Love It or Leave It

Surely the most heart-wrenching human-interest story in the press recently was a cover article in Forbes magazine titled “The New Refugees.” These miserable souls are not fleeing conventional forms of oppression, such as the famine, dictatorship, torture and murder that have caused millions to seek haven in the U.S. through the generations. These are rich folks who, according to Forbes, are giving up their American citizenship — the very status boat people by the thousands are risking their lives for even today — because (according to one quoted legal expert) they “can’t pay the federal tax rate and live in the style they want.”

Poor babies! To be sure, these are not exactly your classic “huddled masses.” Whether they are “wretched refuse,” though, is a different question.

As a “trend” story, “The New Refugees” is a bit of a stretch. It turns out that only 306 Americans gave up their citizenship last year. Somewhat desperately, Forbes characterizes the number of expatriates as enough to “practically fill a Boeing 747.” But out of 260 million citizens, the number is pretty small.

Nevertheless, Forbes — a conservative publication, ordinarily not averse to a bit of flag waving — brings enormous sympathy to this tale of Americans abandoning their country. It seems that “victim chic,” ordinarily decried as a left-wing phenomenon, knows no bounds of reason or ideology. These people, after all, are less like traditional refugees than they are like the Americans who went to Canada during the Vietnam War. They are fleeing the draft — of their wallets, not their bodies. It’s a smaller imposition, some might think. Those who fled in the 1960s were motivated, at best, by principled opposition to a government policy and, at worst, by a desire to save their own lives. The “new refugees” merely want to save money. And these financial draft evaders are not even barred completely from our shores. Under the rules, they are allowed to spend 120 days a year in the country they decline to support.

The “new refugees” aren’t going to Canada. Nor are they going to Britain, France, Germany or Japan. These grown-up nations all have tax rates roughly equivalent to those in the U.S., or higher. Mostly the “new refugees” are going to island pseudo countries with names like St. Kitts and Nevis or Turks and Caicos. The U.S. says, “Give me your tired, your poor.” These tax havens say the opposite. They are places of Third World poverty where the well-to-do, in exchange for some investment, are invited to shed the normal obligations of citizenship in the developed world.

One of those obligations is the defense of freedom. Forbes notes, without irony, that “the end of the cold war means wealthy Americans can live in many developing nations safely.” How long would that be true if it weren’t for the American defense structure, paid for by the American taxpayer? The Turks and Caicos Islands, freedom loving though they may be, are not exactly in the forefront of the protection of that freedom.

In predominantly middle-class nations like the U.S., taxes also support a level of shared infrastructure (roads, sewers) and social services (police, schools) that poorer countries simply cannot afford. In those countries, the rich provide such services, more cheaply, for themselves alone, and the poor do without. One of the pleasures of membership in an advanced society like ours is precisely the knowledge that certain mundane aspects of life are shared by all. This gives a daily reality to the otherwise abstract democratic ideal. We all drink the same water, walk the same sidewalks, are guarded by the same cops. If 306 rich people derive no such democratic pleasure from life in America, maybe they really do belong someplace else.

True, American taxes serve a third function: outright redistribution that supports even the poorest citizens at levels that would seem luxurious by Third World standards. That too is a price of membership in an advanced democratic society that either you think is worth it or you don’t. Of course we argue endlessly here in America about whether tax rates are too high and whether the government should be spending money on this or that. But the U.S. will never be able to compete with Third World backwaters for the allegiance of the mobile rich if tax rates are the only criterion.

Would-be refugees from the U.S. — “yacht people”? — might want to wait, * though, before burning their passports. The good news is that, in some ways, this country is becoming more like the Turks and Caicos Islands every day. As noted by thinkers from Labor Secretary Robert Reich on the left to IQ- obsessive Charles Murray on the right, technology and global trade are increasing the gap between rich and poor (even as they make us all richer on average). Increasingly, as well, affluent Americans do provide their own social services, such as schools and security and even roads in gated communities, while the general level of such services in society is allowed to deteriorate. And with the Republicans in control of Congress, the rich can even hope for some relief from those allegedly confiscatory top-bracket tax rates.

So don’t give up on America yet, yacht people. You needn’t move to the Third World. The Third World is coming to you.