The Congressional Progressive Caucus, one of the larger Democratic Party caucuses, has proposed to end the Foreign Earned Income Exclusion in their 2013 “Budget For All”, details of which were revealed yesterday following a vague press release last week. As U.S. persons abroad have already learned, when American homelanders use words like “all” and “us”, we are decidedly not included, except when they want money from us. Indeed, with this latest budget proposal, even members of the Americans Abroad Caucus have come out in support of eliminating the FEIE.
This one appears to be the brainchild of Raúl Grijalva (D-AZ), the CPC’s co-chair Correction: the “Budget For All” is the brainchild of Mike Honda (D-CA), chairman of the CPC’s Budget Taskforce and a member of the Americans Abroad Caucus. John Tierney (D-MA), whose so-called Tax Equity And Middle Class Fairness Act proposed the same thing in July 2011, is also a CPC member. Both Grijalva and the other CPC co-chair Keith Ellison (D-MN) were supporters of Tierney’s earlier bill. Details are very sketchy at this point, but in the CPC’s “executive summary” they give a one-line mention of eliminating the Foreign Earned Income Exclusion at page 3 under the heading “Individual Income Tax Policies”. Then at page 17 they repeat the tired old projection that eliminating the FEIE would raise $71 billion over 10 years, starting from $4 billion in 2013 and growing to $9 billion.
This projection ignores the obvious fact that people respond to new taxes by changing their behaviour. We U.S. persons outside of the U.S. have many options, none of which contribute to Grijalva’s goals. We may increase our use of the Foreign Tax Credit, thus incurring far greater tax preparation costs due to the higher complexity of Form 1116, leading to new Ferraris and island vacations for accountants, but little additional revenue for the Treasury. We may return home and add to the ranks of the U.S. job-seekers just like our predecessors did a generation ago, the last time Congress eliminated the Foreign Earned Income Exclusion in the 1970s before hastily restoring it three years later — though not before U.S. exports had collapsed as American businesspeople abroad abandoned emerging markets to German and Japanese competitors. Or we may renounce U.S. citizenship and get away from a government and a public which shows no understanding that we are already taxed where we live, which keeps making it more difficult for us to live normal lives abroad, and which sees us as nothing more than easy pickings for further plunder.
The CPC claims that their budget “asks those who have benefited most from our economy to pay a sensible share”. This principle makes perfect sense to me. All I ask in return is a sensible share of federal highway and educational funding given the location where I reside. The definition of “sensible” that two hundred other countries and territories in the world use would suggest both those “shares” should be zero. The CPC definition of “sensible”, on the other hand, would suggest that they’d better get busy on building me an interstate highway. I’ve always wanted to take a road trip to Hawaii.
Honda’s contact details can be found here if you would like to tell him what you think of his plan. He is also on Twitter: @RepMikeHonda
Update: One other thing worth noting. The membership of the Congressional Progressive Caucus includes the head of the Americans Abroad Caucus along with eight other AAC members. That’s fully a third of the AAC’s membership. The list:
- Carolyn Maloney (D-NY)
- Michael Capuano (D-MA)
- Andre Carson (D-IN)
- Donna Christensen (D-VI; non-voting)
- Steven Cohen (D-TN)
- Mike Honda (D-CA) — chairman of the CPC’s Budget Taskforce which produced the “Budget For All”
- Jim McGovern (D-MA)
- Jim Moran (D-VA)
- Janice Schakowsky (D-IL) — spoke out in support of the “Budget For All” in a YouTube video
@Ben Franklin,
You make good points. I appreciate them.
The petition thing is probably not going to be effective, as it doesn’t touch enough progressive people in the homeland to get enough signatures to make a difference. I watched the quixotic attempt of one person to get a lot of signatures on the “Repeal FATCA” petition, and he was struggling to get 2000 signatures, so I full understand the point.
http://www.signon.org/sign/repeal-fatca?source=c.em.cp&r_by=188650
Good for Rami Schandall for trying!!
Like I said, I don’t have a lot of passion for it, but if you were to try and get the issue in front of the progressives, this might be an avenue. They seem pretty passive on doing anything that might appear to be in opposition to Obama in an election year.
This might be a route that would get some of those progressives attention, if crafted right, even if the petition just withered away and died. Tie it to Gay rights, or a Woman’s right to choose, if you have to… LOL. Somewhere there is a hook, I just don’t know what it is.
Anyway, as you can see, I am not rushing out to do one, but if anyone did want to, this one might be as good as any for the progressive side of the house.
@Just me
I think the progressives will be the toughest nut to crack. They seem to dislike expats the most. I could be wrong but I think most of the anti-expat legislation has come from the Democrats, except of course anti-expat Grassley, who probably doesn’t even have a passport.
