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.
They have been made public on the website, with Congress.
Referring the text to the link or to the last name to Another member of Congress can’t be a violation of anything.
@Eric, thanks for the information and highlighting “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.”
…and thanks, Shadow Raider, for unmuddling me. Not to give any suggestions, but next the US may be requiring those born in other countries to US parent(s) to get rid of their “tainted” other citizenship by birth even though that is where they live and pay their taxes, etc., etc.
Those who consider this file of extraterritorial submissions valuable should consider establishing a duplicate and separate archive. Good to include source of data capture and date of data capture. US government publications are not copyright. By extension, a named person who submits material to the US government seems to be agreeing to contribute to a US government publication and to foregoing that degree of privacy. This is the kind of data that can disappear overnight. Government whim and opacity are notorious. The nature of an interface to information may mean that the material never gets archived by the Internet Archive because either disallowed or nonaccessible. The data structure on the Renunciation Guide is fairly simple and hard-linked, so that resource did get archived. Enthusiasts may wish to convene a Brock Archiving Team Solution (BATS).
@usxcanada,
Re: The Ways and Means Committee submissions and “This is the kind of data that can disappear overnight.” Excellent point. Thanks.
I think there is a valuable resource in the Ways & Means testaments and this is exactly the stuff journalists can get their teeth into when preparing an article. I’ve saved all (or an attempt at all) of the pdf documents for international submissions to Ways & Means. I’m working on a dying computer but I’ve backed up everything to other storage places. They won’t be able to “disappear” these reports because I’m certain I’m not the only one who has done this — ACA for instance.
I wonder if/when a compilation is done of snippets from the submissions it would be a good idea to simply say: FIRST NAME of WHATEVER COUNTRY wrote THIS. That would acknowledge authorship without blatantly revealing a person’s full name. Anyone who wished to read the full submission would then be able to find it relatively easy at the Ways & Means site.
Good work, Em. And, hopefully, ACA is doing just as you suggest. Good suggestion on “first name of whatever country” as the introduction to snippets.
I wonder if the W&M Committee witll ever take them down. They posted the comments I submitted for an earlier hearing in May 2011 and they are still available on the Internet.
These postged International Taxation comments reveal the name of the submitter, but unless the submission text itself includes reference to the country of residence of the submitter, that information is not posted. It had to be shown in the email forwarding the submition to the Committee, but not necessarily in the text. Where the submitter included his address,email, telephone or other personal information this information appears to have beem blacked out by the committee prior to being posted.
The submitter’s name was not blacked out. My guess, based on what happened with my submittal back in 2011f, is that with the submitter’s name and key words in the submittal text it may well be possible to do a Google search in the fuiture and locate these submissions..
Subsequent to writing these lines above I just did a Google search (as describled above) and my submittal for this initiative has indeed already been posted on the Internet by the committee. So I suspect the same is true of the submissions of others as well. I searched by typing in my name and the words replace citizenship based taxation. That brought it up immediately.
If it is posted on the Internet it is now publicaly available for everyone to see and read, including the name of the person who submitted it. All pretents of privacy are gone.
As an ACA member (since ACA was founded back in the late 1970s) I have been asked to prepare a brief summary with the submitters name for one block of these submissions, which I have done. Other ACA volunteers, working from the submittals on the W&M website are dong the same thing so that ACA can indeed post a summary of pertinent submissions on its website. It is “in the mill” so to speak. But it will take some time yet before this work is complete and the information can be made available on the ACA website.
ACA’s work, all done by volunteers, is indeed a valuable contribution toward this effort. Please allow me to suggest that if you have not done so already that you consider becoming a member of ACA. The annual cost of membership is very modest and you can join on-line and pay with a credit card or PayPal. If there was ever a time when the efforts of this organization were needed, it is right now. Please pardon the commercial but the help of all persons who want to see positive results come from this can help more than they may realize by joining.
Go to http://www.americansabroad.org an click on “join now.”
ACA is a non-profit organization
Adding to my prior post, information submitted to a Congressional Committee, such as the Ways and Means Committee, becomes part of the permanent public record.
good idea Em..
Roger… ACA doesn’t really have a credit card facility online, so I will have to mail my check as I don’t do Pay Pal. I am horrible at renewals, so will just do the lifetime and be done with it. 🙂 They can use the extra money now.
I thought about the lifetime membership too, but I don’t know how I’ll feel about it once I cease to be an American citizen abroad.
@ Roger
I can’t say what proportion of the submissions indicate in their text what country the writer comes from but a good many do. “Unknown” or “European Country” can always be used in lieu of an actual country name. I always find it helpful to know who and where when I’m trying to absorb reams of comments. It helps me get the picture and retain it longer. In the end it’s what is being said that is the most important but tags of who and where make things easier. I, for one, would not want my real name passed along the “internet tubes” to any great extent but you are right about the names being in the public domain now so I guess that makes them fair game … but sensitivity is still advised.
I see now, after the deadline, that many other issues are being posted. At first, I am depressed, but then I begin to wonder, did all the International’s write in early, or did we somehow receive preference in posting first?
@Mark Twain
Are they still continuing to post them? Mine took 2 1/2 weeks to post and it wasn’t posted until after the deadline had passed.
There are now 4 or 5 pages, and the percentage of Intl working Group is decreasing. I find it hard to Believe that all of the other organizations waited until the last day. Why were the internationals the quickest?
