[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Senate]
[Page S12297]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXPATRIATION PROVISION OF THE IMMIGRATION BILL
Mr. MOYNIHAN. Mr. President, the immigration bill signed into law on
September 30 includes the following provision:
SEC. 352. EXCLUSION OF FORMER CITIZENS WHO RENOUNCED
CITIZENSHIP TO AVOID UNITED STATES TAXATION
(E) Former Citizens Who Renounced Citizenship to Avoid
Taxation.--Any alien who is a former citizen of the United
States who officially renounces United States citizenship and
who is determined by the Attorney General to have renounced
United States citizenship for the purpose of avoiding
taxation by the United States is excludable.
The wording of the statute is embarrassing. How can an alien renounce
U.S. citizenship? In what capacity would said alien do so officially?
One assumes that a court of law would find the language incoherent and
unenforceable. Still, the intention is clear and needs to be addressed.
This is the way we legislate at 5 o'clock in the morning 4 days
before adjournment. One wonders how many other similar items ended up
in the continuing resolution passed by the Senate less than 6 hours
before the end of the fiscal year.
The provision imposes an extraordinary penalty on certain persons who
exercise the legal prerogative of expatriation: permanent exile from
the United States. Wealthy individuals who renounce their American
citizenship to avoid U.S. taxation--expatriates, as they are called--
have now been added to the list of terrorists, convicted criminals,
persons with communicable diseases, and others who are by statute
deemed unworthy of admission to the United States.
It occurs infrequently, but expatriation to avoid taxes is even so a
genuine abuse. By renouncing their U.S. citizenship, individuals may
avoid taxes on gains that accrued during the period in which they
acquired their wealth--and while they were afforded the benefits and
protections of U.S. citizenship.
This issue was considered by the Finance Committee early in the 104th
Congress. In March 1995, a measure to address the problem was included
in Senate legislation to restore the health insurance deduction for the
self-employed. Prior to the House-Senate conference, however, concerns
were raised about whether the expatriation provision comported with
article 12 of the International Covenant on Civil and Political Rights,
which states: ``Everyone shall be free to leave any country, including
his own.'' The United States is a party to this treaty, and it is
accordingly law. We consulted a number of scholars, but there was no
immediate consensus on the matter.
Because of the urgency of the underlying legislation, which had to be
enacted before the April 17th tax return filing deadline, the conferees
chose to drop the expatriation provision so that the questions of
international law could be studied. That decision by the conferees was
met with criticism in the Senate. This was surprising, since I
believed--and I said on the Senate floor more than once--that it was
our duty to act with special care when dealing with the rights of
persons who are despised.
The issues of international law were later resolved, and on April 6,
1995, I introduced S. 700, the first Senate bill to tax expatriates on
gains accrued prior to expatriation. Subsequently, Chairman Archer
introduced a bill that did not follow the accrued gains approach, but
instead built on current law. In my view and that of the Treasury
Department and most other tax experts, the House bill will not
effectively deter tax-motivated expatriation. However, the Joint
Committee on Taxation estimated that the House bill raised more
revenue, and it was included as an offset in the recently enacted
Health Insurance Portability and Accountability Act of 1996.
Now, having failed to adopt the preferable--in my view--Senate
expatriation measure, we have compounded our error by enacting an ill-
advised provision to punish tax-motivated expatriates by banishing them
from the land.
The appropriate response to exploitation of a loophole in the Tax
Code is to close the loophole. Just 6 months ago, the Deputy Attorney
General of the United States agreed. On March 13, 1996, Deputy Attorney
General Jamie S. Gorelick wrote to House Speaker Gingrich in opposition
to the provision. She wrote:
The Administration believes that tax issues should be
addressed within the context of the Internal Revenue Code,
and that it would be inappropriate to use the [Immigration
and Naturalization Act] to attempt to deter tax-motivated
expatriation.
A short while later, however, the administration reversed its
position. On May 31, 1996, Ms. Gorelick wrote another letter in support
of the provision. I ask unanimous consent that excerpts of both letters
be printed in the Record.
Mr. President, we were unable in this Congress to secure needed
changes in the tax laws to resolve, again in my view, the expatriation
problem. We ought to have enacted S. 700. Instead, we have enacted a
measure that does not reflect well on a free society. I do hope we will
reconsider this matter early in the 105th Congress.
There being no objection, the excerpts were ordered to be printed in
the Record, as follows:
Office of the
Deputy Attorney General,
Washington, DC, March 13, 1996.
Hon. Newt Gingrich,
Speaker, House of Representatives,
Washington, DC.
