Tag Archives: Elon Musk

Pay to Go Away

Renouncing US Citizenship

Renouncing US Citizenship

Americans have always enjoyed the freedom to travel without restrictions within the country and, for the most part, abroad. No, we still can’t travel to Cuba on vacation, only for business. How this makes any sense, I don’t know. The embargo against Cuba, enacted in 1960, was the result of a federal temper tantrum resulting from our humiliating inability to overthrow Fidel Castro’s communist regime sitting just miles from the US coast. I would think we’d be over it by now, considering how Americans can travel to just about any other crappy dictatorship on the planet. But that’s another story. This one is the flip side to my Pay to Stay idea for dealing with illegal immigrants.

Our freedom to life, liberty, and the pursuit of happiness usually comes without a price tag. Well, that is, aside from the cost of national defense and the loss of life required to defend it. We are even free to vote, thanks to the Voting Rights Act, without having to pay any kind of poll tax or anything else that smacks of a tax–even an ID card.

You would think, therefore, that we would also be free to leave the country without having to pay a tax. After all, taxes are financial barriers that can stop people dead in their tracks. If you can’t afford to pay a tax, your rights are effectively limited. This is one reason why it is so important that our founding fathers prohibited taxes on interstate commerce, thus ensuring free trade throughout the country. But are we really free leave the country? As long as you plan to come back, sure, but if you renounce your citizenship and try to leave for good, sorry but no, you can’t.

Americans Renouncing Citizenship

Americans Renouncing Citizenship

American citizens who give up their citizenship may have to pay an exit tax, depending on the amount of their assets. Green card holders (lawful resident non-citizens) also have to pay an expatriation tax. If you are a U.S. citizen or long-term resident who expatriated on or after June 17, 2008, the tax law treats you as having sold all of your worldwide property for its fair market value the day before you leave. Even if you don’t sell your assets, the IRS will tax you on what you would have gotten if you had sold everything. This, of course, is based on a complicated process that requires appraisals and additional out of pocket costs. If the theoretical gains add up to more than $651,000, it is subject to U.S. tax at the capital gains rate.

I guess we could call this the “kick in the pants on your way out” tax. I guess the idea is that we have to allow you to leave, but you can’t take everything with you. That doesn’t sound quite right to me. For wealthy Americans with dual citizenship, however, it is a small price to pay to avoid the estate tax that will drastically impact their heirs.

Obviously these taxes are not very well known since not many Americans give up their citizenship and move out of the country. But the first quarter of 2013 saw 670 Americans to date doing just that. This is the largest number since the IRS began publishing figures in 1998. Isabel Getty, daughter and heir to the Getty oil fortune, and Eduardo Saverin, Facebook co-founder, are some of the latest ex-Americans.

What does the IRS have to do with citizenship? They are the ones to tax you on the way out, of course. It seems that the leading reasons for giving up US citizenship are US tax laws, including the estate tax and the taxation of worldwide income instead of just income that is earned within the US.

The US is the only industrialized country in the world that imposes taxes based on citizenship, meaning worldwide income and assets. Of course, they don’t get double taxed by countries that have a tax treaty with us, so it isn’t as bad as it might seem. The IRS has been on a witch hunt to find Americans who earn money overseas and do not declare it, so some wealthy individuals who have dual citizenship or spend a lot of time overseas are just deciding that it isn’t worth the cost to continue to be an American. I know what you are thinking, good riddance, right? Why shouldn’t they pay their fair share just like the rest of us in order to enjoy the benefits of citizenship?

Taxation of Foreign Income

Taxation of Foreign Income

Good point. But wealthy citizens already pay far more than the average American and, when you already live overseas or are faced with the prospect of paying millions of dollars you otherwise don’t have to, the benefits of citizenship can start to fade. Do we really want to be the country that penalizes its’ most successful and wealthy citizens or do we want them to move to other countries that will not impose onerous taxes? I do believe that the wealthy can afford to pay more and that our country benefits from the use of progressive taxation, but there has got to be a reasonable limit. Some countries, like Canada, will not even let you in unless you have a million dollars in the bank or highly employable skills. The United States will let just about anybody in but will tax the wealthy on the way out.

Atlas Shrugged movie

Atlas Shrugged movie

Obviously, this is of no relevance to 99.9% of the country, because most of us don’t plan to leave and even if we did, there wouldn’t be much to tax. Why Congress has bothered to even impose excessive personal taxes on foreign earned income, but continues to exempt multinational business income that is not brought back into the US, I don’t know. We’d be much better off focusing on the non-paying people right here in the country who are currently getting a free ride. So, let’s propose a new tax plan to Congress called Pay to Stay, Not to Go Away!