I think the mainstream Republicans could potentially be very receptive to the need of expats for boosting exports. Gingrich even wrote an article about it a while back.
The Libertarians (maybe 10% of population) dislike the government in general and the movers and shakers within the Ron Paul movement such as Lew Rockwell and Dan Mitchell have written several articles in support of expatriation.
So why not work on the ones that are most likely to be receptive rather than burning LCUs on the toughest nuts to crack?
@Just Me
My sense is any petition has to be targetted at a specific person or group persons. Unfortionately no one seems to want to drop the dime on whoever is Mr. FBAR or Mr. FATCA in Congress. One thing that annoys me about about Democrats Abroad and ACA is the refuse to say who exactly in Congress are the strongest backers of FATCA something they clearly do know from the advocacy activities in DC.
I also noticed recently that a group called U.S. PIRG recently held a press conference with Reps. Chris Van Hollen and Lloyd Doggett calling for “faster” implementation of FATCA. Given the staff at US PIRG seems to be fairly accessable I am going to send them some info on what “progressive” politicians in Canada are saying about FATCA before I call for them to be completely blown out of water. PIRG is a legitimate grassroots organization no corporate donors.
http://uspirgedfund.org/reports/usf/picking-tab
@tim. I suspect that ACA has been trying to find out who supports FATCA and who might be amenable to withdrawing support. Remember that it passed as an add-on to the HIRE Act which passed with an overwhelming majority vote. FATCA was tacked on at the last minute and was part of the HIRE package so it was not voted on separately.
Hopefully we will be getting some solid feedback shortly from the ACA AARO folks who are about now just returning from Washingto.n
I know one of the more prominent co-sponsors was Massachusetts Senator John Kerry. I have come very close to calling for all anti FBAR anti FATCA activities to be directed solely towards him. However, I also suspect given his background he might be someone friendly to ACA so I have held off until I hear more from ACA. I was actually thinking of an anti FATCA spinoff site from IBS that would be directed specifically at Kerry. This is along the lines of what social conservatives historically did in the US where they targetted all the resources at defeating a single member of Congress they opposed thus sending a message to other members they might be next. My sense is Kerry is more vunerable in Massachusetts on the issue that someone like Grassley would be in Iowa. There are also some unique ways Canada could make Kerry’s constituents in Massachusetts miserable something my possible future blog would go into.
@Ben Franklin.
The only reason to burn LCUs on the progressives, is for Citizenship taxation to change, it will have to be a bi-partisan effort. There is probably a big portion of the very Conservative Republicans that think that US Citizens living abroad are unpatriotic and think they should give up their citizenship or come home. So, if this nut is ever to be cracked, we need broad base support, in my opinion.
@Tim…
Well, I understood that the Biggest mover and shaker on FATCA was Senator Carl Levin. I constantly target him on many of the twitter messages I send out. Thanks for the link to that group that is against Corporate Loopholes. They might be one to target too. Think I will read about who they are and what they think they are trying to do. Obviously want to balance the Corporate “buy your rate” lobbying in Congress. BTW, did you ever get a chance to listen to that Planet Money podcast called “Take the Money and run for Congress?
http://isaacbrocksociety.com/2012/04/03/take-the-money-and-run-for-office/
It didn’t get much discussion so figure not many had the time to listen to it, but it is sure telling about how the money game works in DC. You know it has power, but a lot of it is still gobsmacking.
@JustMe
I am probably going to send US PIRG the FATCA statements from MP Jean Crowder and MP Denise Savoie along with the letter to Jim Flaherty from the entire British Colombia NDP Caucus.
I agree Carl Levin is a major player but I don’t believe he is the final decisionmaker on this issue. That is why I continue to look at Senator John Kerry(who was a co-sponsor of FATCA) out of the corner of my eye. I believe Carl Levin is too personally entrenched in his support of FATCA to be persuaded otherwise you need some like Kerry that pressure can be applied to.
A visit to Congressman Tierney’s web site helps to show that he doesn’t know much about the American working middle class abroad. On the contact section of his web page, he expects that all Americans live in America or have a US-based address:
https://forms.house.gov/tierney/webform/issue_subscribe.htm
Another possibility is that he figures that Americans abroad won’t bother contacting him due to his extreme position.
@Daniel Kuettel, with respect to not being able to contact Congressman Tierney by email using his website, this is common to all US senators and congressmen. Not one of them has a website that allows a voting consitituent who lives outside of the US has a contact format that will allow such persons to contact them. As a matter of fact, most congressmen block the sending of emails via their websites from anyone who does not reside in the state which they represent.
