@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.
I am visiting the US now (business and pleasure) – and I have talked about FATCA, the severe problems CBT causes, and how I am sadly thinking about renouncing. No one (all educated savvy people) had heard of this issue. Moreover, on CNN today there was a major piece on how Credit Suisse had helped Americans hide money in Switzerland (secret elevators, customers smuggling cash out of the US) but NOT ONE word about US Persons abroad or distinguishing a US Person resident in the US having a secret account overseas and a US Expat living overseas and having accounts in the country where s/he lives. Really very very sad – and CNN should be ashamed for being so ignorant.
@Chearsbigears, I must admit that this angrier tone on here frightens me. I genuinely fear that Isaac Brock could become regarded as an extremist site/organisation; obviously in the current climate, the US govt might (with the help of the NSA ) try to track down those most involved here. I genuinely fear there could be reprisals though don’t know what form this could take; however, I could see the how they could use the IRS to target people the USG particularly doesn’t like…perhaps enforce the Reed Amendment, or harass some of us at the border when trying to visit.
Some of us still retain ties to the US such as myself; though I have sympathetic family over there, they don’t fully grasp how frightening I find things, of how devastated I feel; Unlike some here, I am still expected to make annual visits; they feel that it was unfortunate but ultimately my own choice to decide to leave the homeland so any problems I’ve had were from negligence on my part rather than that the Us fiction policies might be at fault.
What I’m trying to get across is that I no longer believe the US government is going to reform it’s tax system for Expats anytime soon in spite of all our efforts. We simply don’t matter to them. Instead, people affected by all this need to try their best to resolve their own situations but I no longer believe we can change the world. Perhaps Brock would serve people better by focussing on how to help individuals resolve their personal situations instead of all the anti-American bashing. Otherwise, I fear the USG could view Brock as a tax protestor or even eextremist terrorist site. I don’t people marking targets on their backs…
I listened to the whole hearing. How ignorant these senators are. They seems to be under the impression that most expats are compliant, and that the ones that are not are tax cheats.
I wish the banksters painted a more accurate picture: i.e most expats did not know that they were supposed to file taxes in the US and that the cost of becoming compliant is ruinous, and that they don’t have a choice but either to dump their citizenship or go home. I wished the banksters have explicitly said that the US’ action is resulting in the ethnic cleansing of Americans from Switzerland.
@ChearsBigEars,
Sorry, my short post does indeed look kinda snarky, now that I look at it again after folding a mountain of laundry. I wasn’t disagreeing or trying to shut you down. Not at all. It was just fun to be reminded of the old days and Godwin’s Law.
@Steve Klaus, it’s almost as though the media have been silenced on this issue somehow. What I find so strange about it all is that when I’m over there, everything still seems normal and fine. I still can’t figure it out.
@Mona Lisa, I do agree with your points, every one of them. I have given up the U.S is going to change this any time soon. You and I have been on the same painful journey and are in the same situation. I still have family there. Trust me, there is media silence for a reason, that sort of manipulation of news sources is not new.
I do believe helping people to find there way out of the morass is a laudable goal.
@Atticus, precisely. We simply don’t count to them. But in the same guise, because we don’t matter to them, I also don’t see the IRS hunting down benign minnows who hadn’t been aware of their obligations to file and report accounts, so this can be viewed in two ways. However, if people are overtly encouraging blatant defiance, I could see the US Govt regarding such individuals as a potential threat to national security, especially in the current political climate. And with the help of NSA and FATCA surveillance, they’ll have the capabilities to monitor people they don’t like, including Brockers….
Even former citizens/US Persons could continue to be monitored since the CRA and other countries tax authorities will inevitably continue to inadvertently send financial information to the IRS on those with US indica such as a US birthplace. I take for granted that my pension fund and accounts will continue to be relayed to the IRS, and that what at least some of us post could be being monitored by the NSA, especially in poodle countries like the UK.
I could imagine that they’ll be especially interested in the various meetings that IBS has set up in Canada and the UK. Sorry but I am genuinely worried that people could be increasing their risks of being targeted!
Presenting The #1 Financial Haven For Dictators & Criminals
http://www.zerohedge.com/news/2014-02-26/presenting-1-financial-haven-dictators-criminals
@Monalisa1776 Yes you are right, we should not be angry and should not speak out or sound extremist LOL….whatever, like we picked a fight with them? “We were only following orders”. Anyway I’m heading to Kazakhstan ( the greatest country in the world,) for a few months where the people have never heard of John McCrime. ;-))
Great hillbilly song for y’all
The Credit Suisse news isn’t just big news in the U.S. It was front page of the Financial Times in the U.K. yesterday as well. The people with these accounts seem not to have been U.S. citizens living and working in Switzerland or even people who had moved to the U.S. from Switzerland. They were recruited at an exclusive ball in New York, at golf resorts in Florida, Nassau and the Bahamas, and at the airport when they flew into Switzerland to ski. I can understand why people in the United States are angry because these people actively attempted to evade taxes.
