The deadline has now passed to submit comments to the Ways and Means Committee on Tax Reform. Comments are posted here. There were (and hopefully continue to be) a large number of letters from U.S. citizens abroad. Who knows what will happen? I am hopeful that Shadow Raider’s optimism will “carry the day”. For those who missed his comment:
Shadow Raider says
@Just Me, You can keep your hopes up. The reporters who wrote that article on The Hill probably contacted both chairmen of the international tax reform working group, Devin Nunes and Earl Blumenauer, and I suspect that the Republican aide who responded is the same Devin Nunes’s assistant whom I met last year. Yes, he defends citizenship-based taxation, but he is the only aide that I met who does. His opinion is not representative of what Congress thinks about the subject, so I think we can safely ignore his comments. All other aides that I met were supportive or at least open to changing the tax system to one based on residence.
Speaking of congressional aides, most of them are young, as you noticed (20-40 years old), highly educated, motivated and friendly. Also, most of them have traveled abroad, and they live in or around DC, which has a substantial international presence. Perhaps because of these characteristics, they are open-minded about the rest of the world and are interested in new ideas. A 150-year old policy that restricts international mobility is not something that they support. I think citizenship-based taxation is not going to survive much longer.
Also, Earl Blumenauer responded himself to the article on The Hill, and his response seems positive. I think I finally found the point that makes Congress care about the subject: thecompetitiveness of Americans for jobs abroad. When Bill Alexander proposed expanding the FEIE to all kinds of foreign income in 1992, he titled his bill “Overseas American EconomicCompetition Enhancement Act”. When Jim DeMint and Gregory Meeks proposed making the FEIE unlimited in 2007, they titled their bill “Working American Competitiveness Act”. Earlier this year, Dave Camp wrote that tax reform is needed to make US workers more competitiveinternationally. Now Earl Blumenauer mentioned something similar. The Senate Finance Committee scheduled a meeting on “international competitiveness” for next month, and I don’t think they are just talking about corporations. So congressmen don’t care much about logic, simplicity or fairness in the tax code, banking problems, exports or additional tax revenue, but they don’t want Americans to be undesired for jobs outside of the US simply due to their citizenship. In the past, this problem could be mostly solved with the FEIE, but today, with FATCA and the enforcement of FBAR penalties, even excluding all foreign income wouldn’t be enough. For Americans and foreigners to be considered equally for jobs abroad, Americans abroad can’t have tax or financial reporting requirements to the US either.
The Joint Committee on Taxation should say something about the subject in its report on May 6, and the Senate Finance Committee should also say something after its meeting on May 23. I think we’re in for a pleasant surprise.
Here are some comments that really captured the life of “U.S. citizenship abroad”.
Somebody trying to live an “every day life” in Canada
I suspect that #americansabroad in Canada can relate to this waysandmeans.house.gov/uploadedfiles/… – Accurate portrayal of the burdens of US citizenship
— U.S. Citizen Abroad (@USCitizenAbroad) April 17, 2013
This is an excellent submission from a U.S. citizen in Canada who is nowhere near retirement and is faced with the prospect of trying to live and build a life. What is particularly interesting in this one is that she suggests that many U.S. citizens abroad are afraid to write because they are not compliant.
And from a person at a similar stage of life in Switzerland
Excellent description of how “US citizenship abroad” is a punishment and why #americansabroad must renounce waysandmeans.house.gov/uploadedfiles/…
— U.S. Citizen Abroad (@USCitizenAbroad) April 17, 2013
The complete community of U.S. citizens abroad owes a great debt to those who are writing to the Ways and Means Committee.
Not all letters have been posted! (at least yet)
For those who have not been following this discussion, comments on this blog reveal that at least three people have written letters that have not been posted. Hopefully they will show up. But I am beginning to wonder (some were clearly written before some that have been posted). Perhaps those who wrote and find that your letters were NOT posted should post them here.
In any case, many helpful letters have been posted.
@USCitizens Abroad, this is the objective of HR 597 introduced by Congresswoman Carolyn Maloney. Here is the link on the ACA website:
http://americansabroad.org/issues/representation/supporting-hr597/
This addresses precisely this subject on how Americans living abroad are treated.
What we need to do is to contact our US Senators and Congressman and solicit their support and sponsorship of this bill.. I have not yet done this but this is a wakeup call.for me to do my part as well. How to do it is available by clicking on the above link.
Call it what you wish, but the reality is that “citizenship-based taxation” deprives long-term ex-pats from experiencing the “life, liberty and the pursuit of happiness” that homelanders get to enjoy.
“Citizenship-based taxation” and all the baggage that comes with enforcing it (additional complicated forms, heavy fines & penalties, double taxation, discrimination etc) is the root cause of misery for American ex-pats and the reason so many make the painful decision of renouncing or relinquishing US citizenship.
So why try to camouflage the reality?
How about calling it “citizenship-based misery?”
Just be open, honest and straight to the point. It is:
“The Great American Fuckup”.
It contradicts everything that America stands for and was made or meant to be.
@SwissPinoy
The dirty little secret that’s now being told. No more conspiracy of silence on both sides.
