In a classic example of “be careful what you wish for,” the fictional Lt. Philip Nolan uttered these famous words during his treason trial as Aaron Burr’s accomplice, in Edward Everett Hale’s 1863 propaganda short story – “The Man Without A Country” (See Video Clip Below). As the narrative progresses, and Lt. Nolan is quite literally adrift on an ocean of uncertainty, he comes to realize the full implications of his bravado. While aboard the USS Levant, he dies alone in a tiny shrine dedicated to his faded memories of the United States.
Whether he knew it or not, Lt. Nolan fit the dictionary definition of “diaspora,” which is a people who have been scattered to multiple countries, but share a common longing for their homeland and an overwhelming urge to return. Jewish people are a classic example, having been expelled from their country by the Babylonians in 586 B.C. and only re-emerging as a permanent independent nation in 1948, in the wake of the Holocaust. Most anyone would agree that 2,500 years is an awfully long time to live in one place and wish to be somewhere else.
Today, the American expat community makes up one of the largest diasporas in the world. These individuals are in a unique position to serve as positive exporters of American culture and values. Does the government embrace these people or push them away, and how does that affect those of us who remain Stateside?
Myth and Fact
According to an extensive article from Dr. Amanda Klekowski von Koppenfels, expat communities basically fall into one of three categories:
• Denouncing: The mother country essentially considers expats to be traitors in the mold of Lt. Nolan. Though things have changed, Mexico was once particularly notorious for having this attitude about its emigrants.
• Transitional: Expats are essentially like the distant relatives who never show up for family events but occasionally send those generic “what-happened-to-us-this-year” Christmas letters. The mother country is neither hot nor cold.
• Strategic: These mother countries actively engage their expats, offering services like voting rights and dual citizenship.
With some exceptions, the United States is clearly in the “denouncing” category. This may be because American policy, and American public opinion, is based largely on myth.
Myth: Most American expats left the country on a purely voluntary basis, most likely because the Supreme Court legalized gay marriage or George W. Bush was re-elected. Fact: Nearly 60 percent of expats moved offshore either due to a job change or to be with a partner; in both instances, the move had at least some element of involuntariness.
Myth: Expats are skinflints and tax cheats who fled The Land of the Free to keep the IRS’ grubby tentacles off their inherited wealth. Fact: America is one of the only countries in the world that taxes its citizens regardless of where they live, so the “tax evasion” angle is a nonstarter. Furthermore, many expats remit money to their families back home. Nevertheless, the criminalization myth is one of the most pervasive and destructive ones, and we’ll return to it in a minute.
Myth: Expats gleefully burned their bridges before they left, and now block all American numbers from their fancy cellphones. Fact: 60 percent of expats visit the United States at least once a year; only 15 percent had not visited in the last two years. Furthermore, a whopping 90 percent identify themselves as “American,” albeit with varying degrees of gusto.
Many respondents to Dr. Klekowski von Koppenfels’ survey shared many of the same experiences. Here are some snippets:
• Political Pushaway: “As an American expat, I feel little support from the government, and indeed often feel as if I am being penalized or criminalized (by things like FATCA) for living overseas. I don’t feel as if expats have a voice in the government.”
• Family Problems: “My non-U.S. husband does not wish to reveal his personal bank information and I really do not think my government has a right to ask him for it. … So shall I lie to the government, divorce my husband, or give up my citizenship?”
• Economic Discrimination: “I am unable to contribute to my IRA because the contributions would be coming from a foreign bank account. It is dumber than dumb and makes me embarrassed when policy without thought touches people who are completely on the up and up and just working and living and in fact being goodwill ambassadors. I am tired of defending stuff that makes no sense.”
• Severe Disenchantment: “The U.S. seems to have very little understanding of its citizens living outside the States, consequently they seem to have very little respect for us.”
The Next Step
It’s important to note that the vast majority of expats have nothing but positive feelings for the United States, but it is impossible to ignore the growing undercurrent of disillusionment and resentment. Eventually, these negative emotions will erode the expat community, and it’s always tragic when anyone is thrown away.
One idea is to give expats a voice in the government. The District of Columbia has a nonvoting member in the House of Representatives, so why can’t Americans overseas have at least the same thing?
Persons on both sides of the aisle – Republicans Overseas and Democrats Abroad – want changes to FATCA, citing the law’s “unintended consequences.” There is practically no momentum for such changes, but there should at least be a dialogue concerning the impact that these disclosure laws have had on Americans overseas. Otherwise, expats will feel more and more isolated, and the loss of our best goodwill ambassadors would border on a national tragedy.
Learn more about FATCA in my upcoming presentation at TaxConnections Internet Tax Summit.
Original Post By: Michael DeBlis