Misunderstanding the Ex-Patriot Act

This is my first post here and I want to give my huge thanks to Petros and all of the contributors to the Isaac Brock Society. You’re doing great work and I and many other expats appreciate it. I know some of you are already familiar with me due to reading my Overseas Exile blog and I have a confession to make: I steal stuff from you guys. You’re awesome 🙂

Please note regarding the following: I am not a lawyer and this is my interpretation of the law. I think it’s correct, but if I’m full of it, please feel free to tell me why.

By now I’m sure all regular followers of this blog are familiar with the Ex-PATRIOT Act, the full text of which may be found here. In short, it provides a 30% exit tax on some renunciants and it’s retroactive for ten years. Unfortunately, those who argue against this abomination are misunderstanding a couple of points of law. These confuse our overall arguments and I want to clear them up.

The Article I, Section 9, paragraph 3 of the US Constitution states quite clearly that “No Bill of Attainder or ex post facto Law will be passed.” This bill, while probably a Bill of Attainder, will not be ruled as such and it is not an ex post facto law.

A Bill of Attainder is a legislative act that singles out an individual or group for punishment without a trial. Some people claim that the Act is not a Bill of Attainder because it does not name a single individual. However, a Bill of Attainder, as Petros has already pointed out, can apply to an entire class of individuals. Merely declaring that expats who renounce for “substantial tax avoidance purpose” are to be exiled would not be enough to make it a Bill of Attainder if trials were held, but the Ex-PATRIOT act has the following text:

Any alien who is determined by the Secretary of the Treasury to be a specified expatriate is inadmissible.

In other words, no trial.

So why are the courts likely to argue that this isn’t a Bill of Attainder? Because US Constitutional protections only apply outside of the United States to US citizens. Thus, the argument will be made, and it will likely be upheld, that non-US citizens who are outside of the US do not enjoy Constitutional protections. Yes, you can see the absurdity of this, but that’s what I predict is going to happen.

So we might argue that the Ex-PATRIOT act is a Bill of Attainder, but we cannot argue that it’s an ex post facto law. An ex post facto law retroactively changes the rules of evidence such that you can be charged for committing a crime when it was not a crime to commit it. Since the Ex-PATRIOT act is retroactively applied for ten years, it appears that it’s definitely an ex post facto  law. However, this is not the case. Since 1798, the courts have held that ex post facto laws only apply in criminal cases, not civil. Nowhere in the Ex-PATRIOT act is the renunciant alleged to have committed a crime.

In criminal cases, a convicted defendant faces incarceration, a fine, or in extreme cases, execution. The “exit tax” will be ruled a tax, not a fine. Further, there is no threat of incarceration or execution. And since no crime is alleged, the Ex-PATRIOT act will likely fall under civil law, not criminal law. If you want to know more, you should read this fairly clear explanation of the difference between criminal and civil law.

So yes, the Ex-PATRIOT act is a flag-waving abomination and there are plenty of ways we can attack it, but from the standpoint of the courts, it’s not going to be held as a Bill of Attainder (due to a technicality) or an ex post facto law (because they don’t apply in civil cases). I know this is not information that most people want to hear, but that’s my reading of the situation.

I don’t post this to discourage you. I post this in hopes that we won’t find ourselves getting bogged down in arguments that don’t actually apply to this horrible bill. Sadly, legal and illegal are only kissing cousins with right and wrong.


19 thoughts on “Misunderstanding the Ex-Patriot Act

  1. Great to see you here! You’ve done some really great articles on your blog and I read you regularly.

    I think this abomination will indeed become law. Hell, I think lawmakers will be injuring themselves in the mad rush to pass it. I mean what’s not to love about it? It’s a guaranteed vote-getter in an election year….

  2. So we can be harried to the grave and never be able argue the illigetimacy of the one harrasing us because they get to classify their actions?
    It is pretty cowardly to hide behind your own power and escape the judgement of the community upon your actions.

  3. recalcitrantexpat: I completely agree, but that’s why included that final line. For us to argue persuasively, we’ll have to do it in ways that are likely to succeed.

