Tag Archives: Bernard Schneider

Cook v. Tait 24: The protection of political minorities in the political process


Introduction And Purpose:

This post is to “tie together” three comments/posts that discuss the problem of “political powerlessness” in the political process. This poses obvious problems in the area of “citizenship taxation”. It is important to note that what some refer to as “expatriate tax legislation” seems to always appear as a “revenue offset provision”. In other words, “Let’s put the cost on those whose votes don’t matter”. This point was made in one of the recent submissions to the Senate Finance Committee.

What should be the basis for the right to vote?

That said, maybe “Americans abroad” are lucky to be able to vote at all. There is NOTHING about citizenship per se (as the Canada experience suggests),  that guarantees a “right to vote” for those who live abroad. In fact a recent comment from  Lucy Stensland Laederich includes:

Both AARO and FAWCO have progress to their credit in terms of citizenship and election reforms – in each case, we followed the legislative path and worked with allies. It is true we do not have a history of “rocking the boat” but we do have one of sometimes major successes: when we inundated Washington with tea bags in the mid-Seventies (a campaign that started in AARO), we got the vote for overseas Americans!

The 1970s “Tea Bag” campaign is interesting. It should also give hope to those who think that change in Washington is impossible.

I strongly recommend reading the “AARO Account of how achieved in an increased capacity to vote“. It includes:

But opposition by the Justice Department continued, still led by Antonin Scalia, who had persuaded the Attorney General to oppose the President’s signature. The representative of the bipartisan committee, Gene Marans, decided to go over the head of the Justice Department. He asked Sen. Barry Goldwater to call the legal counsel of President Gerald Ford.

Senator Goldwater’s message to the White House was: “Listen you ___ fools! There are more Republicans in Paris than there are in Detroit! And Ford doesn’t want to be the first President to veto a voting rights bill since the Reconstruction.”

The bill was signed by the President on January 2, 1976. Direct political life had begun for Americans living overseas.

Note that Antonin Scalia was appointed to the Supreme Court of the United States. He continues to serve on the court today. Note that he wrote a dissenting decision in the May 18, 2015 U.S. Supreme Court decision described below. In other words, Justice Scalia appears to have opposed the rights of Americans abroad to vote, BUT upheld the right to Maryland to impose taxes on the “politically powerlessness”.

Part 1 – Discrete and Insular Minorities In The Political Process – Do Americans Abroad Have REAL Political Representation?

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Cook v. Tait 20: Bernard Schneider: “The End of Taxation Without End: A New Tax Regime for US Expatriates”

I was glad to see that Bernard Schneider’s paper was referred to at one of the Facebook groups frequented by Americans Abroad. Dr. Schneider’s was summarized as follows:

This paper was specifically mentioned by the SFC about two years ago after they received a round of submissions on tax reform (just like the current round). The SFC also mentioned an interest in Canada’s model of Residency Based Taxation.

In his paper, Schneider introduces the Cook vs. Tait (benefits justification) which is the current legal basis for CBT on page 4.

On page 6 Schneider identifies 5 types of expats (short-term, long-term, accidental, citizens by descent and unaware citizens by descent).

On page 52 Schneider begins an in depth discussion (for several pages) about the lack of “benefits” expats receive from the USG. He tears the Cook vs Tait “benefits” argument to pieces where he concludes with, “Thus only short-term expatriates and U.S. government employees and military personnel can be said to have, as a group, the nexus to the United States that justifies including them in the U.S. tax net.”

On page 73 Schneider writes, “In most cases, renunciation is driven not by a desire to escape taxation unjustly, but by the unjust imposition of taxation. U.S. taxation of long-term expatriates and accidental, nominal, and unaware citizens is unjustified; they should not have to renounce their U.S. citizenship in order to escape U.S. tax and reporting burdens….. More fundamentally, the use of citizenship as a jurisdictional basis for taxation of nonresidents is unsound because it distorts and devalues citizenship. Worldwide taxation of, and the ever-increasing compliance burden on, nonresident U.S. citizens constitute a real and increasing citizenship penalty. As the cost of U.S. citizenship rises, and the perceived benefits decrease, many are likely to see the U.S. passport as a passport of inconvenience.”

Schneider’s paper is long, but well worth the read. It provides the tools for overturning Cook vs Tait.