More American Expatriates Give Up Citizenship

By BRIAN KNOWLTON of the New York Times

WASHINGTON — Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.

“What we have seen is a substantial change in mentality among the overseas community in the past two years,” said Jackie Bugnion, director of American Citizens Abroad, an advocacy group based in Geneva. “Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”

The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.

Still, 502 was the largest quarterly figure in years, more than twice the total for all of 2008, and it looms larger, given how agonizing the decision can be. There were 235 renunciations in 2008 and 743 last year. Waiting periods to meet with consular officers to formalize renunciations have grown.

Anecdotally, frustrations over tax and banking questions, not political considerations, appear to be the main drivers of the surge. Expat advocates say that as it becomes more difficult for Americans to live and work abroad, it will become harder for American companies to compete.

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Obamacare is a Devastating Tax on the Poor and Uninsured

Mises Daily: Thursday, November 12, 2009 by Eric M. Staib

Given the recent announcement that the government’s measure of unemployment has hit 10.2 percent, and given that the official House version of Obama’s healthcare plan, HR 3962, has now passed, a close examination of the effects of “Obamacare” on the labor market is important. It will be no surprise to readers of this site to learn that the Democrats’ bill will seriously harm precisely those poor and uninsured citizens it is ostensibly designed to help. The harm will come by compounding mass unemployment and depriving these citizens of consumption choices.

Obamacare as Labor Tax

According to pages 269–273 of the gargantuan bill,Download PDF employers of full-time workers will be required to cover at least 72.5 percent of the premium of the least expensive health-insurance plan available that fulfills the bill’s minimum criteria of “acceptable coverage.” In cases in which family coverage is provided, 62.5 percent of the premium is to be borne by the employer. Depending on the specific plan and other variables such as location, this amounts to a direct labor tax of approximately $300 per month for an individual, or nearly $700 for family coverage.

The implication of this increased cost is that workers whose revenue productivity is less than $300 per month higher than their wages will be laid off, or have their hours cut to the level that will classify them as part-time. Ignoring established labor law, the bill leaves the definition of part-time and full-time to the discretion of the Commissioner of Obama’s massive new health bureaucracy. The lower the new “Health Choices Commissioner” sets the threshold in an attempt to maximize the number of people receiving the employer contribution, the more hours of production employers will have to shave off to push their employees under the threshold, and the less those workers will take home in wages each week.

Unfortunately, the bill also requires employers to cover a (smaller) percentage of the premium of the same minimum plan for part-time workers. The effects here are even worse than above, because they weaken the ability of an employer to escape the labor tax by employing his workers for fewer hours. Instead, with a labor tax on part-time workers as well, some low-productivity workers who are currently only working a few hours per week will be forced out of work entirely.

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Obama and the Continuing War on the Poor

by Paul A. Cleveland on Mises Daily

A mentor of mine, Clarence Carson, published a book in the 1970s entitled The War on the Poor. He took his title from Lyndon Johnson’s so-called “war on poverty.” Carson noted that actual wars are waged against real people rather than circumstances, and that if the government were engaged in a war it must be against some identifiable group of people. In his book, he identified the poor as that group by analyzing the economic impact of the various policies that Johnson pursued. In each new initiative of the Great Society, the effect of those policies was to raise prices on various products and cause the poor in America to suffer for the sake of a few special interests.

Nothing much has changed in America. The only difference between then and now is the degree to which property is being attacked. Indeed, the entire political process seems to center around such attacks in the name of alleviating our misery, which more often than not is caused by some past program. Despite the misery that past policies have inflicted on us, during each election cycle our politicians travel the country telling us how their proposals will fix all that ails us. If they are incumbents, they argue that their policies will work if given sufficient time. Moreover, they tell us that they have been hindered in the performance of their promised feats because of their political opponents. Alternatively, challengers argue that only their proposed interventions will work to produce the desired economic prosperity. And so it goes, as each pursues the needed votes to ensure election.

Fortunately for our aspiring magicians, the media takes the process very seriously and devotes a great deal of time to covering the debate — without asking any serious questions as to whether intervention of any sort is a prudent course of action. The media thus gives a credibility to the process that would not exist without their endorsement. After all, if the media believes that the government is really able to produce something from nothing, then uncritical men and women in the street may have reason to believe it as well. To date this seems to be the case, since the failures of past policies are generally not pointed to as a reason for doubting current political promises.

There is, of course, one issue that our political aspirants never wish to discuss at any length. They never wish to discuss the costs of their proposal. If they are forced to discuss this topic at all, they simply argue that the many benefits of their scheme will vastly outweigh the upfront costs. Moreover, they invariably promote a plan to impose the costs upon the so-called rich people because they can afford it. Since no one knows any of these very rich people, many feel secure that the politician’s plan will ultimately prove beneficial to them.

The magician lives by his deception. If the audience is ever able to see the reality of what the political class is actually doing, then these magicians would have to practice their magic craft privately. But this kind of fraud exposes them to the danger of spending time in prison (as Bernie Madoff can attest to). If they were not willing to risk jail time, the political class would instead have to work for a living. No longer would it be possible for them to live off of the fruits of other peoples’ labor. They are indeed glad that the citizens of the land seem content for the most part to remain blind to the impoverishment they have perpetrated.

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