The anti-tax activist Grover Norquist on Friday compared a new Democratic proposal to penalize Americans who renounce their citizenship to evade taxes to policies employed by the Nazis and communists.
Sens. Chuck SchumerCharles SchumerCruz: 'Schumer and the Democrats want a shutdown' GOP fundraiser enters crowded primary for Pa. Senate seat Dems: Trump risks government shutdown over border wall MORE (D-N.Y.) and Bob CaseyBob CaseyDems crowd primaries to challenge GOP reps GOP fundraiser enters crowded primary for Pa. Senate seat Pennsylvania GOP rep announces bid for Casey's Senate seat MORE (D-Pa.) introduced legislation this week — in response to a Facebook co-founder ditching his citizenship — that would force wealthy people who give up their U.S. citizenship to prove that they did not do so for tax reasons.
“I think Schumer can probably find the legislation to do this. It existed in Germany in the 1930s and Rhodesia in the ’70s and in South Africa as well,” said Norquist. “He probably just plagiarized it and translated it from the original German.”
The Nazis infamously implemented a departure tax on Jews who tried to flee Germany before World War II. Schumer is Jewish.
The ATR president, the driving force behind an anti-tax pledge signed by the vast majority of Republican lawmakers, added that the communist East German government after World War II implemented a similar plan.
“The East Germans had the position that if you wanted to leave the country you had to pay them back for all the wonderful Communist education they gave you K through 12,” he said. “Schumer’s effort has a really distinguished history.”
A spokesman for Schumer said Norquist’s statement merely underscored how out of touch extreme conservatives are with middle-class Americans.
Schumer, who helps craft messaging for Senate Democrats, said this week that Eduardo Saverin, the Facebook co-founder, had turned his back on the U.S. after it helped him become a billionaire.
“The far right will go to such extremes to defend keeping taxes low on millionaires that they are even trying to turn someone like Mr. Saverin into a martyr despite his fundamentally unpatriotic act,” Brian Fallon, a Schumer spokesman, said in a statement.
Saverin’s decision — and Schumer and Casey’s bill — has ignited yet another Capitol Hill debate over tax fairness and tax reform.
Republicans argue the Democratic response to Saverin’s choice has been backwards — that instead of punishing citizens who renounce their citizenship, policymakers should reform the code in a way that makes taxpayers like Saverin want to stay.
But Democrats have said that while relatively few people have given up their citizenship over the last decade, Saverin’s choice helps prove their point that the tax code is unfair.
“The overwhelming majority of people who make it rich in America, whether they've been here 12 generations or they're immigrants, stay here, and they live up to their responsibilities,” Schumer told Bloomberg Television on Thursday. “About 10,000 people in the last 10 years have renounced their citizenship. Not a single one has been penalized.”
Born in Brazil, Saverin abandoned his citizenship last year, months before Facebook went public. He first moved to the U.S. in 1992, became a citizen in 1998, and later helped start Facebook at Harvard.
Facebook’s initial public offering this week was the talk of Wall Street, and the company’s shares stood at $38.23 on Friday after the first day of trading. Saverin owned 53.1 million of those shares, according to filings with the Securities and Exchange Commission, putting his stake at more than $2 billion.
Saverin has said that his decision to relinquish his citizenship had nothing to do with his tax bill. But he also now lives in Singapore, which does not tax capital gains, and his citizenship decision is estimated to have saved him tens of millions of dollars.
Schumer and Casey’s legislation would deem anyone renouncing their citizenship with a net worth above $2 million or a tax bill averaging at least $148,000 over five years a tax evader.
If that expatriate’s appeal to the IRS was turned down, they would then be barred from coming to the U.S., and their future gains on American investments would be taxed at 30 percent — twice the current rate for capital gains.
Top Democrats on Capitol Hill — including Senate Majority Leader Harry ReidHarry ReidDraft House bill ignites new Yucca Mountain fight Week ahead: House to revive Yucca Mountain fight Warren builds her brand with 2020 down the road MORE (D-Nev.) — have frequently sparred with Norquist in recent months, saying the anti-tax crusader is helping to block needed reforms that would help the U.S. rein in soaring budget deficits.
Democrats have long said they want to balance spending cuts with tax increases to help the country get on firmer financial footing. But by and large, Republicans have stood firm against all tax hikes, saying the federal government instead has a spending problem.
All but six House Republicans have signed the Taxpayer Protection Pledge administered by Norquist’s group, which says that any elimination of a tax break must be matched with a reduction in tax rates.
But even as Republicans have been pressing to cut spending to balance budgets, some GOP lawmakers also say they don’t feel bound by the ATR pledge anymore.
ATR says that lawmakers know before they sign the pledge that they it covers the entire time they are in a certain office.