This just reflects the universal disdain that legislators in Washington have for each and every one of their “tratorous” US citizen-constituents who has the unmittigated gall to actually reside outside of the United States. The message is “don’t waste my time. I have absolutely no interest in you, your opinions or your problems if you call yourself an American but don’t live in the good old USA.
@danielkuettel- he isn’t the only one. Jessie Jackson Jr.’s website was structured the same way the last time that I was on it. I’ve also encountered other Congressional sites that had similar limitations.
The fact is that the Constitution of the U.S. doesn’t apply outside of U.S. borders so I don’t believe that these Congress men and women really can acknowledge expat residents as legitimate constituents unless they have a U.S. residence.
All of this just goes to underscore the point that expats have no representation at the federal level. Not even if they try to go through D.C. I understand that D.C. does not respond to outside addresses either even though expats are made forcible residents of the District.
I thought very briefly about contacting Casey, who is from my home state of Pennsylvania. I quickly discarded the idea because that could serve to defeat my strongly-held position that I have not been a US citizen since relinquishing 40 years ago–even though I don’t have a CLN to prove it.
Time would be better spent contacting your Canadian MP!
@Joe: That has proven to be a total waste of time and energy. My Conservative MP hasn’t acknowledged my e-mails and letters. Well, except after Don Davies, Foreign Affairs critic, (whose riding is 3,000 miles from me) called me personally. Then my own MP sent me a fact sheet about FBAR with no mention of FATCA.
I have also had no acknowledgment or reply from Minister of Citizenship and Immigration and Minister of Foreign Affairs.
As I posted on another thread, since his form letter to me several months ago, Flaherty has also not acknowledged or responded to three e-mails I have sincee sent asking him to advise Canadian banks they must adhere to Canadian law and assure Canadians that Canadian laws will not be changed to accommodate a foreign government.
Responses from Canadian Bankers Association also leave a lot to be desired.
Try Thomas Mulcair
@Joe: I could do that. I didn’t include him in my original correspondence because the NDP didn’t have a permanent leader then. I have been happy with the responses from Don Davies and the actions of Hoang Mai, NDP Revenue Critic.
However, it seems they all have been silent for a while now. Very concerning.
RE contacting congressmen: I’m not even an American and I easily contacted Dennis Kucinich by e-mail. He even provides an alternative snail mail address because congressional mail is slow. It has to go through bomb/anthrax screening first. I’m going to miss Dennis Kucinich in the House of Representatives and I hope he finds a good outlet for his words after his term is finished.
@Em, Dennis must be the only exception. None of the rest that have tried to contact on-line have any provisons for entering a non-address on their Emial-wesbsite address format. Dennis got de-elected as a result of the last census becuase the populaiton of Ohio dropped and his Congressional district was consolidated with another distrct, and I believe he lost the primary election. Dennis is one I never tried to contact.
@ Roger
Yes I know about the redistricting disgrace. I have seen the boundaries of districts which boggle the mind. What a puzzling political “system” the USA has. I will never understand the primaries and the electoral college either.
@Em: A ten year old Canadian girl said to me four years ago: “You mean all these elections are about who is going to be in the real election?” I replied “Yes.”
All the adult Canadians in the room looked at the 10 year old and me with dismay.. Trying to explain the Electoral College the year of Bush, Gore and the Florida Hanging Chads was impossible. (But then, I think it was impossible for most Americans to understand, either.)
Of course, in Canada, we have our own Robo-Calls election to deal with!.
Good enough to tax though!
@ Blaze
Wow, from the mouths of babes. 🙂 I understand political dirty tricks (I see ghosts … voting). It’s just the legal and complex political process which is confusing. I don’t condone dirty tricks BTW, I can just figure them out is all.
@Everyone
You might want to check out and comment on the following article.
http://www.thewhig.com/2012/05/24/the-value-of-quiet-diplomacy
Thanks Tim. I did say to another Brocker over the weekend that quiet negotiations may very well be going on behind the scenes. But, at the same time, Canadians need reassurance of our government that: 1. Canadian banks are expected to adhere to Canadian laws and 2. Canadian laws will not be changed to accommodate demands of a foreign government.
In terms of quiet diplomacy, nothing about Volcker, IRS or FATCA has been either quiet or diplomatic. Instead, US has been loud, strong, demanding, intimidating and threatening. I’m glad Flaherty wasn’t quiet initially. I just wish he would get noisier again.
I’m tired of being told Canadians should be calm, quiet and polite when we are dealing with obnoxious bullies. (and to think I was encouraging others earlier today not to resort to name-calling!).
In a positive light, such things only reaffirm my commitment to relinquish.
With nothing but raw commodities to export (which requires no expats), the trade deficit will be corrected as foreigners will stop lending money to the US. That means, more opportunity to milk expats (if they are still around).