusk.) Justice McKenna seems to recognize that this is one of Ms. MacKenzie’s arguments when he wrote:
An earnest argument is presented to demonstrate its invalidity. Its basis is that the citizenship of plaintiff was an incident to her birth in the United States, and, under the Constitution and laws of the United States, it became a right, privilege, and immunity which could not be taken away from her except as a punishment for crime or by her voluntary expatriation.
Notably Justice McKenna appeared to “side step” this issue by reasoning that Ms. MacKenzie was NOT stripped of her citizenship. Rather she voluntarily performed an expatriating act with “notice of the consequences”.
Cook v. Tait – 1924
Any discussion of US citizenship based taxation begins with an acknowledgement and discussion of Cook v. Tait. Cook v. Tait was a 1924 US Supreme Court decision which is always cited for the legal proposition that:
US citizenship based taxation: Constitutional or an attribute of the sovereignty of nations
Cook v. Tait was the subject of a series of posts published at the Isaac Brock Society. The series of posts included a fascinating discussion of what the decision in Cook v. Tait actually means/says.
We may make further exposition of the national power as the case depends upon it. It was illustrated at once in United States v. Bennett by a contrast with the power of a State. It was pointed out that there were limitations upon the latter that were not on the national power. The taxing power of a State, it was decided, encountered at its borders the taxing power of other States and was limited by them. There was no such limitation, it was pointed out, upon the national power; and the limitation upon the States affords, it was said, no ground for constructing a barrier around the United States “shutting that government off from the exertion of powers which inherently belong to it by virtue of its sovereignty.”
The contention was rejected that a citizen’s property without the limits of the United States derives no benefit from the United States. The contention, it was said, came from the confusion of thought in “mistaking the scope and extent of the sovereign power of the United States as a nation and its relations to its citizens and their relations to it.” And that power in its scope and extent, it was decided, is based on the presumption that government by its very nature benefits the citizen and his property wherever found, and that opposition to it holds on to citizenship while it “belittles and destroys its advantages and blessings by denying the possession by government of an essential power required to make citizenship completely beneficial.” In other words, the principle was declared that the government, by its very nature, benefits the citizen and his property wherever found and, therefore, has the power to make the benefit complete. Or to express it another way, the basis of the power to tax was not and cannot be made dependent upon the situs of the property in all cases, it being in or out of the United States, and was not and cannot be made dependent upon the domicile of the citizen, that being in or out of the United States, but upon his relation as citizen to the United States and the relation of the latter to him as citizen. The consequence of the relations is that the native citizen who is taxed may have domicile, and the property from which his income is derived may have situs, in a foreign country and the tax be legal — the government having power to impose the tax.
May 5, 1924
Notably the judgment includes:
Or to express it another way, the basis of the power to tax was not and cannot be made dependent upon the situs of the property in all cases, it being in or out of the United States, and was not and cannot be made dependent upon the domicile of the citizen, that being in or out of the United States, but upon his relation as citizen to the United States and the relation of the latter to him as citizen.
Justice McKenna appears to base his decision on the meaning of citizenship and not on the effect of taxation. In other words, the decision is based on who the citizen is (a natural person who has allegiance to the United States) and NOT on the activity in question or whether the citizen receives any benefits in return for the payment of taxes.
What MacKenzie v. Hare and Cook v. Tait have in common
The result in each decision is based on the concept that individual citizens have legal significance as being citizens of a nation state and they owe their allegiance to the nation state. To put it simply: Individual citizens were the property of the state and that property interest was recognized as an aspect of the sovereignty of the state. MacKenzie v. Hare was NOT about citizenship per se. Cook v. Tait was NOT about taxation. Justice McKenna’s decisions in both cases was based on the relationship as citizens of the United States Ms. McKenzie and Mr. Cook and not the specific circumstances of what each was trying to do (remain a citizen) or not do (pay taxes as a citizen). It’s simple: As citizens of the United States you are the property of the United States and subject to all laws prescribed by the United States.
Therefore, Cook v. Tait is NOT a case about taxation. It is a case about the meaning of citizenship. The meaning of citizenship has clearly evolved in the last hundred years. Therefore, it is reasonable to reconsider whether citizenship taxation should be considered to be an attribute of the relationship between the citizen and the United States. This is particularly true in light of the evolution of US taxation.
John Richardson – Follow me on Twitter @Expatriationlaw
*Introducing Justice Joseph McKenna
In "Leaving the Bench: Supreme Court Justices at the End" Prof D. Atkinson references Justice Joseph McKenna's mental deterioration resulting from a stroke suffered in 2015. (Justice McKenna wrote the decisions in MacKenzie v. Hare and #CookvTait)@CSPAN https://t.co/4wPb38ZqS0
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 6, 2022
A Wikipedia entry describes Justice McKenna as follows:
McKenna resigned from the Court in January 1925 at the suggestion of Chief Justice William Howard Taft. McKenna’s ability to perform his duties had been diminished significantly by a stroke suffered 10 years earlier, and by the end of his tenure McKenna could not be counted on to write coherent opinions.
Justice McKenna in MacKenzie v. Hare: Interestingly, Professor Amanda Frost in her book: “You Are NOT American”, references Justice McKenna’s ruling in the US Supreme Court decision of MacKenzie v. Hare which held that Ethel Coope MacKenzie could be stripped of her US citizenship because she married a non-citizen. On page 90 Professor Frost writes:
The majority opinion was authored by Justice Joseph McKenna a slight man with snowy white hair, usually sporting a bow tie beneath a neatly trimmed beard. McKenna was the only justice appointed by President William McKinley during his four years in office and is generally viewed as a poor choice. Although he served on the court just a few days shy of twenty-seven years, the historical consensus is that he “made no significant contribution to legal interpretation.” Scholars of the court describe him as a “political hack.”McKenna’s contemporaries were even less kind. Chief Justice William Howard Taft said flatly “he was not a useful member of the Court.” Writing to a friend, Taft expressed his frustration that McKenna ” somehow wrote an opinion deciding the case one way when there had been a unanimous vote the other, including his own.” In keeping with this consensus, McKenna’s opinion for the court in MacKenzie v. Hare is a jumble of mostly unrelated thoughts and ideas that, strung together, gave Congress enormous power to revoke citizenship.
Justice McKenna in Cook v. Tait: A comment from the Isaac Brock Society about the Cook v. Tait decision includes:
“I just looked up McKenna’s Wikipedia entry and notice that it has been edited in the last few months to include a mention of McKenna having had a stroke in 1915. The source is a Huffington Post article that includes the following statement:
“Justice Joseph McKenna, severely debilitated by a stroke in 1915, served through ten years of significant cognitive impairment before Chief Justice William Howard Taft pressured him to resign in 1925.”
Maybe this is why Cook v. Tait is so underwhelming as a legal opinion.”