Justice Kavanaugh asked some important practical questions during oral argument in the birthright citizenship case in the Supreme Court last week. The executive order in dispute purports to deny citizenship to children born in the United States based on the noncitizenship of their parents. “What do hospitals do with a newborn, what do states do with a newborn,” asked Kavanaugh.
The lack of an answer from the government’s counsel betrays something you might not have thought about: It’s administratively simple to award a place in our community of freedom to those lucky enough to be born here.
Never mind proof of citizenship. For me, the practice of handing new parents paperwork to enroll their babies in the Social Security system is an affront. It’s the first step in reducing a boundless new life to one of paying taxes, filling out forms, navigating regulations, and living as a supplicant to however many government programs.
Imagine every hospital in the country not just handing out Social Security forms but investigating the citizenship status of each parent when a child is born. Imagine what it would say about our country.
But sticking with the practical, there should be analysis of the privacy and paperwork costs of every new plan and program. Such analysis should particularly document costs to innocent, law-abiding people.
I was interested to learn of the Rube Goldberg tax on remittances that has been inserted into at least one version of the “big, beautiful bill” making its way through Congress. Peter Van Valkenburgh of Coin Center has a thorough write-up, including this summary:
Deep in Section 112105 of the latest omnibus proposal is a brand‑new excise tax on “remittance transfers.” Every time a consumer sends money abroad, the government would tax 5% of the amount. The tax is drafted to ride piggy‑back on the Consumer Financial Protection Bureau’s existing remittance‑transfer rules, turning every “remittance transfer provider” into a tax collector for the Treasury Department.
There’s one statutory way out of that tax, however: identify yourself as a U.S. citizen or national and use a provider that has signed a compliance agreement with Treasury to do that identification and verification. Fail either step and you must pay the 5%.
Some percentage of illegal immigrants send remittances. I understand the uncharitable idea: Take some of the money they are sending home to support their families. Put aside for the moment that such money enriches the home countries of illegal immigrants, reducing the wealth gradient and thus the incentive to emigrate.
I want to focus on the effect such a program has on law-abiding American citizens. The proposal is to have each law-abiding American who is sending a remittance submit proof of citizenship to the remittance provider.
Oh, good—another entity collecting documents and financial information. (I have a history of opposing such things and highlighting their negative consequences for data security.)
But the Rube Goldberg tax offers an out. If a remittance provider is not set up to assess citizenship status, it can collect people’s Social Security numbers and submit those to the government. Then law-abiding Americans can file for a return of the 5 percent tax in their annual tax filings.
Oh, good—another line on our tax forms.
This remittance tax has it all: More forms to fill out, more data to hand over to private companies, more private companies acting as tax collectors or law enforcers, and more complexity in our tax forms. If I didn’t dislike all these things, it would be worthy of some kind of award.
This proposal is in line with a genre of policy I’m particularly concerned with, those that press toward a national ID system with a proof-of-citizenship requirement. The REAL ID Act, regular readers of mine will know, is such a system, and it should be resisted in the name of a lasting American freedom.
These kinds of proposals have been pressed for decades right along with the growth of administrative government. Ronald Reagan fielded a proposal for a national ID system in 1981 and dispatched it quickly with characteristic wit, saying, “Maybe we should just brand all the babies.”
The post How Much Paperwork, How Little Privacy for the Innocent? appeared first on American Enterprise Institute – AEI.
