Senator Charles Schumer (D-NY) is a member of the Senate Finance Committee, and in fact sits on the Subcommittee on Taxation and IRS Oversight. As such, he is much more responsible than most for the economic damage being done to our economy through our counterproductive tax code.
It’s bad enough that Mr. Schumer isn’t doing anything about the high tax rates that are driving businesses and capital overseas, and that punish people and business simply for being located in the United States. But now that the chickens are coming home to roost from Mr. Schumer’s lousy tax policy, instead of dealing with the root cause, he is acting like a tyrant and attacking those who flee his oppression.
Yes, like a tyrant. What else can we call someone who is advocating capital controls reminiscent of Soviet-era exit taxes?
It was (and is) a hallmark of totalitarian states that they ban or severely restrict the ability of people trapped in their terrible systems to flee. And in cases where they might let someone leave, capital controls and exit taxes prevent them from taking their money or possessions with them. Their assets become property of the state, or more likely of corrupt state officials.
Conversely, freedom of movement of people and capital is a hallmark of free societies. This is why some of us were disturbed by some of the transaction reporting requirements in the Patriot Act. Such reporting requirements are the first step toward eventual capital controls.
Mr. Schumer is continuing down the path of capital controls by threatening to take action against American expatriates who flee the United States and who surrender their citizenship because they’ve decided that the privilege of being an American is no longer worth the costs imposed by our high tax rates and worldwide tax regime.
We as citizens should be extremey sensitive when our elected officials start to see controls on freedom of movement as a way of keeping their subjects in-line and in-house.
That’s why it was particularly disturbing to hear that House Majority Leader John Boehner has endorsed Mr. Schumer’s proposal. When Republican leadership agrees with Mr. Schumer on capital controls, that only makes the decision to flee the United States look all the more rational.