@monalista1776 I agree with you about the need to be careful about the tone, although there are pretty strong protections for free speech.. Personally, I don’t think that the U.S. taxation of its overseas citizens should be compared to anything that has killed people. Yes, it is true that the Nazis confiscated the wealth of Jewish emigrants, but they also had made life so dangerous for them in Germany that they had to leave for their own safety. The U.S. confiscated the gold of U.S. residents during the Depression, but I wouldn’t compare FDR to a Nazi on that basis.
What our situation is most close to is the situation facing the American colonists in the 1770s and arguments that highlight how the U.S. is violating the values of the founding fathers are more likely to prick the conscience of both parties and the American public in general. Right now I have taxation without representation. My rather clueless representative would love to tax overseas Americans more, even though his website makes clear that he will not deal with their e-mails!.
My relatives are somewhat more sympathetic, but perhaps because I had been seriously underemployed and barely able to keep up with my student loans and health insurance until I took up my overseas job.
Part of the problem in terms of politics is that the word ‘middle-class’ never appears anywhere in our arguments. FATCA is particularly hard on people who have ended up with small pensions that fall into the classification of ‘foreign trust,’ but you would not know that from the coverage
Would someone who has posting privileges on Zero Hedge please start posting there? They have hundreds of thousands of hits per day and is considered to be the number 1 financial blog on Earth by a country mile
Presenting The #1 Financial Haven For Dictators & Criminals
Submitted by Simon Black of Sovereign Man blog,
http://www.sovereignman.com/finance/presenting-the-1-financial-haven-for-dictators-and-criminals-13653/
Pop quiz: When really nasty criminals and dictators want to hide their illicit gains, which country do they go to?
I’ll make this easy for you – multiple choice:
a) Switzerland
b) British Virgin Islands
c) Hong Kong
With all the drama, history, and stigma surrounding Switzerland, most people would choose (A).
Yet over the last few years, Switzerland has worked hard to shed this reputation, even going so far as to propose laws making it easier for them to freeze dictators’ funds.
But in reality, the correct answer to the question is (D), none of the above. It’s the United States of America.
Despite being at the forefront for every other country in the world to eradicate banking privacy, the US government has hardly done a thing about the huge cracks in its own banking system… at least when it comes to foreigners.
Many states ranging from Delaware to New Mexico boast corporate entities that can be completely private, especially for foreign shareholders.
Not to mention, attorney-client privilege laws in the US mean that a lawyer can be inserted between a foreigner and their Delaware bank account, making the funds virtually untraceable back to the original shareholder overseas.
Last– the US banking system is so large with hundreds of billions of dollars of inflows and outflows, it’s quite easy for several hundred million to slip right past the radar.
So if you’re a villainous dictator who has plundered your citizens’ wealth, you’d be a fool to stash that cash away in Switzerland. Wall Street banks are waiting with open arms, and Saul Goodman is just a phone call away.
None of this, by the way, is any wild conspiracy theory. It’s all fact… validated by the US government itself.
You see, the Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, sent out a rather frantic email blast to banks across the United States yesterday about former Ukrainian President Viktor Yanukovych.
Mr. Yanukovych recently fled his home country and is on the run from mass murder charges. And as you can imagine, he has spent years plundering the wealth of Ukraine.
FinCEN recognizes that Yanukovych has substantial assets stashed away in the Land of the Free… and they’re keen to avoid yet another embarrasing public scandal in which the US banking system is caught financing a fugitive dictator.
So their email yesterday was a not-so-subtle suggestion to banks across the country that they should sound the alarm bells with respect to “suspicious movements of assets related to Viktor Yanukovych. . . and other senior officials resigning from their positions or departing Kyiv.”
It certainly begs the question– why would FinCEN send out such an admonishment to US banks?
Simple. Because while ordinary citizens are treated like dairy cows and medieval serfs, FinCEN knows that the United States is the #1 financial safe haven in the world for foreign criminals and dictators.
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@Mona Lisa, yes indeed. Lately the U.S. has taken to making life very hard for legitimate journalist whistleblowers. We do have a right to say what has happened to us but, I don’t think we’re winning any points and perhaps inviting backlash by getting hyperbolic but, I’ve said that before.
Of course there is legitimate anger, I suppose the trick is to channel that into something that is productive for as many people as possible stuck in these situations. This is hard enough without creating foot bullets for ourselves.
