“Today the President laid out a very different vision, one where everyone—no matter who you are, where you’re from, or how big your bank account is—pitches in together to rebuild the foundations of our country and economy.”
Did you hear the President today?
While this sounds, in theory, to be a noble idea worthy of taking into consideration, it is, in practice, troubled with a number of significant hurdles which need to be overcome.
Around 6.2 million American citizens abroad already pitch in together to rebuild the foundations of the countries and economies where they reside outside of America, as explained in Taxation of Americans Abroad. Asking them to do the same for two countries and two economies puts a greater burden on them than any other group of people, with the exception of the totalitarian nation of Eritrea.
“Congress could amend the Tax Code to end the discriminatory practice of taxing U.S. citizens with a bona-fide residence abroad. However, this appears highly unlikely—U.S. citizens living abroad have essentially zero influence in Congress.”
100 Year Legacy of Expatriation Due to Taxes
In a totalitarian regime, citizens living abroad have essentially zero influence in Congress. America is likely not defined as being a totalitarian regime, and yet Americans abroad are told that they can’t vote when they attempt to register with their address or documents where they live. To register, they have to ask someone in the US if they can use their address for that purpose. For example, the Massachusetts Voter Registration Form Request requires a US address. The same applies to Americans abroad who attempt to get an id card or drivers license, as further explained in “Your are an Invalid Resident!”
“Approximately 6 to 7 percent of civilians living abroad voted in the 2008 election. There is evidence that a large portion of the population was not successful in its attempt to participate. The largest problem for Americans abroad is not having their ballot rejected, but ensuring that their ballot is returned on time.”
Overseas Vote Foundation
Even if they can register to vote, they are told that they can’t vote locally, or their vote doesn’t count. Americans abroad are further compensated with their lack of political representation with an up to 50% slash to their US Social Security benefits through the Windfall Elimination Provision. If they lose their employment abroad, they will be denied unemployment benefits in the US.
“The U.S. Government does not offer an unemployment insurance plan in which overseas Americans could voluntarily enroll to protect themselves upon their return to the United States.”
American Citizens Abroad
The idea of being together seems to stop at the border, such as with Medicare, or State Farm which writes:
“Each of the investment products and services referred to on the State Farm Mutual Funds web site is intended to be made available to customers or prospective customers residing in the United States. The customer’s U.S. permanent residence address must be a street address.”
Yet, it doesn’t end there. When Americans apply for some bank accounts abroad or even banking services in the States, they may be rejected or treated differently from other Americans.
“As a direct result of existing and newly proposed U.S. regulations, many U.S. and overseas banks have closed accounts held by U.S. citizens living outside of the U.S., and many banking institutions outside the U.S. now refuse to open any new accounts for Americans. Recently enacted legislation from the Treasury and Congress will only worsen this situation.”
Banking Services Denied to U.S. Citizens Abroad
Of course, there are other issues as well, such as Americans abroad being the target of terrorist attacks responding to US foreign policy. Americans abroad may also be denied residential tuition rates at US colleges. We can’t even sign up for an American Sweepstakes, get a credit report from AnnualCreditReport.com, buy an app from Barnes & Nobel, watch a video at Amazon or subscribe to Netflix. Yet, the most serious issue is the excessive government spending on that which does not “rebuild the foundations of our country and economy”:
“Uncle Sam is like the neighborhood wastrel who buys everyone a drink and cosigns everyone’s loans even though he is unemployed. When faced with bankruptcy, he immediately goes down to the bar and buys another round for the road.”
Solving The Debt Crisis: A Military Budget For A Republic
America does not need to be a super power. Rather, It needs to cut its spending to repay its debts to “rebuild the foundations of our country and economy”. A 50% slash on Social Security Benefits for all Americans rather than singling out Americans abroad, would qualify under the concept of “pitching in together” and cut spending by $407 billion. One could even work together more and stop Medicare within the US border too for all Americans, pitching in a few more billion.
Did you hear the President today? Sadly, I heard no mention of residency-based taxation or even representation for Americans abroad in the House and Senate. What I did hear appeared to be a collection of bipartisan chatter which stopped in relevance at the border. Maybe the President should hear Americans today for a change?
Cross posted from ExpatAmi