In 1851, American physician Samuel Cartwright dreamt up a racist bit of psychology to explain why black slaves were fleeing the plantation. Drapetomania, as he called it, was supposedly a mental illness in slaves that made them want to escape. It goes to show people can come up with any excuse to defend their own ridiculous behavior.

You could say the same thing about citizenship renunciants in The Land of the Free. As July 4th approaches and Americans get ready to over-eat and shoot off fireworks to celebrate the genetic miracle of their birth between two stripes in the sand, many would call renouncing American citizenship modern-day drapetomania.

Warren Buffett has said that his success in life came from his birth in the United States at the right time. And when we were born, that was likely the case. However, in the Top Places to Be Born survey for 2013, the US is tied for 16th place, barely putting it ahead of such places as Kuwait and United Arab Emirates.

Years ago, no one dreamed of giving up US citizenship. Few ever considered that the notion of citizenship is just a modern-day slave card.

As US tax policy get more and more draconian, a few wealthy people stepped up to the plate to renounce their citizenship. John Dorrance III, heir to the Campbell Soup fortune, obtained a (since discontinued) economic citizenship in Ireland and expatriated. His move was presumed to save him millions in capital gains taxes when he sold his stock not longer after.

John Templeton, investor and mutual fund pioneer, torched his US passport in 1964 to become a citizen of the Bahamas. The renunciation saved him $100 million in investment taxes which he added to his huge charity pot.

John Templeton citizenship renunciation

What a jerk: Fund manager John Templeton renounced his US citizenship in 1964 and donated his $100 million tax savings to charity.

These days, however, the US government isn’t taking cases like these lying down. You remember the brou ha ha that came about in Congress when Facebook co-founder Eduardo Saverin, scammer he is, handed back his US citizenship before the company’s monster IPO. Despite still having to back a wheelbarrow of cash up to the IRS loading dock, he will roundly vilified by do-nothing Senators like Chuck Schumer who demanded that guys like Saverin – who wasn’t born in the United States to begin with – never be allowed to return.

It’s babble like this that shows no matter how much you give the government, they’ll always demand more. The US is basically the only country on earth that enforces a policy to collect taxes from non-resident citizens. Live in Hong Kong for as long as you want, but you’re still paying your full share and “fair share” to Uncle Sam for the privilege of not driving on American roads or being protected from evil terrorists bombing your suburb.

Unaccountable governments and petty functionaries like Schumer will never have enough of your money to waste, so they have to stomp their feet like little girls anytime one of their milk cows leaves their field for greener pastures.

Case in point: five years account, the government rolled out new rules for “covered expatriates”. If you paid more than $155,000 in federal income tax (adjusted for inflation), or have a net worth of at least $2 million, you could be on the hook for quite awhile. That’s because the US government has mind-reading powers that tell them anyone with money MUST be renouncing their citizenship to save money. It couldn’t possibly be the arrogant government, the murderous wars, the mountain of debt that will crush their children, or the culture of Kardashians-watching drones that support whatever new socialist program the likes of Schumer can dream up.

Nope. No government anywhere ever said “it’s not you, it’s me”.

The law covering covered expatriates has gotten more draconian over time. After making the assumption that wealthy renunciants were nothing more than tax evaders, Congress revised the law again to apply the “death tax” to such renunciants. When you give up your citizenship, you’re literally dead to them.

Cue up Kevin O’Leary on Shark Tank.

Politicians love using the word “dead” when someone steps on their racket. Chuck Schumer said Saverin’s madness must be “stopped dead in its tracks”. He called the billionaire’s citizenship renunciation “a great American success story gone horribly wrong,” adding that he “turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire.”

Last I checked, these bozos have done nothing but make legal immigration harder. Nor did they pay for Saverin’s Harvard education, nor are they responsible for his business genius. There’s no magic pixie dust they sprinkle over Americans to make them more productive than they would be if they lived in another country. Oh, and Saverin was born in Brazil.

Like the 1850s slaves deemed “mentally ill” by some quack merely because they sought freedom, the highly enlightened culture of the United States has deemed that anyone who wishes to move to another plantation is dead to them. Better that than be forced to acknowledge that the free market system works for governments, too.

In this instance, you’ll be left with one huge tax bill as a thanks for accumulating assets over a lifetime in the US. Your home, car, business, stocks, and anything else are all fair game for the tax man, knowing that once a slave leaves, his value to the plantation is zero. Might as well rob him on the way out.

Nobody would think it would be fair to punish you for eating at Burger King because you used to eat at McDonald’s. No matter how many times you eat a Big Mac, you always have the right to go down the street and buy a Whopper. McDonald’s employees don’t stand out the Burger King entrance taunting or calling you a traitor when you do. Nor do they they threaten you with demands to only eat at their restaurant each time you leave. You’re free to eat where you want and to demand the best food and the best service.

Yet those of us who “won” a genetic lottery by evacuating a birth canal on the soil claimed by something called the United States government are made to suffer if we want to escape. We can’t use some form of underground railroad because said government has its tentacles everywhere and will try to bully our new country into submission. So anyone who heads for the exit has to pay the giant tollbooth on their way out.

Then, the government pronounces them dead.

Just to show how little the government cares for its ex-slaves, Congress wants to make its new laws retroactive ten years. That means if you renounced your citizenship in the last decade, they can bar you from re-entry, too. After all, you’re dead to them. They don’t care if you played by one system of rules. Why would the most arrogant government in human history care about something as silly as its own rules all of a few years ago?

The day McDonald’s punishes its customers for sneaking a bite at Burger King is the day you know McDonald’s is in getting desperate. Likewise, the day politicians use words like “madness” – the same word used to brand refugee slaves mentally ill – against ex-tax slaves is the day you know the country has become desperate.

Calling people dead is what desperate people – and governments – do.

Andrew Henderson

Andrew Henderson

Andrew Henderson is the world's most sought-after consultant on legal offshore tax reduction, investment immigration, and global citizenship. He works exclusively with six- and seven-figure entrepreneurs and investors who want to "go where they're treated best". He has been researching and actually doing this stuff personally since 2007.
Andrew Henderson
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