What Credit Suisse was doing is the problem here and I’m very, very angry with them. Had they not been doing what they were none of us would be caught in this mess. The U.S. has responded by finding a way to ridiculously target minnows while letting a lot of the really bad guys use loopholes and expensive attorney’s off the hook. I don’t even see any real addressing of the issues of large corporations who operate with territorial taxation.
It’s all very disheartening. The most important thing is helping people find their way through this.
@CheafBigEars, as someone also with some Jewish heritage, I will always thank the USA for having provided sanctuary for some of my ancestors who probably would have otherwise perished in the Holocaust.
@Publius, I agree that our grievances are more on par with how the colonists resented taxation without representation, rather than the Nazi treatment of the Jews.
Atticus,
The US has ALWAYS wanted to put the squeeze on expats. The controversy with UBS and Credit Suisse has now provided them with the tools to do it; i.e. FATCA.
BTW, US banks behave the same way in Latin America as Swiss banks do in other parts of the world.
Uncle Sam has no moral credibility whatsoever.
@shadowraider, while-the-sencarllevin-inquisition-is-taking-place-a-bulletin-from-repdavecamp/comment-page-1/#comment-1151655 Thanks for your efforts indeed. Unfortunately, Roger Conklin had clearly predicted the outcome many months ago based upon similar efforts 30 years ago.
February 27, 2014
[A Staffperson I met last week]
Office of Congressman Jim McDermott (WA-07)
Senior Member, House Ways and Means Committee
Dear [ ]
You will remember me as the fellow who made the unusual request to you at our meeting last week that Congressman McDermott help U.S. citizens living abroad renounce our citizenship and our association with the IRS in a humane way.
I asked for Jim’s help because of my prediction that residence-based taxation, which I explained to you, is unlikely to happen in my lifetime, and that the only way for people like me to survive the unjust tax rules imposed by my own Congressman is to renounce from the U.S. and at the same time from the IRS, without penalty. You will recall the unjust and punishing expatriation-from-IRS penalties imposed by Congress that I mentioned to you and that are detailed in part in the Richardson submission.
Well, just one week after our meeting and it turns out that my prediction was correct.
Please go today to the just released tax reform package and let me know the provision that is actually aimed at helping U.S. citizens abroad survive your crippling tax laws.
So, my request must be reiterated now in even stronger terms on behalf of all U.S. citizens living abroad: Please ask the Congressman to help us even more quickly renounce our citizenship and at the same time our involvement with the tax rules of Congress, in a way that is humane and which does not cause us more financial harm.
Thank you,
IRSCF
@ChearsBigEars: Please forgive me if this is unmerited, but IF you are for real, then I would strongly encourage you to respect the concerns raised by monalisa1776 and others who have already given so much effort and time to working here.
“IF you are for real,” because (naive of me perhaps?) I had immediately assumed from the tendency of your postings to break up thoughtful discussions and steer us off the high road into very muddy ditches that you might well be employed by NSA or the Kremlin or who-knows-what organization….
If unjust, I apologize. But please let’s work “win-win” whenever we can. There are plenty of other places that indulge in hate-fests. This is not one of them. The posters here are mostly good, solid, honest people who help one-another and try to solve intractable problems piece-by-piece, without causing harm to others.
Thank you all.
@Atticus, Yes, I’ve sadly concluded that they’re not going to listen to us and that choosing expatriation is actually a matter of self-preservation in many instances.
We have done a post asking when certain analogies are appropriate: http://isaacbrocksociety.ca/2012/08/14/both-our-forefathers-were-slaves-when-is-a-comparison-correct-and-when-isnt-it/
@ChearsBigEars while i realize this is a public website and that you are a very angry individual over this whole facta thing however it tends to grow old when just about every thread that you have commented on swings over to the “grab the pitchforks, strike the torches and lets have a mass revolt against the american gov’t” oh and close out your bank accounts and buy gold too.
please keep what @ Sad-in-the-UK posted in mind “But please let’s work “win-win” whenever we can. There are plenty of other places that indulge in hate-fests. This is not one of them. The posters here are mostly good, solid, honest people who help one-another and try to solve intractable problems piece-by-piece, without causing harm to others.”
as well as what @ monalisa1776 has to say “I must admit that this angrier tone on here frightens me. I genuinely fear that Isaac Brock could become regarded as an extremist site/organisation;”
i don’t think that anyone here would disagree with you that fatca sucks. most people however only want to find a way out of this mess for themselves and do what they can to eductate others about fatca or voice a comment about their situation and what has or has not worked for them.
please @ChearsBigEars please keep commenting however like i said above tone it down as i believe you are doing all a disservice with the extreme comments and could be potentially harming the cause rather than making it stronger. 🙂
@IRSCompliant, Excellent letter. Thanks for all you have done. You are a shining example of how to fight the fight without renouncing. Please don’t stop. We will win eventually.
