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.
@badger, this shows that US politicians support residency-based taxation when it involves themselves, but when it doesn’t involve themselves (living abroad), then they oppose it. This, again reveals the problems with taxation without representation.
The post from the ever wonderful Roger Conklin quoting Nero: “Throw them to the lions! They don’t deserve to live.”
reminds me of the comment of the Abbot of Citeaux at the massacre of Beziers in 1209 during the Albigension Crusade:
“kill them all-God will know his own”.
translation: throw everyone into the OVDI/OVDP IRS meat grinder and the innocent will not be hurt
The only sure and permanent solution to protect yourself is to renounce as quickly as you can consisent with your circumstances
Oh, there were other issues…
Remember, they said this reform was mostly about Corporate tax, or to quote Representative Earl Blumenauer of Oregon, the top Democrat on the international working group, said,
So remember…. Paper Persons trump DNA persons everything time!
Breaking News from the Financial Times…
Starbucks seeks fresh US tax breaks
Starbucks has launched a fightback in the US to protect and expand tax breaks on foreign profits – just months after its tax structure provoked a political backlash and public relations crisis in the UK.
In a letter to lawmakers on the House of Representatives’ ways and means committee – which is weighing a sweeping overhaul of the US tax system – the coffee shop chain said its global effective tax rate exceeded 32 per cent.
Starbucks also said it was willing to consider forgoing some US tax breaks, such as the domestic manufacturing deduction and accelerated depreciation on business investments, as long as the revenues could be used to lower the corporate tax rate down from its current level of 35 per cent.
But in addition, the coffee chain insisted Congress should continue allowing the deferral of US tax on foreign sales of coffee beans – which are protected by an “agricultural commodity exception” under US tax rules. It also asked that taxes on royalty revenues – which were at the centre of the UK tax furore last year – should also be deferred until the money is brought back to the US.
Chokes you up, doesn’t it?
I am so angry about what’s happened to this Patricia. in Canada. She won’t be the last either!!
We don’t count, only corporations and big-monied interests…I am convinced that expatriation is going to be the only realistic way an Expat will be able to lead a normal life abroad. We are being fobbed off.
@monalisa1776, if you, or anyone else ever has any doubts about the pressing need to renounce, Patricia’s story, and this latest attempt to tighten the noose http://isaacbrocksociety.ca/2013/04/24/oppose-h-r-1554-another-attempt-to-add-fatca-complexity-before-the-ink-is-dry-on-the-original/ should confirm the wisdom of your decision. It is basically a juggernaut gathering speed and mass, and while we can try to track developments, post them and oppose them, the only way to not be crushed, and savaged by the rapaciousness of the US is to cut the citizenship tie if/when we are able to.
If it was a simple matter of just saying ‘NO’ to US citizenship, I would. Unfortunately, after 50 years of not being a part of the system, and being fully entrenched financially in the country I live in and am a citizen of, to take the steps now to become ‘compliant’ will not only be costly from a financial perspective, but also in terms of LCU’s.
Not only that, but I AM ANGRY. I HATE BULLIES, as I have been subjected to them throughout my life, starting from Kindergarten where I got picked on for my red hair. It has not stopped since, and I am bloody sick of it. For example, I recently went through boot camp hell to become a registered health professional where the teachers were very abusive and power hungry only to get ‘let go’ from my first real job in the field to be replaced by a much younger woman (who is dating the boss) with nowhere near my work ethic or professionalism. I am tired of being abused all the time. Do I have a big ‘L’ on my forehead?
Rant over. Thanks IBS.
Re: my previous post, I guess what I am saying here, is that morally, I just CANNOT BEND OVER FOR USA.
I have a future inheritance from a parent who lives in USA, that if I really wanted to save, I probably should enter the Streamlined program and become compliant, but I DO NOT CARE. USA can keep it. I just want to be left alone.
@WhiteKat, I know that there are many who are not able/willing to renounce, and that it is simply not affordable, achievable or desirable given each individual’s specific circumstances. Even the Taxpayer Advocate has noted how difficult or impossible it has become to ‘comply’ from ‘abroad’.
Being angry is the only rational response to this injustice. You’re right, the US is bullying us: subjecting us to US-government-created-and-sanctioned extortion, confiscation, loss of our human rights, potential data theft, and threats to our mental, physical and financial well-being, and that of our families.
This has had life-altering repercussions for all of us, no matter which route we ‘choose’, or rather, have had chosen for us in many instances.
@Badger,
When I was in school recently, certain teachers took great pride in finding the ‘slightest’ inconsistency in paperwork to the point of ridiculousness, just so that they could give you an ‘incomplete’ on your work. There was no grade, it was either Complete (you passed) or Incomplete (you failed). One day, when I had my daughter as a client, I described something as ‘very’ in my goals, then in my assessment left out the word ‘very’. That one bauble resulted in an ‘Incomplete’ grade (i.e. a fail), even though everything else(and we are talking pages and pages) was perfect. The teacher who I swear must have been sociopathic lived to see the look on students faces (and the tears) when she would pull a trick like that – something she did daily
The reason I am describing this experience, is because it is so eerily similar to what I am experiencing now with FATCA and FBARS and citizenship based taxation, where one paper screwup can cost a fortune in IRS penalties when I DID NOTHING WRONG, and no matter WHAT I DO, I CAN DO NOTHING RIGHT.
@badger, @WhiteKat.
