Expatriation & Crito

Biometric United States passport issued in 2007

(Photo credit: Wikipedia)

An American citizen can voluntarily renounce his citizenship and a permanent resident can “turn in” her green card—this is known as expatriation. Interestingly, there has been a 33% increase in expatriations since 2011 with a total of 2,369 people doing so as of the third quarter. The main reason for this seems to be for the wealthy to avoid paying American taxes.  This does raise an interesting moral issue.

In the case of permanent residents who turn in their green cards, this would seem to clearly be morally acceptable. After all, being a permanent resident and not a citizen is most likely a matter of convenience or advantage for the person in question. As such, they would seem to have no special moral obligation to the United States. To use an analogy, if I rent a house from a family, this creates no special obligation to that family beyond paying my rent and taking reasonable care of their property. If I wish to end my tenancy and move somewhere else, then that would be my right—provided that I settled my debt before leaving.

The case of citizens is a bit more complicated. On the one hand, it can be argued that a person has a moral right to give up his citizenship for any reason. This would seem to apply whether the person received his citizenship by being born a citizen or by being nationalized. A person who was born a citizen did not chose to be a citizen and thus would seem to have the right to make that choice as an adult. To use an analogy, a person does not pick his birth family, but he can later elect to not be a part of that family.

A person who decided to be a citizen and then elects to cease to be a citizen would seem to have as much right to make that choice as she did when she decided to become a citizen. To use an analogy, just as a person has a right to enter into a marriage she has a right to leave that marriage.

Another avenue of argumentation is to focus on the right of a person to act in ways that are to her advantage. In the case of the wealthy renouncing their citizenship for tax purposes, it can be contended that they have the right to act in their self-interest and avoiding taxes in this manner is a rational calculation. While they do give up the advantages of being a United States citizen, the tax savings could be well worth it—especially if the wealthy person has little need of the advantages of being a United States citizen or can get comparable advantages by being a citizen of a state that will not tax her to the degree that the United States does. Of course, it is worth noting that the wealthy generally do not suffer under severe tax burdens in the United States and they are generally adept at using the arcane tax laws to their advantage. However, a wealthy person might regard even these taxes as too burdensome relative to the advantages she gains from her citizenship.

On the other hand, renouncing citizenship for the tax advantages seems, at least to me, like an act that is morally dubious. Laying aside the appeals to patriotism and the condemnation of selfishness, I will instead borrow and rework Socrates’ approach in the Crito.

The Crito takes place after Socrates trial (as recounted in the Apology) and involves Socrates addressing the question of whether or not fleeing Athens to avoid death would be unjust. While the matter at hand is not about death, it is a similar matter: would a citizen renouncing his citizenship to avoid taxes be unjust? I believe that it would be and offer the following argument (stolen from Socrates).

For the sake of the argument, I will assume that the citizen was not compelled to be or remain a citizen and that the citizen was not tricked into being or remaining a citizen. That is, the citizen was not trapped by fraud or force. A person who is forced or tricked would have a legitimate claim to renouncing such a compulsive or fraudulent relationship.

A person who was born a citizen or became a citizen enjoyed the advantages of being a citizen. The person very likely was educated by the country (by the public school system). Even if the person did not receive a public education, she did receive the protection and goods of citizenship. If the person is renouncing her citizenship solely for tax reasons, this would indicate that she does not have a profound disagreement with American values or the other aspects of citizenship. As such, the person would be renouncing her citizenship solely for the financial advantage. This would seem to be unjust—to repay the country by renouncing her for the sake of money. To use an analogy, this would similar to a person renouncing membership in the family that raised and took care of her because now her parents are old and require the support they once gave their child. This would seem to be an act of profound ingratitude and shameful in its base selfishness.

The obvious counter to this is to contend that the relationship between the citizen and the state is not analogous to that of a family or even a community. Rather the relationship is one defined purely in terms of self-interest and assessed in terms of the advantages and disadvantages to the individual. On this view, a person would ask not what he can do for his country. Rather, his question would be to ask what his country can do for him. And if it is not doing enough, then he should end that relationship.

Taking this view does come with a price: it must be applied consistently to all relationships to the state. For example, a citizen who sells secrets to another country or merely leaks them because he sees it as being to his advantage cannot be accused of a betrayal. After all, he is doing what the wealthy renouncers are doing: acting for his own advantage. As another example, to expect citizens to make sacrifices by serving the country would be an unreasonable expectation. Citizens should only do what is to their advantage and be properly compensated for this. In short, this view is that the relationship between citizen and country is a business one and that a citizen is essentially a customer. Interestingly enough, some people want to have it both ways: using the idea of nationalism when it is to their advantage and treating citizenship as a business relationship when doing so is to their advantage.