Even though I will be thrilled if citizen based taxation is ended, my heart goes out to all those who had to renounce. How many would be asking themselves “If only I had waited?” Then anger sets in knowing that a country did this to their citizens.
@Small, taxation is just one of many problems and those who renounced generally do not need to live or work in the US. I also don’t need to spend my retirement Euros in America if Americans don’t want me to. How about if the US government apologized and offered to undo the damage caused with representation for expats, a multi-party political system, a small federal government, a more balanced foreign policy and reimbursements? I can’t picture myself as being a US citizen labelled as being a traitor for renouncing to flee banking discrimination caused by US policy.
Rep. Brady Sees Chance to Agree on Shift to Territorial Tax
Monday, April 22, 2013
Settling the debate over shifting from a worldwide to a territorial tax system could be closer than it appears, according to Rep. Kevin Brady (R-Texas), and observers suggest could bode well for broader corporate tax reform. Brady and other congressional Republicans want more of a territorial tax system for U.S.-based multinational companies, which would tax their profits where they are earned instead of taxing their worldwide earnings. In contrast, the White House and some congressional Democrats want to maintain the current variation on worldwide taxation, in which multinationals owe U.S. taxes on domestic and foreign income, with some exceptions.
http://www.bna.com/rep-brady-sees-n17179873497/
If citizenship taxation were to be replaced with residence based taxation, then there should also be parallel legislation which would rescind the prohibition against recuperating US citizenship for those who were forced by citizenship-based taxation to renounce in order to survive.
But let us cross one bridge at a time. Everything depends on the abolition of the evil of citizenship based taxation.
By the way, corporate profits of US muntinationals ARE already taxed where they are earned. But with the US worldwide tax policy they are also taxed the second time when they are repatriated. The US tax is the difference between the foreign tax paid and what the US tax would be on the total earnings. Why would any company, starting from scratch, want to make the US its place of incorporation and where it produces products for export given this double tax policy? The answer is they would not. No corporation looking to expand looks for the country with the highest taxes when deciding where in the world to establish its corporate headquarters and manufacturing operations
It is for this exact same reason that companies addressing primarily the domestic US market locate in low tax states like Texas and Florida rather that high tax states like California and New York..
Well my daughter has decided not to wait for the tax law to be changed,she is renouncing next month. Anyway she has no plans to live in the U.S. as she has health problems.
Good luck to everyone in this battle.
Good for your daughter in researching all of this, with Mom’s help. The best of luck to her, Small. Let us know how her renunciation goes (in Toronto?).
@calgary 411. She renounces June 24. She couldn’t wait until Congress changes the tax law. Simple tax filing would cost her $400 per year as charged by H&R block. Will certainly let everyone know how it went.
Please add the following post as a new thread:
The Ways and Means and Senate Finance Committees have just launched the website TaxReform.gov, and are asking for the general public to submit comments on tax reform again. This time, they even said that they want “horror stories”, and many Americans abroad and immigrants have such stories to tell. The form on the website asks for a US address, but I suppose you could use your voting address (or perhaps try to input a foreign address using one of the obsolete postal abbreviations at the end of the list).
Thanks for the information, Shadow Raider. I don’t think I’m the one who should post this, but OK I will. I would love to give comments, but it would have to be with my “calgary411” name. I presume they would want our REAL names and information.
An update to @Shaddow Raiders comments, I am posting in the comment threads of 3 posts…
The JCT team of Baucus and Camp are asking for input from DNA persons, not just Corporations or paper persons…
Camp, Baucus launch new tax reform website
The two top tax-writers in Congress have taken the next steps in their all-out drive for tax reform — a new website and Twitter handle.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) say the new site, taxreform.gov, and Twitter handle, @simplertaxes, would give the average taxpayer input into the tax reform process.
The two chairmen, “Max and Dave” on Twitter, cast their new effort as the modern-day equivalent of former Rep. Dan Rostenkowski’s request that people send him letters — “Write Rosty” — about their own problems with the tax code more than a quarter-century ago.
Rostenkowski (D-Ill.) was House Ways and Means chairman for the last successful overhaul of the tax code, in 1986, and Camp and Baucus suggested their efforts would help give regular citizens — and not just lobbyists and corporations — access to tax writers.
Read more: http://thehill.com/blogs/on-the-money/domestic-taxes/298707-camp-baucus-launch-new-tax-reform-website#ixzz2TDKGxCNH
Follow at @thehill on Twitter |
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Read submissions put to the Senates International Tax Reform Working Group
http://waysandmeans.house.gov/taxreform/workinggroups.htm
JakDac, the link leads to the 2013 submissions. I can’t find the 2015 ones, can you?
Jak Dak,
Those are submissions to the Ways and Means Committee, 2013, and should not be confused with the current submissions. The Senate Finance Committee is what the current submissions have gone to. Hopefully, the SFC submissions will eventually be published on the Senate Finance Committee site. Also, hopefully, they have taken all of the previous 2013 submissions to the Ways and Means Committee into account — there are many excellent submissions there that go beyond the *form letter* format that many followed and that are very relevant for what the Senate Finance Committee takes into consideration.