@RepDaveCamp to release draft to @FixOurTaxCode Feb. 26. Will it include a switch from CBT to RBT? http://t.co/CG3PnREEZu
— U.S. Citizen Abroad (@USCitizenAbroad) February 26, 2014
Thanks to @ShadowRaider for providing this update.
Here is the text of the bulletin.
Every year Americans spend more than six billion hours and $168 billion to file their returns.
There have been so many changes to the tax code over the past decade that it is now 10 times the size of the Bible, but with none of the Good News. That factual statement usually gets a good laugh back home in Michigan. What isn’t funny is the effect that constant tinkering with taxes has had on the people who pay them, and on the economy.
According to Nina Olsen, the National Taxpayer Advocate at the IRS, Americans overall spend over six billion hours and $168 billion every year to file their returns. This is stark testimony to the complexity of the tax code. Meanwhile, owners of small businesses face tax rates as high as 44.6%, while the total (state and federal) U.S. corporate rate, 39.1%, is the highest in the industrialized world.The last time the U.S. enacted a comprehensive tax reform was 1986. But many of America’s major competitors have been actively reforming their tax laws in recent years. Even our closest neighbors are getting ahead of us. Canada has already reformed its tax laws and Mexico is doing so right now. If Congress doesn’t take action, the U.S. risks falling further behind.
The tax code should make it easier for American companies to bring back profits earned overseas so they can be invested here. It should not hinder small businesses from growing into large businesses. And the individual income tax needs to be simpler, fairer and flatter for everyone.
On Wednesday, I am releasing what a simpler, fairer tax code actually looks like. The guiding principle is that everyone should play by the same rules—your tax rate should be determined by what’s fair, not by who you know in Washington. Here is what it would look like:
First, the tax code will be made simpler—so every family can do its own taxes confidently, without fearing an audit, or wondering if someone else who can afford an expensive accountant is getting a better deal.
Today there are 15 different tax breaks for education—nine for current expenses, two for past expenses and four for future expenses. The IRS instructions explaining it all come to almost 90 pages. That isn’t a tax code designed for working families; it is a tax code designed to make money for accountants.
Last year, my Democratic counterpart on the Ways and Means Committee, Sandy Levin of Michigan, and I created 11 bipartisan working groups to tackle different parts of the tax code. One of those, headed by Diane Black (R., Tenn.) and Danny Davis (D., Ill.), looked into those education provisions. After months of work, the leaders of the working group recently came forward with a plan that consolidates four of these provisions into one improved credit, making it easier for families and students to afford a college education.
Paired with more commonsense reforms like increasing the standard deduction and the child tax credit will mean that nearly 95% of the country can get the lowest possible tax rate by just filing the basic IRS 1040A form—no more itemizing, no more keeping track of all those receipts, and no more filling out all those extra schedules, forms and work sheets.
Second, the tax code will be made more effective and efficient by getting rid of special-interest handouts, which will mean lower tax rates for individuals, families and all businesses. Under this plan, over 99% of tax filers will face a top tax rate of 25%—allowing small and large businesses alike to expand operations, hire new workers and increase benefits and take home pay. On the individual side, there will be an introductory bracket of 10%.
Nonpartisan, independent economists at the congressional Joint Committee on Taxation have already analyzed this plan. According to those estimates, after this streamlining of the tax code, the size of the economy will increase by $3.4 trillion over the next decade, or roughly 20% compared with today. This will lead to nearly two million new jobs—and producing up to $700 billion in additional federal revenues that can be used to lower taxes even further or reduce the debt.
What does this mean for you and your family? Because we will have a healthier economy, wages will rise. With more income but lower tax rates, families with a median income ($51,000 for a family of four) will have on average an extra $1,300 in their pocket at the end of the year.
Third, make the tax code fairer and more accountable. That means no more hidden provisions that benefit a favored few, and no more tax increases to fuel more spending.
We can clean up provisions like “carried interest” that allow certain private-equity firms to get the investment-income tax rate on what anyone else would call normal wage income. We’ll also put an end to special depreciation benefits related to corporate jets and close, once and for all, the infamous “John Edwards” loophole that allows a select few to avoid employment taxes on their income. The revenue gained from that provision, and many others like shifting to Roth-style retirement accounts for those contributing more than $8,750 (only 5% of the workforce) can be used to lower tax rates across the board.
The tax code changes in my plan are not intended as a means of raising revenue. If loopholes are closed, Americans should get the benefit by way of lower rates.