@ChearsBigEars, I feel your frustration. If/when we ever have a BIG public protest/demonstration(and we will know when the timing is right and the masses have had their OMG moments), I expect you to be there at the front of the crowd with the biggest sign. Please just keep in mind, that a little rebellion goes a long way, and too much makes us look like nut bars.
@mettleman and others, I think it would be good to remember that we have a sidebar note that says the comments and posts are an expression of the opinions of the individual writers, and not necessarily the collective opinion of the Isaac Brock Society. Also, whether or not Chears makes his comments, this website has already been labeled many times as extremist and inflammatory.
I agree with you, mettleman. I completely understand the analogies of FATCA with other historical events. However…
If we want others to HEAR US, I believe we have to keep the message on US citizenship-based taxation being enforced in countries of the world that practice residence-based taxation and that the countries we have chosen to live in are enabling our countries’ own local “foreign financial institutions” and tax authorities to turn over our private financial information to the US so the US can then take action with draconian penalties for our ignorance of US tax law. Our ignorance is largely because the US did not live up to their responsibility to properly educate those who left the “homeland”. Not one person I’ve asked knew anything of US citizenship-based taxation.
There is no fairness; i.e. let’s call it what it is – a US cash cow if the US will not change their law to that of the rest of the world, residence-based taxation. There is no US amnesty. Since, as we see, the US stubbornly appears not willing to even discuss change of their CBT to RBT, if it had any sense of justice, it would provide a way for persons compliant with all taxes in their own countries to voluntarily leave the US citizenship-based taxation system. Instead, the US steadfastly believes our resources earned and saved in our chosen countries should not remain in our countries.
There could now be a line in the sand where there would be a REAL amnesty, people able to make a choice (stay or go) and move on with their lives. What is highlighted with the Credit Suisse hearings is persons RESIDENT in the US are the tax evasion criminals. We, the collateral damage of US citizenship-based taxation, unless some humane pathway out of this, will remain US chattel as we cannot be taxed only as residents of our own countries. The most troubling thing other than any lack of common sense and humanity is the US, as usual, doesn’t give a damn about any collateral damage.
I just listened to Part 2 of yesterday’s hearings — at the end Carl Levin told reporters there will be plenty of other hearings regarding “tax avoidance”. Guess we’d best listen up.
@Petros fair enough about the sidebar “are an expression of the opinions of the individual writers, and not necessarily the collective opinion of the Isaac Brock Society” i would hazzard a guess that most people (myself included) either have not read that or remember reading that.
i certainly don’t envy you nor any of the others that have put in countless hours into bringing this fatca thing to the top of our minds. thank you for all the work you have done.
while i also realize and accept that “this website has already been labeled many times as extremist and inflammatory.” and i am actully proud to be a contributer to something labled “extremist and inflammatory” does extremist and inflammatory comments really do any good except to further fan the flames of extremist and inflammatory views of this website?
i think by and large most posters and people involved here are not extremists or wanting to post inflammatory views. they only want to see a way out of this mess called fatca.
that being said each and everyone of us has the right to speak their minds and each and everyone of us here have the right to agree or disagree with said comments.
i just wish that none of us had ever even had to become involved with this situation. it is a very emotional one for all and sometimes emotions do get the better of each and everyone of us.
@mettleman, not sure that any comment is extremist or inflammatory if it is expressing the truth: what is really the case. If something is false, that should be pointed out. Let’s say for example we were upset that 1000 hydrogen bombs were pointed at Ottawa. Then, someone says, “That’s an extremist opinion”. Well there’s nothing extreme if it is true. So now we should approach it as whether the claim is true or false.
In the behaviour of the US, I’ve learned that little can be said that really is extremist because so many of the claims are actually true. Is extraterritorial taxation a human rights abuse? Well, yeah. Is FATCA an attempt to force banks to become complicit in this human rights abuse? Yes again. Are they spying on everyone, friends, allies and citizens? Well yeah.
So I hope you see why we try to be tolerant of marginal views. The important thing is to refute them if they are false, not whether some will see it as inflammatory. In the past, some of the people who are part of this current conversation were essentially told that their views were extremist by the Expat Forum (expatforum.com). That is why the Isaac Brock Society now exists and that is why I think it is important to tolerate and refute incorrect views, even if on they seem on the fringe.
In any case, I’m sorry that this happening too.
@Petros, I’m all for free speech but was just pointing out my paranoia.