    First, few can argue that the US was founded after a war where we declared a right to independence from another country and it’s hardly unAmerican to assert a desire to want to assert said right. Second, the US Expatriation act of 1868 opens with “The right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness.”

    Third, article 15 of the Universal Declaration of Human Rights (which the US ratified) states that “No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.”

    As the acronym of the title of the bill refers to “Expatriation Prevention”, I think it’s pretty clear that this law flies in face of both US tradition and US law. People might not like that others desire another citizenship, but punishing them for seeking that out is terribly unamerican.

  4. Thanks for this provocative post. I maintain nevertheless that my original arguments are valid, despite the sophistry that will thwart them.

    I don’t have the money or the energy to challenge Ex-Patriot Act in any case. The purpose of my arguments was not to make a legal case, and anyone who thinks that’s what I am doing has missed the point. I am a theologian not lawyer. I was making an historical and moral argument. I judge the United States on the basis of its failure to live up to own ideals, and upon its ill treatment of its citizens.

    But to the question of whether Constitutional rights apply to the expatriate, I think you (or rather our shadow opponents) are looking at this entirely in the wrong manner. The reason is that this abuse only applies to a person who at one time had Constitutional rights, because of their status as a citizen, and the law, i.e., Congress, judges them based upon that former status.

    Let me give another example to show the absurdity of the argument that the former citizen has no constitutional rights: I will not do FBAR on my Fifth Amendment rights. Could the US claim that I failed to file FBAR and charge me with a crime of undeclared bank accounts? Apparently, yes; as long as the statute of limitations of six years has not expired. But could they then turn around and say I have no Fifth Amendment rights because I am no longer a citizen? No, because they are asking for paperwork based upon my previous status as a former American citizen.

    Likewise, the Ex Patriot Act judges the former citizen not upon his current status as a citizen of another nation, but upon the status and level of wealth that he had while he was an American citizen, for an act of renunciation that took place while he was yet a citizen. His banishment based upon his expatriation for tax purposes would have no validity otherwise. So the covered expatriate is then banned for life from the United States on the basis of a status that existed while the person was still a United States citizen. Therefore, Congress should not be allowed to violate his right that he exercised as a US citizen to expatriate. You see what I’m getting at? If the person had never been a citizen, then the question of the bill of attainder would never come up. But because the person who is the target of the bill of attainder is being judge because of the status he had when he was a United States citizen, his rights as a United States citizen must nevertheless protect him from arbitrary and capricious treatment.

    Finally, don’t forget the Expatriation Act of 1868. It lays out the fundamental principle of the United States government is to recognize the right of a person to expatriate. To treat a former citizen of the United States in manner different then other citizens of the persons new country is a violation of that Act.

  5. I should mention also that I write in order to fulfill our our responsibility at Isaac Brock to be educational. We must teach people who have forgotten about the rich tradition of human rights that is our heritage, and to persuade people to do the right thing. Whether my arguments will stand the scrutiny of the courts is to me almost irrelevant. The courts are hardly less wicked in my eyes than the President and Congress.

    Take for example ex post facto. Even if a government can get away with ex post facto civil laws, it doesn’t make it right. We must try to persuade people that the lawsapplied retroactively to detriment of its citizens are just simply wrong. Common sense dictates that in any case.

    I urge folks to consider the manner in which Jesus challenged the lawyers of his day. He tried to hearken them back not to the letter of the law but to its spirit. I.e., what are the deep underlying principles of the law; he rejected the understanding of the lawyers, who placed burdens on the people’s backs. Law must not become part of the problem and used to destroy people. Law should instead foster a cohesive and well-functioning community.

  6. Petros: I completely agree with you. I realize, belatedly, that my first post to this blog should probably not have been “throwing down a gauntlet”, so to speak. I do appreciate and completely support everything you’re doing.

    I had mentioned the Expatriate Act of 1868 in one of the comment above. It should make it clear to Americans that there is nothing un-American about seeking new shores. Sadly, no one cares 😦

  7. @overseas, I don’t mind that you throw down the gauntlet. That’s a perfect way to start here. Iron sharpens iron. Yes, I saw your citation of the 1868 Expatriation Act, only after I had already posted my comment.