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  1. What about a company that moves its’ operations to a state or city because that state or city offered tax advantages, discounted land, or other inducements to do so? What about states or cities that make such offers?

  2. The right of a citizen to renounce his/her citizenship is inherent in the citizenship (law) itself. If US law did not allow the renunciation of citizenship, then her citizens couldn’t renounce it.

    Thus, as is the case with so many legal rights, it is simply down to the arbitrary decision of the legislature.

    Case in point: other countries do NOT allow their citizens to renounce their citizenship (e.g. Iran).

  3. s. amos wallerstein

    Socrates submits himself to the laws of Athens rather than fleeing to another country.

    A U.S. citizen who renounces their citizenship also submits themself to U.S. law, insofar as they follow all the necessary legal procedures.

    It would be very different for a U.S. citizen to refuse to pay U.S. income taxes and then go to a country with which the U.S. has no extradiction treaty in order to avoid taxes all together.

  4. Andreas Moser,

    True-US citizens do have the legal right to renounce their citizenship. But, I address the morality of this rather than the legality (which, as you said, is a settled matter).

  5. Francis DiBona,

    As your question suggests, this is analogous in some ways to citizenship. On the one hand, it could be argued that companies should simply do what is in their advantage and not enter into considerations beyond legality and economics. On the other hand, it could be argued that companies (or rather the people that make them up) do have obligations similar to those of a citizen.

  6. Mike LaBossiere,

    “True-US citizens do have the legal right to renounce their citizenship. But, I address the morality of this rather than the legality (which, as you said, is a settled matter).”

    The practical issue of US citizens renouncing their citizenship isn’t as straightforward as the tales Forbes like to tell, of the rich scurrying away from their tax liabilities. Something peculiar to the United States, is they tax their citizens living and earning abroad. There are many people who are US citizens but who have never lived in the US for any appreciable amount of time, or often; never. Although there is an income tax threshold, they can get hit suddenly with a bill. But there are other reasons. Some countries allow dual citizenship, and some don’t – it’s even illegal to have two or more passports. I don’t have chapter and verse on this, but surrendering US citizenship for the purpose of tax evasion is illegal. And though there are a handful of examples where this seems to be the case, the IRS can come after these people.

    Tax fiddles aside, there is a more complicated issue here. What obligations and responsibilities does a citizen have to a country, and the country to its’ citizens.

    Yes, it can be argued that if someone has benefitted by their citizenship of a country, they may have an obligation, but what if they have not. And to who are they beholden to.

  7. Raymond Reddington

    Ah yes, loyalty. Where art thou, dear loyalty? You have been banished from sports, form the workplace, from commerce, from marriage, from family, from community, from– well gosh, from everywhere!

    We used to have this thing called “the pledge of allegiance” …

    By and large, people, even those who trumpet their altruist accomplishments, especially those people, are self interested. They are mostly hedonists who practice materialism and minimalism and look out for self above all else. They aren’t loyal because loyalty requires true sacrifice, and sacrifice is not a chapter in their bibles, such as the 48 Laws of Power.

    I hope you, Mr There is No God, are not looking down on those profiteering opportunists. They are following the laws. Hence they must be acting morally, because after all, in the absence of God, MAN is the author, judge and jury of what is right and wrong, so therefore all the laws he makes must be right, because there is no higher authority to deem them wrong!

    Go unchecked elitist capitalism! It is totally legal so it must be good. Right? Right?

  8. First of all, I assume that in order to renounce U.S. citizenship, one has to pay all back taxes and other debts with the U.S. government.

    However, there is another problem. Let’s say that I live a number of years in the U.S. or any other relatively well-governed, relatively liberal nation as a legal immigrant.

    Legal immigrants enjoy most of the rights and benefits of citizens (except voting), including sending their children to public schools, police protection, right to due process, use of public highways, etc.

    Wouldn’t a legal immigrant then have to have the same loyalty as a citizen towards the U.S. or any other relatively well-governed, relatively liberal nation?

    If so, then the legal immigrant could not morally renounce their legal immigrant status and return to their country of origin, which seems a bit much to me.

    In addition, if the legal immigrant comes from
    a relatively well-ordered, relatively liberal nation, say, Uruguay, (rather than from a failed state or a tyranny), they could not rightfully renounce their citizen in their country of origin and become a U.S. citizen, since they would owe loyalty to their country of origin as a relatively well-ordered, relatively liberal state, which again seems a bit much to me.

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