Tag Archives: Elizabeth Warren

Professor @Gabriel_Zucman Discusses US Taxation Of Americans Abroad and FATCA

On June 19, 2023 the Global Progressive Caucus of Democrats Abroad hosted Professor Gabriel Zucman to discuss “Fair Share Taxation And Tax Enforcement”. You may know that Professor Zucman is a strong advocate of wealth taxation. Senator Warren (in the specifics of her proposed wealth tax) appears to be a disciple of Professor Zucman’s views.

During the presentation Professor Zucman reinforced his view that “Fair Share Taxation” should include a wealth tax. Interestingly he recommends that FATCA be replaced by the CRS.

But, most interestingly he expressed his view that the current U.S. system of citizenship taxation (as it applies to most Americans living outside the United States) simply cannot be justified. Based on this video, I would say that Professor Zucman may be an ally in the fight to reform the taxation of Americans abroad.

I have put together a short twitter thread to highlight his main points. But, I do recommend that people watch the entire video. The discussion at the end is every bit as interesting (and revealing) as Professor Zucman’s presentation.

A threadreader version of the twitter thread is here:

https://threadreaderapp.com/thread/1674191242681352193.html

A pdf version is here:

ThreadReader_0_expatriationlaw_1674191242681352193

The live Twitter thread …

John Richardson – Follow me on Twitter @Expatriationlaw

Elizabeth Warren’s “Ultra-Millionaire Tax Act of 2021”: Coming Soon To A Neighbour (and maybe a nonresident spouse) Near You

The Contextual Background – Elizabeth Warren – January 28, 2021

Excerpts from a recent CNBC interview (see the following link for context) …

https://www.cnbc.com/2021/01/28/first-on-cnbc-cnbc-transcript-senator-elizabeth-warren-d-mass-speaks-with-cnbcs-closing-bell-today.html

WARREN: Based on fact, the wealthiest in this country are paying less in taxes than everyone else. Asking them to step up and pay a little more and you’re telling me that they would forfeit their American citizenship, or they had to do that and I’m just calling her bluff on that. I’m sorry that’s not going to happen.

WARREN: Look, they want to use American workers. They want to use American highways. They want to use American police forces. They want to use American infrastructure, but they just don’t want to help pay to support it. And that’s the trick, a wealth tax needs to be national because you can still get advantages, if you move from state to state. But the idea behind wealth tax is you have to pay it if you’re an American citizen. It doesn’t matter whether you live in Texas or California or even whether you move to Europe or South America. If you want to keep your American citizenship, you pay the wealth tax and it doesn’t matter where you put your assets. You can try to hide them in the Cayman Islands, you can try to put them up in Switzerland, but it doesn’t matter, you still pay the two-cent wealth tax. And here’s the nice thing about that, you know, a lot of the wealth is quite visible and easy to see, it’s right there in the stock market. A two-cent wealth tax changes this country fundamentally because it means we say as a nation, we are going to invest in the next generation. We’re going to invest in creating opportunity not just for a handful at the top, we’re going to create opportunity for all of our kids. That’s how we build a strong future in this country.

Prologue: For Whom The Tax Tolls – What Is An “Ultra” Millionaire?

One dictionary definition of “Ultra” includes:

ultra noun [C] (PERSON)

usually disapproving

a person who has extreme political or religious opinions, or opinions that are more extreme than others in the same political party, etc.:

Soon the ultras on the right of the party will resume their criticism of the prime minister.

On August 20, 2019 Forbes reported that Elizabeth Warren had a net worth of approximately 12 million USD. A large part of these assets are her pensions. But apparently her proposed wealth tax doesn’t apply (it’s unclear to what extent it would apply to pensions) to her. At a minimum, the proposal applies ONLY to “Ultra” millionaires (at least today).

Elizabeth Warren Introduces Wealth Tax – Version 1

On or about March 1, 2021, Senator Warren introduced her proposed “ULTRA-Millionaire Tax Act Of 2021”. Given that the threshold is $50 million USD, it appears that the Senator, although a millionaire, is not an “ULTRA” millionaire. There is nothing in the proposed act that suggests the plan is indexed to inflation. Even if the threshold is NOT lowered (which it will most certainly be), the inevitability of inflation will ensure that more and more people are ensnared by it. In the same way that the late Senator Kennedy referred to the 877A Exit Tax as the billionaire’s tax (when it applied to everyday people), over time, the wealth tax will become the millionaires’ tax that will be applied to (by the standards of today) thousandaires.

Now, I don’t believe that this is going to become law soon. But, all confiscatory taxation, starts as an idea that germinates, until enough politicians (who would not personally be impacted) are used to the idea and then it will become law. Tax laws have the potential to become law through either accident (a revenue offset measure which nobody reads) or by design (stated purpose of the legislation). This is exactly what happened with the S. 877A expatriation tax (a revenue offset provision).

Part A – The Evolution of Taxation From Taxation Of Income (Sharing Of Income) To Taxation On Wealth (Taking Of Assets)

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FATCA @Citizenshiptax and Wealth taxes: Laura Snyder Engages @Gabriel_Zucman In The Twittersphere

Introduction

Citizenship-based taxation, FATCA and how the interact can best be understood by Americans abroad.

The professors (who have clearly never lived under a citizenship taxation regime and have limited understanding of FATCA) explain the relationship between U.S. citizenship-based taxation and the success of a – “Made In The USA” wealth tax – in the article which includes:

The situation in the United States is different. You can’t shirk your tax responsibilities by moving, because U.S. citizens are responsible to the Internal Revenue Service no matter where they live. The only way to escape the IRS is to renounce citizenship, an extreme move that in both Warren’s and Sanders’s plans would trigger a large exit tax of 40 percent on net worth.

Some people tweet. Some people tweet for fun. Some people tweet to educate.

The purpose this post is to collect the series of tweets that Laura Snyder complied to provide a higher level of education to the professors.

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