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To Dream, The Un-American Dream

May
30
2007

When Congress returns from its Memorial Day break, it will pick up where it left off debating immigration reform and a series of amendments. But the core of the immigration debate carries an unanswered question: why would any immigrants in pursuit of the “American Dream,” want to come to America in the first place?

First off, let me say that this is no anti-American screed. I love the USA. It’s a beautiful place of natural wonders, unless you are in New Jersey. It’s a place that cherishes freedom and liberty for all, unless you’re born a certain way. It’s a place where anyone can become President – especially if you’re related to one. And America is a place where any ambitious individual can make a living.

But the “American Dream” is to do more than make a living. The American Dream is to accumulate wealth, to live fabulously and to establish a legacy one can pass on when one’s time comes. Too bad the American government – and its tax policies – gets in the way of the American Dream.

Once you start making more than a living, it’s easy to turn sour on America and its paradoxical freedoms. The United States is one of two countries – the other being the Philippines – that has decided that once you are a citizen or possess a Green Card, your earnings are subject to taxation by the Internal Revenue Service, regardless of where you find yourself on the planet. That’s just not fair!

See just like you cannot choose to be born heterosexual or otherwise, you cannot choose to be born an American citizen. And once you get that cherished label of freedom, you must pay for it! Which makes me wonder what the clamor for all these people to come to the States is about.

If America’s newest immigrants were truly smart and ambitious Then wouldn’t they choose to emigrate to a country that’s not going to stick their hands in their pocketbooks for the rest of their lives? Why not go to, say, Switzerland instead of South Central Los Angeles? Switzerland has no capital gains taxes on equities, no gift taxes – for giver or recipient – and no estate taxes for direct descendants. For some wishing to domicile in the country, they can even negotiate a lump-sum payment of up to 5 times the cost of their rent or mortgage and be done with taxes altogether.

Because such policies are attractive to the ultra-wealthy, they have led to a sort of accountancy warfare across Europe as different countries battle over who can offer the most favorable tax policies. Unfortunately, if you were born an American or chose to be one – and we granted the privilege – you can’t qualify. Even if you repatriated your entire family to the Alpine chalet you visited in Christmas 1991, the long arm of the IRS could come and get you. Regardless of what the tax law is where an American is living, you see, he or she must pay taxes as if they were in the U.S.A. Whether a family patriarch died in 2011 – when the estate tax will be 0% or the following year when Nancy Pelosi proposes raising it to over 50% – would still matter because of the long arm of the American law.

That’s not fair! And if I were an emigrant looking for somewhere to go earn a living, I’d think twice about swearing allegiance to a government who would want to take a slice of whatever I send home to my family.

The only real way to avoid paying the IRS if you are an American citizen, then, would be to renounce your American citizenship – something I would not recommend for a number of reasons. And just like you cannot choose to change your sexual orientation, you cannot choose to become an ex-American solely for tax purposes. Our government does not recognize renunciations of citizenship if they are believed to be for tax purposes.

So I must ask: Why do we assume that everyone across the globe is lining up at the Rio Grande waiting for the Senate to pass a cloture motion and go into Conference with the House so they can get their “Z-Visa.” It’s such a deal! Pay Uncle Sam $5,000 for the right to pay taxes on every red cent you earn for the rest of your life!

If today’s emigrants were smartly pursuing the American Dream, they’d be looking towards the Old Continent or Asia where they will have as much or more opportunity as in the States while avoiding the long arm of the IRS. What vision of the American Dream do today’s immigrants subscribe to if they’re not aspiring to the Lifestyles of the Rich and Famous? Obviously not the one you and I were growing up believing in. Because if they bought into the American Dream most of us know, they’d never want to come to the U.S. of A.

Share  Posted by Scott Olin Schmidt at 2:36 PM | Permalink

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