In case this doesn’t work, I have a plan to establish a new nation on a rising volcanic island or a sea platform. It keeps looking better all the time. With a few wealthy sponsors, I should easily be able to fund its development and settlement. Anyone who is willing to pay a tax to leave the country probably has enough to invest in a better alternative. I’ll call my new nation Atlas and the national salute will be a shoulder shrug. When Elon Musk gets his rockets working a little more reliably, we’ll move it to a platform in orbit and then to Mars.

Atlas Stage 1: Sea Platform

Seasteading Platform

Seasteading Platform

Atlas Stage 2: Space Platform

Elysium Space Station

Elysium Space Station

Atlas Stage 3: Mars Colony

Mars Colony

Mars Colony

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Legislative Duty

Classical Democracy

Classical Democracy

As we get ready to swear in the new 114th Congress, let’s take a few minutes to think about the system of government we have established and how well it has been working. Some of you are probably happy about the change in control of the House of Representatives, but all things considered, not much has really changed in terms of who runs the US government.

The American Revolution was a watermark in human history as our founding fathers effectively began a great human experiment with a new form of democracy. The implementation of separation of powers and checks and balances in the form of executive, legislative, and judicial branches of government, were not the only innovations. The establishment of the trial by jury system was not only a symbol of democracy, but a superb solution to the problem of crime and punishment. It had been evolving over time as a part of English common law as well as jury systems in other parts Europe and elsewhere. They jury system was widely believed to work much better than the old systems of relying on a cadre of professional judges or a king and his ministers, to make decisions on civil or criminal matters.

Approval Rate of Congress

Approval Rate of Congress

The creation of our elective system of representation was innovative, but not necessarily as democratic as we think or as effective as our founding fathers might have hoped. It turns out that we have seen our elective system turn into one where the vast majority of incumbent politicians are re-elected year after year, even though the public opinion of their performance is extremely low. Our politicians are widely believed to be beholden to special interests and focused mainly on getting re-elected by avoiding hard decisions because the necessary solutions may be unpopular. Most legislators are millionaires and/or attorneys who are simply not a representative cross-section of the country. Congress has developed a culture of corruption.

Many have considered ways to make the system better, to no avail. Campaign finance reform has proven to be an ineffective joke, since the 1st Amendment, which guarantees our freedom of speech, effectively prevents any limit on campaign activities. Even our founding fathers debated the usefulness of term limits, but declined to write them into the Constitution. Many states and local governments have implemented term limits, but it does not seem to have helped to change the nature of politics. I wasn’t sure there really could be any solution that would result in a body of leaders more committed to serving the country than to their own personal self interests.

Trial by Jury System

Trial by Jury System

Then, a thought hit me. I wondered if we could just replace our current system for one that might even be considered more democratic and effective—one based on the jury system. Just think about what would happen if ordinary citizens were given the chance to serve in the state legislatures and Congress for a limited period of time. No professional politicians, just a cross-section of citizens from all over the country. Could they really do worse than the current elected officials we pay to do the job and to stay in office virtually for life?

I know what you are thinking. What fool would put his life and the future of his country in the hands of a bunch of ordinary idiots? To that, I respond, what fool would put his life and the future of his country in the hands of a bunch of highly-paid, power-hungry, idiots?

Are juries elected? No. Do they possess any special knowledge or expertise that ordinary citizens do not? No. Are they easily corrupted? No. Are they easily fooled? Maybe, but I’d rather take a chance with a well-meaning jury than a corrupt one. Besides, if the pool of people making the decisions is diverse and large enough, it is likely that the collective decisions will be even better than those made by an elite pool of professional politicians. I think that 100 senators and 435 representatives are enough to provide the required diversity and knowledge.

Wisdom of Crowds

Wisdom of Crowds

In the book “The Wisdom of Crowds,” James Surowiecki discusses many cases in which groups of ordinary people with limited knowledge can, collectively, make better decisions than experts. And those studies were comparing experts who were honestly trying to make the best decision they could, not corrupt ones trying to serve their own self interest, so I would expect the comparative results to be even better.

After coming up with what I thought would be a great new idea, I discovered that I was, in fact, several thousand years behind the first democratic thinkers. Yes, the citizens of the first known democracy, the ancient Greek city state of Athens, had a system that worked in just this way.

In the cities of Ancient Greece, the Boule was a council of citizens appointed to run the daily affairs of the city. It’s origin was from the council of nobles that advised a king, but boules evolved differently according to the constitution of the city. In a democracy such as Athens, members were typically chosen by lot and served for only one year. Little is known about the workings of many boulai (plural of boule), except in the case of Athens, for which extensive material has survived.