Tax reform needs to be about strengthening the economy and making the code simpler and fairer. That’s what Republican President Ronald Reagan did when he worked with Democrats in Congress in 1986. We need to get to work and repeat that success.
Shadow Raider,
We’re all in this together. You have done so much in trying to right all of this — so friggin’ much of your life for all of us! You are right that we ALL have to make our best decisions to be able to live abroad and that will involve expatriation if we are to get on with our lives.
Really, I mean it, thank you for all you have done! We have the homelander message loud and clear!
@Tim: “this is actually the first time I have seen what Robert B. Stack looks like from the video feed.”
Back when Robert Stack was setting up tax shelters as a tax partner at a law firm, he looked like this:
http://www.lawyer.com/robert-stack.html
I wonder how many tens or hundreds of millions of dollars Robert Stack helped his clients to avoid (or evade) through this tax shelters.
@Tim, Section 877 hasn’t been in effect since 2008. The repeal of that section is nothing but a technical simplification. The bill maintains section 877A, the current expatriation tax.
Let’s flood the finance committee with comments. After all, maybe that’s not a bad thing that they changed the staff. We need some fresh minds, since the previous ones weren’t listening.
Shadow Raider:
Section 877 actually is STILL in effect for those who renounced pre 2008. There is still a section on Form 8854 for old Section 877 compliance. Pre 2008 expatriates are still covered under the old 10 year rule.
Shadow Raider, boy do I know the feeling. Thanks so much for all you’ve done. I think I accepted a while ago they weren’t going to listen when Mr. Stack kept coming out with more and more negativity despite everything he was being told. On top of that look at all they have done to bend over backwards there for corporations and not one mention of us at all.
I agree that the only thing that will bring out the issue to the forefront is when those renunciation numbers climb so high they cannot be ignored. We already know they are much higher than what is published.
Sorry you feel so let down today. I’ve felt betrayed and resentful for some months now and have no clue when that is going to go away. However, yes there is a time to move on with your life…I’m not ready yet as I think some of this can be fought in Canada and other nations too. Something is rotten here. I’d like to know when, where and how we were discussed in these negotiations. I’d like to see paperwork without the redaction. I am willing to bet renunciation was mentioned in some of them.
@Shadow Raider and all who worked on this:
Brutal disappointment. I’m so sorry. It seems we count for nothing to them.
You gave them every chance to be wise, and they were not. I fear history will judge them harshly.
Please know that your incredible efforts are greatly valued. You may not have changed the powers-that-be yet, but your efforts have meant a great deal to many minnows. Thank you so much.
Just an aside: Last night a tiny pinprick of light in the darkness – on BBC world service, a brief mention by an interviewee that people now don’t want US passports…. unfortunately rather brusquely cutoff by the interviewer who said something like “Oh yes because of double taxation,” and quickly changed the topic. Still it was said out loud….
@ Shadow raider. I share your sadness and frustration at the wilful neglect of Americans abroad in this legislative proposal…. the main defense we have is the defense of the weak: renounce, relinquish, get the heck out of Dodge….
We have another and more insidious defense…… Whilst buying a paper the other day , I told my newsagent here in London the other day about CBT and US Govt enforcement effrots and she and a customer had their jaws hanging open. my newsagent said her son (IT /Finance professional) had been thinking about applying for a Green Card but she would now seek to dissuade him after hearing my story. we can vote withour feet but also vote with our mouths: tell our stories and make everyone aware of the CBT/FATCA/FBAR/3520/8938/3520a monster.
remember with pride that we are true to the American ideal: we have given up our birthright (American citizenship) in defense of our liberty and our families’ economic survival. our stories, blogs , posts, and actions are giving face, presence and voice for all USPs trapped in taxation twlight zone.
to paraphrase Martin Niemoller……….
“venerunt ad me, et locutus est mihi, quis est ita dixisse……Isaac Brock loquitur omnium nostrum”
and to “steal from Alcuin” (8th Century Adviser to Charlemagne)
“Vox populi, vox dei….tumultuositas vulgi…..Quam gravibus autem significat tributa….”
and a more recent Roman reference
“our names are legion…., commanders of our own fate,, loyal servants to the true ideals of the founding fathers ….., mothers and Fathers to threatened children, husbands and wives to threatened spouses . and we will have our justice, in this life or the next.”
paradoxically I love America more than ever…… family, friends, colleagues.. I wear my accent and heritage with great gratitude for the can do culture, the sheer infectious joy of the big country and the enriching experiences of the 10 years of my life spent growing up and going to school in Maryland and Virginia.
