David Lesperance responds to U.S. Sen. Elizabeth Warren’s latest pronouncements about her proposed wealth tax. In an email Friday, he explained:
Recently, Senator Warren has been using her new appointment to the US Senate Finance, as a platform to again push a Wealth Tax. Unfortunately, she is ignoring the reality that for every action, there is an equal and opposite reaction…namely that Wealthy Americans are leaving the US tax system in record numbers.
He shared a news release with more details.
Earlier this week the US government issued its latest Quarterly “Publication of Individuals, Who Have Chosen to Expatriate” which lists just under 700 names. In order to understand if this number supports or disproves Senators Warren and Sanders believe, one must understand some key elements on what this list represents and how it is compiled:
1) The List does NOT contain a list of every US citizen who has renounced US citizenship;
2) The List DOES contain a list of US citizens who have renounced US citizenship and long-
term US resident aliens who have relinquished their Green Cards AND who have either a
minimum net worth of US$2M or a five-year average of US tax paid greater than US$171K;
3) Once the $2M is reached, there is no indication whether the person had a net worth of $2.1M, $200 million or $2 billion;
4) The List reflects renunciations and relinquishments that occurred 18 to 12 months
previously due to the time required by the government to process the event and subsequent tax reporting deadlines for net worth or tax payments.
So, in rebuttal to Senator Warren and her academic fellow travelers I would point to the RECORD NUMBERS of wealthy Americans who are renouncing their US citizenship or giving up their green cards. Their motivations are usually not the result of a single tax proposal but the cumulative impact of local, state, and federal Tax the Rich policies.
In particular, I would notice that today’s listed departures occurred in mid to late 2019. This was exactly at the time that Senators Warren and Sanders were at their peak of pushing their Wealth Tax proposals during the democratic primaries.