FAMOUS AMERICANS WHO WOULD STILL BE CITIZENS IF WE HAD THE FAIRTAX
https://247wallst.com/special-report/2022/09/08/famous-americans-who-are-no-longer-us-citizens/
We selected the former Americans who renounced their citizenship for tax reasons.
Have you ever heard of Tupperware? Byrnes and Harrington tell us that Earl Tupper came up with the idea of airtight plastic containers during WWII using a block of polyethylene provided by DuPont. After selling his company to the Rexall Drug Company in 1958 for $16 million, Tupper eventually moved to Costa Rica and renounced his U.S. citizenship to avoid taxes.
Some of you have been around long enough to remember the movie “The King and I.” Russian-born actor Yul Brenner played the role of the Siamese monarch. Brenner was a dual citizen of Switzerland and the United States. Byrnes and Harrington observe that Brenner claimed tax-exempt status in the U.S. by working on short projects that didn’t subject him to American tax law. Uncle Sam disagreed and imposed penalties that probably would have bankrupted him. To avoid the tax hit, Brenner renounced his U.S. citizenship.
Most investors know the Templeton Fund. Byrnes and Harrington quote Money Magazine, when it called John Templeton “the greatest global stock picker of the century.” Templeton renounced his U.S. citizenship in 1968 before he sold his company to Franklin Resources. He then moved to the Bahamas where Bahamians don’t pay income or investment tax.
Have you ever been on a Carnival cruise? Co-founder Ted Arison was born in Israel, and moved back there in 1990. As Byrnes and Harrington note, he gave up his U.S. citizenship to avoid paying taxes on his estate.
You may have some Dart container foam cups in your kitchen. Byrnes and Harrington note that Kenneth Dart renounced his American citizenship in 1994 when he obtained citizenship from Belize. He later moved to the tax haven of the Cayman Islands. His brother, Robert, holds Belizean and Irish citizenship and lives in London.
If you have seen a Monty Python movie, you should know that the American director who helped form the group, Terry Gilliam, held dual American and British citizenship for three decades after marrying a British subject. Byrnes and Harrington report that Gilliam gave up his American citizenship in 2006 because he did not live in the U.S. anymore and “got tired of [his] taxes paying for exciting little wars around the world.”
Denise Rich, a Grammy-nominated singer, wealthy socialite, and former wife of infamous and pardoned billionaire Marc Rich, gave up her U.S. citizenship in 2011. Byrnes and Harrington say it is largely believed that she did this in order to avoid a hefty U.S. tax bill on her estate. She is also a citizen of Austria.
You may not have heard the name Eduardo Saverin, but you have heard of Facebook. Byrnes and Harrington report that Saverin was a Facebook co-founder who fell out with Mark Zuckerberg. He renounced his U.S. citizenship ahead of the company’s IPO launch in 2011 when he owned 4% of the social giant. If he had not renounced his citizenship, he would have paid a lot in taxes. Born in Brazil, Saverin now lives in Singapore.
Actress Elizabeth Taylor is a special case. Byrnes and Harrington say that Taylor, born in the United Kingdom to American parents and having derivative U.S. citizenship through them, returned to the U.S. with them and settled in Los Angeles. For unknown reasons, she tried to renounce her citizenship in the mid-1960s and finally succeeded in 1966. She reportedly reacquired her U.S. citizenship when she married her seventh of eight husbands, Virginia Senator John Warner. Byrnes and Harrington don’t mention this anomaly, but Taylor became the motivation behind an informal tax rule known as the “Elizabeth Taylor Amendment.” The IRS adopted a rule that says that any American who gives up citizenship is presumed to do so in order to avoid U.S. taxes. Under that rule, the IRS would continue to hound former Americans abroad for several years. Now, renouncing citizenship costs a couple of thousand dollars and may supplant the Elizabeth Taylor Amendment.
Former U.K. Prime Minister Boris Johnson is the most recent and well-known figure who renounced his U.S. citizenship. Johnson was born in New York to two British diplomats. When he was about to become the Prime Minister, he ran over to the U.S. Embassy in London to make his renunciation. That step saved him the trouble of filling out U.S. tax returns henceforth.
What do these former Americans have in common? As Americans living outside the United States, they are uniquely subject to U.S. taxation on their worldwide income. Except for Eritrea and possibly North Korea, no other country in the world imposes a similar burden on its citizens. A German citizen, for example, who lives in New York and maintains no residence in Germany is not subject to German income taxes, unless he or she derives income specifically from Germany.
If the FAIRtax had been in place, there’s a good chance that these Americans would have continued to be Americans. The FAIRtax imposes a tax only on retail sales that take place in the United States. Consequently, Americans who live abroad would be untouched by the FAIRtax as long as they don’t make any retail purchases here.
I would love to hear about any stories you may have about Americans abroad who fall into the U.S. income tax snare.
Jim Bennett
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