Athenian Assembly

Athenian Assembly

An Athenian Boule was a randomly-selected 500-citizen council similar to a grand jury or citizens’ assembly. Any citizen had the right to propose initiatives and the Boule decided which issues were important enough to be on the agenda. This was followed by a majority vote of the entire electorate. This is the origin of the Athenian initiatives system, which they considered the incorruptible cornerstone of their democracy. In ancient Athens, the Council of Five Hundred operated for 180 years. Archeologists did not discover critical Greek texts describing this until 100 years after the Founding Fathers wrote the US Constitution.

Today, we live in a society a tad larger than an ancient Greek city state, so one would expect some slight modifications to their system. Interestingly, however, our Congress consists of 535 members, which is already almost the same size to an Athenian Boule. So, here is a blueprint for how it could work, although I’m certainly open to suggestions. If and when I manage to buy an island and start a new country, or maybe sign up to establish the first Mars Colony with Elon Musk, I’ll be sure to try out a Boule system.

Any citizen at least 25 years old, without a criminal felony record, would be able to submit his name into a pool for legislative duty, which would last for only two years with no chance for a second term. Legislators would be paid a very good, but not exorbitant, salary of about $150,000 and would be provided free temporary housing near the state or national capital where they will be working. No pension, no special gold-plated benefits, and no chance of ever becoming a lobbyist. Legislators would have to sign a contract agreeing not to accept any contributions or gifts from anyone or to accept any post-employment job offers or other benefits.

Chicago Election by Lottery

Chicago Election by Lottery

Two weeks before the election, five people for each available legislative spot would be chosen via a lottery. This is the essence of the jury system, but without the vetting process available to prosecution and defense attorneys. I had considered allowing the political parties to approve or disapprove of some candidates until they had an agreed-upon group, but figured that would just invite corruption and mediocrity into the system. So, to ensure there are sufficient checks and balances to the system, the lottery winners would simply undergo a criminal background check and be put up for public election. Each person would be encouraged to publicly declare his or her political party affiliation, if any, to state their position on any issues of interest, and participate in any debates.

Since our current single-vote system does not work well for elections with more than two popular candidates, we should probably use a rank-ordering voting system. Instead of just voting for one candidate, voters would list all the candidates in their order of preference. The candidates with the fewest number of #1 position votes would get eliminated, and the votes cast for them would be replaced with the voter’s #2 choice. This would continue until one candidate had a majority of the votes.

The role of political parties would be limited, during the elections, to something more like a lobby trying to promote their preferred candidates. After the election, the legislators would be free to join any party of their choice, or to create their own new party from other like-minded legislators.

The selection and election system would be simple, quick, and mostly random, but the resulting legislature as a whole should consist of a more representative body with a more diverse group of backgrounds, knowledge and experience than we have today. In other words, it would be a more democratic, and hopefully less corrupt, group of representatives.

American Idol SMS Voting

American Idol SMS Voting

X-Factor Voting

X-Factor Voting

Furthermore, we should establish a national electronic voting and polling system to enable these representatives to put important questions up for national vote, or to take local polls to get a sense of their local area’s public opinion. Maybe this would help to turn around the low and falling voting participation rate in this country. I suspect that more people now vote in TV talent shows like American Idol or the X-Factor than vote in US national elections.

Some groups have already been trying to propose the establishment of a boule system. Is it likely to be implemented, considering that constitutional amendments must be approved by Congress or three fourths of state legislatures? Of course not! But it may be just crazy enough to work as well as our jury system. In fact, with some minor tweaks to the process, we don’t even have to amend the Constitution to make it happen. We just need some new political parties that agree to select candidates via a lottery system, instead of via a primary election or caucus (fat chance). Unfortunately, the current electoral system will probably ensure these candidates have little chance of victory against the traditional Republican or Democratic candidates in the general election. However, if a miracle occurred and all existing political parties agreed to select their own candidates by lottery, we would have a new electoral system that could transform our government.

Until such time as the people become so fed up they are willing to take action, we are going to have to find other less-effective ways to deal with a corrupt, unpopular, Congress. Maybe a revolutionary group in some small country will overthrow their government and experiment with democracy using the boule system instead of establishing a new dictatorship. If not us, who will create the first new form of democracy for the 21st century? We may have to wait for the establishment of a constitution for the first Mars colony to start over again. I can dream, can’t I?

Extra-Terrestrial Colony

Extra-Terrestrial Colony