Calling Facebook co-founder Eduardo Saverin’s renunciation of American citizenship an “outrage,” that allows him to “duck up to $67 million in taxes,” Senator Charles Schumer wants to create a special tax on Americans who renounce their citizenship. One can understand his frustration–America welcomed Saverin’s family when they needed a place of refuge, and now he is turning his back on us, for no other reason, it seems, than to reduce his tax bill. Perhaps no one at Harvard taught him that patriotism is a virtue.
Yet Schumer’s attack is fundamentally misguided, and reveals a disturbing attitude toward private property. Should it impose such a tax, the American government would be saying that property is no longer truly private. It would be saying that the American government has a presumptive claim on any and all property “owned” by an American citizen.
That is a far cry from the ideas that made America great. Consider the American revolution. In January, 1777, when times were grim, and the fate of the Union rested on his shoulders, General Washington issued his “Proclamation Concerning Loyalists.” Washington lamented that there might be some who “prefer the interest and protection of Great-Britain to the freedom and happiness of their country.” Leading a revolution built upon the presumptive right of men to choose not to belong to the King, he realized that the same principle applied to those who continued to choose British subjecthood over American citizenship. Hence he declared that such people had “full liberty . . . to withdraw themselves and families within the enemy’s lines.”
General Washington did not demand that such enemies of their native country, as he thought them, should pay an exit tax. The Americans were fighting to protect their property from arbitrary taxation. Loyalists were free to choose loyalty, and they were free to take their personal property with them. If there was, on principle, no exit tax demanded in the darkest days of the American revolution, it is hard to see how one could be justified now.
There is a deeper lesson here. General Washington presumed that people owned their property free and clear. Coins, bonds, and certificates were personal possessions, no less than one’s coat, or one’s skills and talents. In other words, private property was understood to be part of a more general realm of privacy–that people owned free and clear, and which government had no right to tax without consent. Washington understood the right to leave to be fundamental. In a democratic republic, the side that loses a vote is must submit peacefully. Hence the right to leave, the only way to both refuse to submit to the majority, and not make war on them, was an essential means to protect minority rights.
By contrast, Senator Schumer seems to think that personal property belongs, in part, to the government. He allows that a citizen may renounce his citizenship, but he may not take his property with him, until after he has reached a settlement with the American government. Senator Schumer is hinting at returning to an older idea of property–one that, of old, had more to do with real than personal property. In England at the time of the American revolution many people did not actually own the land on which they lived. On the contrary, they owned the right to use the land. But the King, or perhaps a Lord (or perhaps some combination thereof) held the actual title. Often residents had to pay a regular fee to the owner of the underlying deed.
Senator Schumer, like the Lords of old, seems to think that we Americans have only a usufruct to our personal property, and we may only leave the country after the King extracts his ransom. Washington’s approach to the problem of loyalists was more principled, and more gregarious than Schumer’s mean-spirted and petty approach. If Senator Schumer is worried about Americans renouncing their citizenship, then perhaps he should think harder about why people are doing so, and see what he might be able to do, as a Senator, to help ensure that the United States remains a place where bright young entrepreneurs like Saverin wish to live, and where our schools teach that patriotism is a virtue.