Senate Dem urges Boehner to schedule vote on tax-dodging bill

Sen. Bob Casey (D-Pa.) on Monday urged the House to vote on a proposal to penalize citizens who give up their U.S. passports for tax purposes, not long after Speaker John Boehner appeared open to the idea.

Casey, in a letter to Boehner (R-Ohio), said the bill he introduced last week with Sen. Charles Schumer (D-N.Y.) would strengthen current law to ensure that Americans who renounce their citizenship to lower their tax bill are held accountable.

The two Democrats introduced the measure after Eduardo Saverin, the co-founder of Facebook, dropped his citizenship last year, months before the social-media company went public. Saverin’s decision is estimated to have saved him tens of millions of dollars in taxes — though the Brazilian-born entrepreneur, who now lives in Singapore, has said that did not play a role in his choice.

“We must take action against those who capitalize on the advantages of United States citizenship, but abuse the system to avoid paying their fair share,” Casey wrote to Boehner. “If the expatriate has built their fortune using resources only available to them because of their United States citizenship, then it is only fair that they pay their portion of tax on future gains instead of simply renouncing the country that has made their success possible.”

Boehner, in an interview with ABC News that aired on Sunday, didn’t close the door on bringing up the bill from Casey and Schumer, declaring it was “outrageous” for someone to ditch their citizenship for tax reasons.

The Ohio Republican also noted that the United States already had a law to combat that sort of action, but said he would support the Democratic bill “if it’s necessary.”

Still, Boehner’s comments also appeared to be one of the first suggestions that the bill could have a path forward in the GOP-controlled House. Other congressional Republicans — including key tax-writers like Sen. Orrin Hatch (Utah) and Rep. Pat Tiberi (R-Ohio) — have said that, instead of going after people like Saverin, the Uinted States should reform its tax code in a way to make keeping citizenship more attractive.

The anti-tax crusader Grover Norquist was more strident in his criticism last week, comparing the proposal from Schumer and Casey to policies enacted by the Nazis and communist regimes.

Under the Democratic bill, an American who renounces his or her citizenship with either a net worth of at least $2 million or who owed an average of at least $148,000 in income taxes over the previous five years would be assumed to be a tax evader, and would have to prove otherwise to the IRS.

If the federal government believes someone gave their citizenship up for tax reasons, they would then be barred from returning to the United States and their capital gains from American investments would be taxed at a 30 percent rate.

Schumer and Casey have both said that law now on the books to target expatriate tax evaders does not give the nation enough enforcement authority.

The proposal from the two senators also fits in with Democrats’ election-year messaging on tax fairness and economic equality, with Schumer and Casey making the case that Saverin walked away from the United States after the country helped him become a billionaire.

The Senate has already held one vote on the so-called Buffett Rule, which is named for the billionaire investor Warren Buffett and would install a minimum tax rate on millionaires. Meanwhile, President Obama’s campaign has been hammering Mitt Romney, the presumptive GOP nominee, for his private-equity record with Bain Capital.

Schumer has also dismissed Saverin’s declaration that his move was not because of taxes, noting that Singapore does not tax capital gains.

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