Just look at what patricia reported her physicians saying about a form of PTSD and other health issues related to this (as well as referring to financial rape and a history of Americans as bounty hunters) http://waysandmeans.house.gov/uploadedfiles/patricia_anderson_daddario.pdf
Section 1481 of title 8 of the United States Code:
“Right of Expatriation
Whereas the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness; and whereas in the recognition of this principle this Government has freely received emigrants from all nations, and invested them with the rights of citizenship; and whereas it is claimed that such American citizens, with their descendants, are subjects of foreign states, owing allegiance to the governments thereof; and whereas it is necessary to the maintenance of public peace that this claim of foreign allegiance should be promptly and finally disavowed: Therefore any declaration, instruction, opinion, order, or decision of any officer of the United States which denies, restricts, impairs, or questions the right of expatriation, is declared inconsistent with the fundamental principles of the Republic.”
@calgary, whitekat and shadow raider;
Do you think that the Taxpayer Advocate Nina Olson is reading submissions like Patricia’s?
@whitekat,
Any one of those situations you face would have been hard to bear, but the extraterritorial US taxation and citizenship burden imposes another needless and cruel layer of bullying on top of those we must deal with in our real ‘real’ life.
@ShadowRaider, is there any way of knowing whether we can copy and distribute (with proper attribution given) some of the Ways and Means submissions or excerpts, in order to illustrate to our contacts just how much real pain and suffering US citizenship is causing those who live outside the US? Any thoughts about this?
@Shadow Raider,
We can reach out and touch the hypocrisy. Does that mean that ‘accidental Americans’ born in another country, too, must promptly and finally disavow their other country citizenship, the country in which they were born or the country they lived (all but a few days or months) their lives?
@badger,
Could we submit it on her behalf, just in case? Would that be overstepping our bounds?
There is an interesting article on today’s on-line edition of The Hill, a publication reportedly directed at and read by Congress and their staff members on Capitol Hill in Washington. I have added my comment on the relationship between US citizenship-based taxation and the massive US trade deficit. Others may want to join in. I hope so. You don’t have to be a subscriber to either read this or post a comment.
Some other first-hand pain and suffering experiences could be very useful.
http://thehill.com/blogs/regwatch/business/296035-obama-forges-ahead-with-overhaul-of-export-controls
@badger:
Do you think that the Taxpayer Advocate Nina Olson is reading submissions like Patricia’s?
She’s been calling for tax reform ideas in her website since 2011, but this week she announced it on Twitter again. Maybe it has to do with the submissions to Ways and Means.
Is there any way of knowing whether we can copy and distribute (with proper attribution given) some of the Ways and Means submissions or excerpts, in order to illustrate to our contacts just how much real pain and suffering US citizenship is causing those who live outside the US? Any thoughts about this?
Regarding privacy, I don’t think that there is any problem because the submissions are already publicly available in the website, and the instructions said that they would become public. Regarding copyright, I don’t think that it applies because the submissions are just facts and opinions, not “intellectual property”. However, I’m not very sure about either aspect so maybe you can email Ways and Means and ask.
@calgary411, The text is referring to immigrants to the US and their descendants. I think that it is just mentioning them as an analogy: if the US wants its immigrants to become only US citizens, logically it has to allow its emigrants to become only citizens of another country.
I read Patricia’s submission and my response is that we don’t owe the US government jack doodley squat, nada, nil, nothing and it is American patriotic to be a renounced former American under these circumstances. America owes former Americans, Americans abroad, accidental Americans and green card holders a huge apology and until then, America is not worthy of any of us being citizens of that country.
@Shadow Raider & Calgary: US government officials made written statements as early as the 1870s showing that they understood that the Expatriation Act of 1868 (whence the original text about the Right of Expatriation) applied just as well to Americans losing their old citizenship to become foreigners as to foreigners losing their old citizenship to become Americans.
Ironically, the best book on this topic was written by an Indonesian Chinese immigrant to the US: I-Mien Tsiang. The question of expatriation in America prior to 1907. Johns Hopkins Press, 1942. Bits and pieces of it are summarised over on Wikipedia:
https://en.wikipedia.org/wiki/Expatriation_Act_of_1868
@calgary, I wasn’t certain if that would be okay. As Em pointed out, participants may not have known that their submissions would be made so widely publicized and mounted online. Perhaps an extract with credit given? Or just a summary?
Thanks @ShadowRaider. I didn’t want to inadvertently add to the victimization that some of the letter writers already suffered.
I do not believe that there is any summarizing of the submissions to the W&M website. They have posted directly on-line exactly what they received from those who have submitted comments. The only information deleted and not published is the submitter’s address, email address, phone number, etc. Only the submitter’s name is included with what is on-line.
The persons who post these are clerks who are not capable of deciding what should or not be posted.
Just to clarify, @Roger, I meant that perhaps it would be okay for us to summarize and quote extracts of the submissions in our correspondence with politicians. I was struggling with whether we could reproduce the submissions in their entirety to distribute, or whether we could summarize the most significant parts and quote the authors.
@Badger, Yes, certainly that would be in order. It is the pungent statements that are more likely to get their attention.
The principal barrier to overcome is getting the staff member who reads them to pass them on to the Congressman. They each must all get thousands of email messages every day – far beyond what any human being can even look at, let alone understand.
@badger, I think Em and you are right, maybe some people didn’t realize that the submissions would be public. I think it’s better not to include any names.