@Roger Conklin, there’s an article today in the news on Morsi’s kids:
@Mark Twain, because they are unimportant and don’t need to be read or studied. Thus, they could be quickly processed, discarded and forgotten. In a month, it will be as if nothing happened while they focus on the other issues.
@swisspinoy, will the US government comment publicly and decry this immoral attempt by a foreign government to strip two ‘US taxable persons’ of their birthright to owe the US forms and revenue from abroad? The article says the lawsuit is intended “to force his two children to renounce their US citizenship”, but of course we know it has to be certified as a voluntary act, and that external ‘force’ would invalidate it. Of course renunciation should also trigger the requirement for all the IRS paperwork – plus five back years of compliance under scrutiny. Will the US media pick up the story?
@badger, the Egyptian princes are likely considered to be members of the demorepublican royalty and thus they neither owe US taxes for their millions hidden away in Florida, nor would there be any problems if they renounced. You must understand that the upper class is not treated the same as us lowly mortals. 🙂
I am afraid that the US media will totally ignore this story. Just like common people they must humble themselves before a US consular official outside of the United States in order to renounce US citizenship. Until that is done they are still obligated to pay US taxes on their world-wide income and do so in US dollars, regardless of the currency of their cincome or the foreign exchange control laws that may exist in the country where their income is located. They must also submit FBAR and FATCA reports just like any other US citizen who has financial assets outside of the US. And the Egyptian banks and financial institutions where their assets are located are obligated to provide full details of these accounts of “US citizens residing abroad” or be subject to the penalties imposed on those banks under the provisons of Fatca.
Unfortunately the US media will doubtless ignore this fact of life as well. Does anone have any means for bringing this to the attention of the US media? Pedrhaps the State Department should be used to convey this obligation to the Morsi family just to be sure they are aware of it.
@Roger Conklin, there may be some exceptions to the general rule. The Arab Spring weakened America’s ability to bribe corrupt dictators in the middle east and thus it is likely holding onto Egypt with thin strings with its disliked foreign policy. So, giving Morsi’s kids trouble for not filing or so could result in the US losing the tiny amount of influence it may still have in Egypt. Thus, it is not unreasonable to assume that Morsi’s kids are excluded from US filing requirements and may be treated differently on various issues, such as renunciations. The US might be even bribing them with millions, and such concerns in Egypt explain the pressure for them to renounce. One could probably ask some muslim-haters to report on the matter, such as frontpagemagazine.com, debka.com, wnd.com, etc. They would likely love to accuse American Muslims of being tax-cheats.
If there are provisions in US tax law which exclude US citiens resident abroad who happen to be relatives of foreign potentatates from filing US tax returns and paying US taxes, I am not aware of them.
One way to exclude them would be to replace Citizenship-based taxation with Residence based taxation, which is what I personally favor. But as far as I know all US citizens, regardless of their DNA, 5that are currently related to a foreign head of state are tax-wise subject to the same laws as all other US citizens.
It was George Orwell in his 1950s book Animal Farm that stated that under communism all are equal; but some are more equal than others. If there is anything like this in the US tax code that anyone is aware of then hopefully someone knows about it will make the rest of us aware of it.
Just thought I would record the response I got from my Congressman regarding my submission to Ways and Means…
Dear Mr. Just Me,
Thank you for contacting me about tax reform. I appreciate hearing from you about this important issue.
I am glad to report that we agree that large-scale tax reform is necessary. I support comprehensive tax reform that simplifies and rationalizes the federal tax code. As we continue to negotiate deficit reduction measures, I believe new revenue must be part of the equation. I support closing corporate tax loopholes along with lowering the overall corporate tax rate as an important component of tax reform efforts. Please know that as the Ways and Means Committee continues to consider tax reform, I will keep your views on offshore income in mind.
Thank you again for contacting me. Please do not hesitate to contact me in the future regarding this, or any other issue of importance to you.
If you are interested in receiving periodic updates about my work in Congress, please sign up for my newsletter by clicking here. I also invite you to follow me on Facebook, Twitter and Google+.
Sincerely,
Rick Larsen
United States Representative
Washington State, 2nd District
http://nmtccoalition.org/2013/04/tentative-senate-tax-reform-schedule/
Over the next several months, the Senate Finance Committee will convene weekly to discuss a series of topics and collect feedback from members on a wide range of options for taking on tax reform. These meetings will be Member-only and are organized by policy area. Below is the tentative schedule (subject to change):
•April 11: Small business, corporate investment and innovation;
•April 18: Families, education and opportunity;
•April 25: Infrastructure, energy, and natural resources;
•May 9: Types of income, investment, and tax structures;
•May 16: Economic security, health, retirement, and insurance;
•May 23: International competitiveness;
@JustMe, congratulations for getting an acknowlegement from your Congressman. The phrase in his response reading “Please know that as the Ways and Means Committee continues to consider tax reform, I will keep your views on offshore income in mind,” is Washingtgonese for ancknowledging a letter on any subject indicating that the recipient could care less about what you have written. It means it is a subject on which supporting your convictions will not contribute to his winning the next election when it is again time for his reelection. No commitment.
I wish I had kept count of the number of letters I haved received from Washington using this exact same phrase.
@Roger… I know. I was going to put commentary to that effect, but thought I would let it speak for itself. 🙂