  8. “There is no crueler tyranny than that which is perpetuated under the shield of law and in the name of justice.”

    – Charles de Montesquieu

  9. Hello, Curtis. Welcome to the seventh circle of hell. A couple of notes.

    I think you know this, but your post confuses — there is already a 30% exit tax, courtesy of HEART in 2008. Ex-PATRIOT adds a further 30% to be paid on any post-exit gains in a US stock. (Selling at a loss relative to your exit tax valuation? Can you recover the “over-paid” exit tax? Of course not!)

    There is a legal paper in SSRN that argues that HEART is unconstitutional. I don’t know if its arguments could also apply to Ex-PATRIOT. In any case, HEART has never been formally challenged and congress treats the constitution as a doormat these days.

    If someone owes tax under Ex-PATRIOT and refuses to pay, that may become criminal. Would this make it ex post facto?

    Ex-PATRIOT completely tramples many US tax treaties. Non-discrimination clauses in particular. Maybe some scope for attack there?

    One final observation. Since the mid-90’s expat tax law has worsened dramatically in most election years. HIPAA 1996, a strange off year in 2000, then AJCA 2004, HEART 2008, and the “mezzanine” FATCA 2010 (making up for the missed worsening in 2000, maybe?). 2012 is an election year. Ex-PATRIOT comes as no surprise, then. If not Saverin then something else would have been the trigger.

  10. @Cato: Where have you and your quotes been? It seems forever since we heard from you. I was just thinking about you a few days ago.

    @Exile: Welcome. The more I learn, the more confused I become.

  11. @Overseas Exile, Great to see you posting on Brock!

    Re “I don’t post this to discourage you.” Absolutely not! It’s important to know how a law is, or is likely to be, applied. So, it’s quite interesting and informative to have your analysis on how the US courts are likely to interpret this proposed piece of legislation.

    This bill seems really bizarre (to put it mildly); and as I have no knowledge of US law, I was curious about how it would fit into the US legal system. A very interesting post.

  12. Hi Blaze!

    Been busy, but still lurking about. I see we’ve got a couple of Senators helping Americans abroad decide about expatriation.

    “If you want a vision of the future [for expats], imagine a boot stamping on a human face — forever.”

    – George Orwell

  13. @Watcher, I had also noticed the trend of changes in US tax law for expatriates every four years, coinciding with presidential elections. But look at the bright side: after the Ex-Patriot Act, no changes until 2016! 🙂

  14. @CATO: “I think there is a Trojan horse lurking in the weeds trying to pull a fast one on the American people.”
    George W Bush, mixing his metaphors in a radio phone in show during 1998 campaign.

    Shumler, Casey and others are trying to pull a fast one on the American people today.

    I hope you will not just lurk, but actively join us again. Good to have you back.

  15. @Overseas Exile

    Have a few minutes tonight to try and read blog comments. I have enjoyed this debate, and thanks for adding it. May I offer a strategic suggestion on how we can leverage this type of discussion which I think is very important..

    Are either of you familiar with Glen Greenwald who blogs at Salon.com ?

    He is a Constitutional Lawyer, and while considered progressive, is quite critical of Obama Administration in many areas. He has a book that is right up our ally, called With Liberty and Justice for Some.

    This proposed Ex-Patriot legislation seems like it is one that should resonant with him. I tweet him from time to time to try and get his interest in Citizenship taxation issues, and just sent him another tonight about the Constitutional aspects of the Ex-Patriot bill. I would encourage you, and any Isaac Brock reader to consider reaching out to him to weigh in on this subject. If he would ever do a blog on this very subject, it put the issue in front of a lot more progressive eyes including those in the media that follow him!

  16. @overseasexile – have enjoyed your site and glad to see you here. This post is excellent and thought-provoking. I think some of us are not as oriented toward the legal/constitutional implications of all that is happening which is why we need Petros, you, etc. Please post more!

  17. @Cato, Missed your wonderful citations! Here’s one to welcome you back (and because I do think this damn bill will pass to wide acclaim)
    “The best argument against democracy is a five-minute conversation with the average voter.”
    Winston Churchill

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