@Tim, You’re right, section 877 will only be totally irrelevant in 2018, so repealing it would indeed help those still subject to it. But I think that the number of people affected would be extremely small, if not zero. I can’t understand why they decided to fix just this specific provision and leave everything else as it is.
@calgary411, @atticusincanada, @Sad-in-the-UK, @crystal london, Thank you. I think I overreacted in my previous post. I don’t want to give up completely, but right now I’m just tired of this whole thing and I need a break.
@ shadow raider….rest ye gentle on well deserved break and downtime …… Brockers will need your passion and integrity globally going forward…. it’s kind of humbling to realise we are writing history here.. the history of the demise of CBT. I am enriched by mere associate with you-all.!
@Shadow Raider:
” I finally accept the situation that most Americans abroad will have to renounce or relinquish US citizenship (and that many immigrants will have to abandon their green cards), as many of you already did. At least the US allows that, unlike Eritrea. If the numbers keep increasing, maybe Congress might change their minds,”
Thank you so much for all your efforts! You have gone far beyond the call of duty for your expat brethren.
But the US is just plain bent on punishing anyone with the audacity to leave the homeland. Its part of the politics of envy (Carl Levin) and psychology of American Exceptionalism / Jingoism (John McCain).
It is time for a MASS RENUNCIATION MOVEMENT (one renunciation at a time). Its the only thing short of self-immolations that can bring a halt to the escalating WAR ON EXPATS.
Every individual renunciation is another finger poked in the eye of the tyrant.
Every individual renunciation is another embarrassment for the party in power.
Every individual renunciation is another expat freed from US slavemanship.
@Samuel Adams
maybe if and when “12 Years a Slave” wins an Oscar…I have a fantasy that they will mention “freedom from American tax slavery” in the speech???????
Mind you, @Samual, with their present mindset, they’ll probably raise the bar and make it much harder to renounce.
@Shadowraider, what a shame though I’m not surprised! You must feel utterly exhausted and embittered after such an extensive effort!! All I can think is of how relieved I am to have renounced and a CLN. I realize now that I made the right decision in my situation.
I still share Crystal London’s bittersweet affection for America itself but realise now that Congress is effectively a private club looking out for the big corporations and that we mere minions simply don’t matter to them…suave que peut.
@Shadow Raider
Thank-you for your generosity. I am sincerely grateful for all your efforts.
This issue is getting some notice: it made it into The Week (U.S. edition), a magazine provides the TOP stories in a compressed format. The Week noted ‘Three thousand Americans turned in their passports last year, most of them expats renouncing their citizenship to avoid complicated tax filings.’ It encouraged me that U.S. persons abroad were being seen as overburdened by filings. Maybe all those below the line comments and small actions are starting to add up.
Renunciation is definitely the right thing for lots of people, particularly those living U.S. persons with no voting rights in any state. There is no chance Congress will act for someone like that . The problem with renunciation is that the federal government seems to be intent on massaging the numbers. For years, the U.S. government has said that the tax law couldn’t be too bad because people weren’t renouncing, but when people do renounce, they provide inaccurate figures. In the Iraq War, journalist accounts were pulled together to get around spin, but without getting reporters to verify the numbers at these events, it will be hard to counter the spin…
I am skeptical about any efforts to decrease domestic tax simply because there is a history of governments raising tax on overseas Americans two years either side of a major tax reform (Kennedy, Reagan, G.W. Bush tax cuts are major examples). Domestic tax cuts stimulate the U.S. economy, whereas taxes on overseas Americans mainly affect things overseas, but they help pay for the domestic tax cuts..
@Shadow Raider
A friend of mine sent me this “Slavery and the Eight Veils” by Don Harkins
I imagine you to have pierced the seventh veil
“The seventh veil: I do not know what is behind the seventh veil. I think it is where your soul is evolved to the point you can exist on earth and be the man Ghandi was, or the woman Peace Pilgrim was- people so enlightened they brighten the world around them no matter what.”
http://www.whale.to/b/sl.html
@shadowraider
“my Democratic counterpart on the Ways and Means Committee, Sandy Levin of Michigan, and I created ”
uh huh! same ol same ol BS
To justify his job Dave or someone pays lip service to reform, nothing new. The IRS-S Gestapo calls the shots. It seems lately everyone is calling for changes in the IRS but the industry is so big that anyone who really pushes too hard for reform will find themselves in their car trunk with a grenade in their mouth. Nothing is every going to change in the US….ever! The onus is on the rest of the world to recognize a National Socialist Party resurrection and hack it to death, literally and electronically. But of course when you have leaders like Flaherty who is on drugs and Harper who was seen coming out of a Toronto cheeseburger munching and beer swilling jam session you don’t get your hopes up.
