Many of you have reasonably given up on the political process in any country as a means to change bad laws — and many would also have difficulty in agreeing with all of the positions of some members of the U.S. Republican party.
—But today the Republican National Committee voted unanimously a resolution to support Residence-Based Taxation.
This is a good beginning.
We now have a major political party in the United States aiming to kill both FATCA and citizenship-based taxation. Will the other party support these good resolutions?
From the RO Facebook site:
Resolution Supporting “Residence Based Taxation”
WHEREAS, Residence-Based Taxation, (RBT), is a fair, equitable, and efficient taxation of American Citizens living overseas because it taxes their worldwide income only once in the country where they actually reside and receive government services;
WHEREAS, RBT would not only align U.S. law with the other industrialized countries, but also eliminate complex requirements and tax forms, such as the Foreign Account Tax Compliance Act (FATCA) and the Report of Foreign Bank and Financial Accounts (FBAR); and, it would significantly reduce IRS administrative expenses;
WHEREAS, The United States is the only industrialized country in the world that taxes foreign-source income of its citizens living overseas by Citizenship-Based Taxation (CBT), resulting in double taxation; all other industrialized countries only tax foreign-source income of their citizens residing in their home country (Residence-Based Taxation or RBT);
WHEREAS, The complexity of a U.S. tax return for an American living overseas and the significant additional penalties applicable to
Americans living overseas requires these U.S. Citizens to hire expensive tax preparers; the cost of this double-taxation along with the costs of preparation and compliance put American job seekers at a competitive disadvantage to other non-American workers, thus costing American jobs;WHEREAS, The higher cost to hire American workers resulting from CBT causes multinational corporations, even those headquartered in America, to hire fewer Americans, to have less of a connection to America and purchase fewer American goods and services, thus decreasing American exports;
WHEREAS, The Foreign Account Tax Compliance Act (FATCA), implemented as a result of CBT, has caused banks, both U.S. and foreign, to deny access to banking and other financial services to the 7.6 million Americans overseas, thus denying employment and investment opportunities and forcing them to choose between U.S. citizenship and their livelihood;
WHEREAS, The implementation of FATCA to enforce CBT promotes the abandonment of the U.S. Dollar as the global reserve currency and hurts the U.S. economy; and
WHEREAS, History reveals that replacing Citizenship-Based Taxation with Residence-Based Taxation will raise net Federal tax revenue because of increased economic growth, therefore be it
RESOLVED, The Republican National Committee urges Congress to repeal Citizenship-Based Taxation and its supporting legislation such as FATCA and FBAR;
RESOLVED, The Republican National Committee urges Congress to permit restoration of citizenship for those who were compelled to renounce their citizenship because of the crushing burdens of FATCA and FBAR; and
RESOLVED, The Republican National Committee urges Congress to align U.S. law with the laws of other industrialized countries of the world by limiting taxation to Residence Based Taxation on American Citizens living overseas which will encourage increased employment of Americans and increased export of American goods and services.
Chief Sponsor – Solomon Yue, Jr., Republican National Committeeman for Oregon (Vice Chairman and CEO of Republicans Overseas)
1st Co-Sponsor – Carolyn McLarty, Republican National Committeewoman for Oklahoma (Chairman of the RNC Resolution Committee and Member of Republicans Overseas Board of Governors)
2nd Co-Sponsor – Jeff Kent, Republican National Committeeman for Washington (Vice Chairman of the RNC and Member of Republicans Overseas Worldwide Advisory Committee)…..and others
@Foo, you are not alone. CBT will make millions of people single issue voters.
@foo
I don’t mean to sound so blatantly partisan. I am just calling a spade a spade.
The Dems really need to get pinned down hard by their own people (now, not later). Only the real concern of losing overseas voters (support they take for granted) will wake them up.
Pretending that CBT is not a big deal is a position that deserves to lose every single expat vote out there. That is, if there will be many expat voters left by the end of this year.
The high number of renunciants, which the Democrats unfortunately control the reporting of, may be enough to embarrass them into doing something about CBT, particularly if they lose their ability to keep painting expats as a few wealthy tax dodgers sipping champagne on the French Riviera. The more expats who renounce or relinquish as a result of CBT, DT, FATCA, FBAR, ET, Reed etc (equivalent of colonial period Intolerable Acts) the less they can be painted as belonging exclusively to the 1% (bête noire for Dems).
In short, if I were a Democrat, I would be pissed off mightily as well and probably preparing to jump ship before getting thrown under the bus by my own party.
In short, if I were a Democrat, I would be pissed off mightily as well and probably preparing to jump ship (or renounce) before getting thrown under the bus by my own party.
Interesting times for sure. You would think the US would start running some projections in order to comprehend what they are getting themselves into. People ditching their US citizenship looks to be growing exponentially. I’ve heard it could be 10,000 or more for year 2014. Is 2015 going to be 20,000? 2016 maybe 50,000, 2017 200,000….? They will certainly look like fools when this finally escalates. I suspect the DoS will soon place a freeze on all renunciations and relinquishments. Maybe not a freeze but what will happen is they will take the procedure away from embassies and require that you relinquish or renounce from Washington D.C. (or some obscure place in the middle of nowhere “sorry, but to renounce you must do this at our renunciation premises in Guthrie, Iowa”). Then people simply can’t afford an overseas trip to renounce -problem solved.
Every single renunciation is another finger poked in the eye of tyranny.
