Migration and Taxation in the Popular Imagination
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Taxpayer attitudes and beliefs are arguably as important as any economic analyses are when trying to understand a tax system. There is an even greater incentive to care about taxpayer perceptions in countries using tax systems that operate on a voluntary or self-assessment basis, like in the United States, because of the influence that those perceptions may have on compliance. Given the effect of these softer, social-normative-based considerations on the ability of the state to collect revenue, when should government respond to erroneous popular conceptions of laws affecting taxation? And, if government should respond, what is the best forum for doing so?
This Essay will examine these questions within the framework of popular attitudes regarding issues at the intersection of taxation and migration. There are at least three reasons to care about issues that occur at this intersection.
First, how migrants are taxed touches on the concepts of source and residence—two foundational aspects of who and what form part of the tax base. The phenomenon of migration forces society to think about taxation from an international perspective, which results in a much different conversation about the normative foundations of tax policy choices than one that focuses solely on the domestic realm. Most important in this different popular conversation is the inclusion of “us and them” concepts, which are not present, or at least not present in the same way, in conversations that consider only domestic issues. Second, flowing from the inclusion of “us and them” concepts, tax and migration are both politically sensitive topics subject to popular misinformation and misunderstanding, which can undermine trust in those tasked with regulating them. In addition to being contentious, the topics of taxation and migration are also fundamental to any society, as they touch on how to fund the nation state and who can come into and leave a community. Scholars commonly accept that people can be easily misled about contentious issues based on their pre-existing biases, and, assuming that we think it is a good thing that people have generally accurate perceptions of how these issues affect them, we should then be concerned if there are signs that individuals are being led astray. Finally, especially in the context of unauthorized immigrants and refugees, thinking about how issues at the intersection of taxation and migration are perceived is important because how we treat those of us who are most marginalized speaks volumes about who we are as a society and how we conceive notions of justice.
Accordingly, this Essay examines popular narratives and tax policy reality on the topic of the taxation of migrants, and it argues that the lessons learned from this exercise demonstrate why government ought to use media, especially social media, more proactively in an effort to dispel popular misconceptions. Drawing from news and social media as sources, Part I surveys tax-related attitudes and perceptions through case studies concerning expatriated U.S. corporations, unauthorized immigrants, and refugees. Part II provides an analysis of the case studies and discusses how a proactive effort by government to engage with the public through social media may alter the policy landscape. Part III comments on and critiques my proposal from a broader, policy-based perspective.
I. CASE STUDIES
Speaking generally, there are three issues that not only touch on taxation and migration, but also have been the subject of popular news coverage within the past five years. The first issue is corporate inversions. The second is the tax treatment of individual American expatriates. The final issue is the broad topic of lower-income individuals coming into the United States as immigrants, refugees, or as unauthorized workers.
I first wanted to survey as many news media reports as possible on these three issues. I restricted my searches to articles published within the last five years not only to ensure that my findings reflected current popular discourse, but also because people interact with media today in a manner that is both more personal and public than in the past due to the growing importance of social media in the public’s consumption of news. Because of the personalized experience and often members-only nature of social media, a comprehensive, unbiased survey would be next to impossible, and I did not attempt to include commentary directly from social media in my survey. I have, however, taken into consideration the effects of social media on news stories to the extent that such effects are referenced within traditional news sources.
*B.C.L./LL.B., McGill University Faculty of Law (2014). Graduate Tax Scholar and LL.M. in Taxation, Georgetown University Law Center (2016). Special thanks to Allison Christians, Leandra Lederman, and the participants at the Sanford E. Sarasohn Conference on Critical Issues in International and Comparative Taxation II: Taxation and Migration (Saint Louis University School of Law, Mar. 31, 2017) (“Sarasohn Conference”).