To those who are disappointed we must remember that the Nazis rid their country of all of the intelligent productive members of their society and let the brainless thugs run wild. Today 95% of residents in the US are drug affected brainless thugs who are ripe for enlisting for the purpose of murdering everyone else. Lest we forget this, in fact never forget this most disgusting of videos. Make sure to watch the whole video
http://www.youtube.com/watch?v=cdPSqL9_mfM&bpctr=1393465880
Obama youth must be crushed as were the Hitler youth in the end.
Another must watch video to dispel unrealistic hope of changing this evil system from within. Stop asking, start fighting
“It is time for a MASS RENUNCIATION MOVEMENT (one renunciation at a time). Its the only thing short of self-immolations that can bring a halt to the escalating WAR ON EXPATS. ”
Maybe hundreds should gather at the Embassy in Ottawa on July 4th and burn their US passports so the rest of the nation can see and maybe rethink their intentions to get a green card or move to the USA. An event like that would garner worldwide attention. If they use the media to misinform the public then we should fight fire with fire and embarrass America. It’s war people.
@ChearsBigEars,
Congratulations, you’ve just lent credence to the 24-year-old Godwin’s Law! I’ve only experienced it twice before.
@whatAML
I reserve the right to make that analogy and don’t agree that it needs to end a discussion as Godwins law suggests inappropriate use of Nazi analogies in articles or speeches. This analogy is true in almost every case related to what we are going through. I take it you are a defender of America as a free country and see no correlation between the two?
If you are just trying make a point that bringing up the comparison is a discussion killer, well perhaps but it serves the greater purpose of shaking the heads of those who still believe that change comes from within and through the channels the system wants us to believe in. Until we stop believing that the USA is anything short of a fascist state we are simply fooling ourselves.
I might add that the analogy is made by many lawyers and others in high places in regards to our problem but by those who obviously don’t want their names used in association with what seems to be radical statements for the reason you just demonstrated. So bury your heads if that’s how you want to deal with this subject but I’ll continue because I have the right and obligation to raise the “Never Again” alarm as I am Jewish. Anyway I not looking for debating opponents over my statements rather want people to stop having faith in this corrupt system that wants to distract, deflect and divert us with spurious beliefs obtained by brainwashing. I think I have a legitimate part in the issue and people can just ignore it is they think it doesn’t apply. But if there was a poll the majority of us in this country would support it and have the same nagging doubts that I do. Anyway…….yadda yadda
Oh, BTW I am a marketing, advertising and sales person and know exactly how the heads of the NWO use propaganda from the minute we awake to when we go to sleep. Boy do I ever. My father was the international advertising and marketing President of a major international corporation in the US. I know how delusional and easily influenced people can be when something attacks their long held beliefs.
Have you ever seen The Matrix?
http://en.wikipedia.org/wiki/The_Matrix
http://www.imdb.com/title/tt0133093/
trailer
@AML
The reason the comparison is legitimate in this case is because the fascists hunted down people, stole from them, closed bank accounts and stole from them and lock boxes in the beginning, then they demanded that anyone hiding Jews or knowing where they are turn them over under threat of death for their complicity. Then after taking everything put them in prison, murdered them and honored the thugs that did this. So, sorry but the comparison of Obama youth and The Hitler youth in the video I posted is true in every sense. We are in great danger as long as we keep worrying about every compliance detail. FATCA IGA’s are not some mistake or misunderstanding by our government as we would like to believe. Japanese rounded up in Canada and put in concentration camps even if they were loyal to Canada and innocent of any wrongdoing happened. So….you don’t see the similarities?
This tax proposal is depressing in its blithe refusal to even touch on international taxation for individuals, but I can’t say I’m surprised, unfortunately.
So what about the Senate Finance Committee? Not that I’m hopeful, but since they actually solicited input on that exact subject…
@ChearsBigEars, I do see similarities unfortunately.