Dear Speaker Gingrich: This letter presents the views of
the Administration concerning H.R. 2202, the ``Immigration in
the National Interest Act of 1995,'' as reported by the
Committee on the Judiciary on October 24, 1995.
[[Page 12298]]
Many of the provisions in H.R. 2202 advance the
Administration's four-part strategy to control illegal
immigration. This strategy calls for regaining control of our
borders; removing the job magnet through worksite
enforcement; aggressively pursuing the removal of criminal
aliens and other illegal aliens; and securing from Congress
the resources to assist states with the costs of illegal
immigration that are a result of failed enforcement policies
of the past. The Administration's legislative proposal to
advance that strategy is H.R. 1929, the ``Immigration
Enforcement Improvements Act of 1995,'' introduced by
Representative Howard Berman on June 27, 1995.
The Administration endorses a framework of legal
immigration reform that respects our immigration tradition
while achieving a moderate reduction in overall admission
numbers to promote economic opportunities for all Americans.
The Administration seeks legal immigration reform that
promotes family reunification, protects U.S. workers from
unfair competition while providing employers with appropriate
access to international labor markets to promote our global
competitiveness, and promotes naturalization to encourage
full participation in the national community.
While the Administration strongly supports reform of the
current immigration law that affects both illegal and legal
immigration, and H.R. 2202 contains many provisions that are
similar or identical to the Administration's legislative
proposal, enforcement initiatives, and overall strategy, H.R.
2202 raises serious concerns in specific areas that we hope
the House of Representatives will examine thoroughly. The
Administration's concerns include, but are not limited to the
following:
* * * * *
Section 301(e) amends section 212 (a)(10) of the INA, as
redesignated by this bill, by adding a new subparagraph which
makes inadmissible any alien, who is a former citizen and who
the Attorney General determines has officially renounced his
citizenship for purposes of avoiding taxation by the United
States.
The Administration has proposed changes in the Internal
Revenue Code to remove incentives that encourage certain U.S.
citizens to avoid U.S. taxes by renouncing U.S. citizenship.
The Administration approach has been passed by the Senate
twice and is being considered in the ongoing balanced budget
negotiations. The Administration believes that tax issues
should be addressed within the context of the Internal
Revenue Code, and that it would be inappropriate to use the
INA to attempt to deter taxmotivated expatriation.
* * * * *
Sincerely,
Jamie S. Gorelick,
Deputy Attorney General.
____
Office of the
Deputy Attorney General,
Washington, DC, May 31, 1996.
Hon. Lamar Smith,
Chairman, Subcommittee on Immigration and Claims, Committee
on the Judiciary, House of Representatives, Washington,
DC.
Dear Mr. Chairman: This letter presents the views of the
Administration on H.R. 2202, the ``Immigration Control and
Financial Responsibility Act of 1996''. The Administration is
reversing decades of neglect in controlling illegal
immigration. Many of the provisions in both the House and
Senate bills would ratify the Administration's efforts in the
field to combat illegal immigration. The administration's
four-part strategy calls for regaining control of our
borders; protecting U.S. workers through worksite
enforcement; aggressively removing criminal and other
deportable aliens; and obtaining the resources that are
necessary to make the strategy work. Both the House and
Senate bills contain many provisions that support the
Administration's enforcement initiatives and are based on or
similar to the Administration's legislative and budget
proposals.
We look forward to working with the conference committee to
craft a strong, fair, and effective immigration bill.
However, H.R. 2202 raises serious concerns in specific areas
that we hope the conference committee will examine
thoroughly. In addition, a number of amendments to the
Immigration and Nationality Act (INA) made by the
Antiterrorism and Effective Death Penalty Act of 1996, Pub.
L. 104-132, present substantial obstacles to the effective
enforcement of the immigration laws. The conference committee
has an opportunity to remedy some of those problems with a
careful and more comprehensive approach to amending the INA.
The Administration's views include, but are not limited to
the following:
* * * * *
We strongly recommend adoption of the House provisions
contained in sections 301 (except 301(c) and (f)), 303, 304,
305, 307, 308, and 309. However, an amendment must be made to
strike section 241(d) (added by the AEDPA) which provides
that aliens ``found in'' the United States without having
been inspected and admitted are inadmissible. This language
is problematic, will lead to litigation; and is inconsistent
with the House immigration bill. In addition, there is no
waiver provision for inadmissibility under the newly-created
section 212(a)(9), even for immediate relatives of U.S.
citizens. We strongly recommend the inclusion of a
discretionary waiver of inadmissibility.
* * * * *
Sincerely,
Jamie S. Gorelick,
Deputy Attorney General.
The PRESIDING OFFICER. The Senator from Virginia.
____________________