RO clearly understands that many expats will ultimately reject tyranny and renounce. Hence their proposal of restoring citizenship to those who were forced to renounce, which shows a remarkable degree of awareness and compassion:
“RESOLVED, The Republican National Committee urges Congress to permit restoration of citizenship for those who were compelled to renounce their citizenship because of the crushing burdens of FATCA and FBAR;”
Meanwhile, the Democrats continue to be “wilfully blind” to the tragedy that they for the most part created.
@Joe Blow:
As I wrote before, I have written to DA, I have written to candidates in my old district (where I’m registered to vote absentee), and they have all blown me off. Not even the courtesy of a “Sorry, and here’s why…” Just nothing. Well, lots of requests for money, to which I reply that I will not vote for or donate to someone who does not even answer my questions. One candidate wrote back saying, “Sorry to have missed your question, what was it?”, and when I reiterated the question about support for RBT, I got complete silence in return.
Now, I suppose the fact that nobody has come out and outright declared a position might be cause for hope. Perhaps they really haven’t decided yet, and perhaps there is yet hope for a bipartisan effort to eliminate CBT. And I do think a bipartisan effort will be needed.
I certainly will not allow myself to be thrown under, or forced to ride in the back of, anybody’s bus. If the Democrats don’t respond, I will take a good look at what the Republicans have to offer. Thinking about it, my disagreements with the Republicans have always been about social justice issues: civil rights, women’s rights, gay rights, etc. I never really had an opinion about tax issues before. But the social issues have made advances over the past few decades that I think are unlikely at this point to get rolled back no matter who is in power. And to be honest, CBT feels more like a social justice issue to me than a primarily monetary one anyway. So why not raise its priority in my deliberations when deciding how to vote?
I took a look at the DA abroad survey. You can’t fill it out if you say you’re not a US citizen – in other words that you expatriated already, or I think also (I’d have to go back and look at it) if you’re a current or ex greencard holder. Which means that they’re only really interested in the impact on and experiences of some of those affected – despite the fact that so many who have expatriated, or given up US PR have very important experiences and insights to relate from the events over the past few years. And, the survey is so detailed and intrusive that I think people may decide they feel uncomfortable giving up all that information, which includes questions about income, bank account balances, reporting, etc. – even if it says it is anonymous.
@foo
Very well said. The Democrats are indeed taking the “Fifth Amendment” with regards to CBT.
The Dems are guilty as hell, thats what they’re taking the fifth.
@badger
GC holders don’t matter to either side in the US… we can’t vote so we can’t do anything for them… they feel bad for us… maybe… but the name of the game is garner votes… Basically we are now 2nd class citizens in our home country besides being 2nd class in the US. They will gladly take our tax money but they don’t care to know our issues or hear our problems…GC holders are the invisible class… both our own gov’t & the US can’t be bothered to solve our issues of taxation
Then again, do you really want Romney as President if the Repubicans win?
http://www.bbc.com/news/blogs-echochambers-28155572
I would really like to see Rand Paul get the nod. I think he is by far the most empathetic towards expats I have seen up to now.
But i am not thinking so much about candidates at this point. I am looking at party platforms and the Republicans are clearly moving in the right direction with regards to expats.
Meanwhile, the Democrats are waging outright war on expats with no end in sight.
If Obama wants to redeem himself from the onslaught his comrades have unleashed on ex-pats he could use his executive powers to issue an Emancipation Proclamation.
Oh the irony of CBT being enacted during the Civil War. I guess America doesn’t like gaps in their imposition of slavery…
pukekonz, I don’t think you can renounce on US soil, according to their rules, and they can’t stop relinquishments unless they change their constitution somehow b/c the Founders were pretty clear that a USC had the right to do that.
For relinquishments, they could slow down or simply refuse to issue CLN’s but that won’t stop ppl from relinquishing by swearing an oath to a foreign power via taking on a new citizenship, joining the military or working for/being elected to govt. There are ways that all of those things can be documented that could eventually make getting a CLN unnecessary, provided one has no intention of going to the US again and doesn’t have any assets there.
Renouncing has to be done in front of a recognized authority and outside the US. Now they allow it to be done at consulates as well as embassies, but they could require that it only take place at the latter, which in a country like Canada would be a hardship in terms of travel and time spent.
I don’t know though that the USG is ready to take such draconian steps. What they’ve done so far is odious and unfair but it is still flying low enough on the radar that they aren’t seen as tyrants. Refusing to recognize relinquishments and making renouncing nearly impossible would be a bridge to far in terms of publicity.
Of course, you never know what they will do and they certainly are becoming more unpredictable and tyrant like as time passes. Never say never should be our watchwords.
@US_Person_Foreigner, re;
“….GC holders don’t matter to either side in the US… we can’t vote so we can’t do anything for them….”…
They are very short sighted since significant number of GC holders may become US voters. It is like corporations courting and grooming potential future consumers – children might not have money to spend today, but they will in the future. And GC holders who don’t become US voters, and who return to their home countries take their experiences and attitudes about the US back home where they ARE voters.
Same with expats abroad. We have family, spouses, children, friends and contacts in the non-US countries we call home. We vote. We try to influence people and events in our home countries and foreign policy. Some will be in positions of influence and power outside the US. Our recent and current experiences with the US cannot help but colour and determine how we see relations between our home country and the US. I was never an uncritical supporter of the US before anyway, but now I am heavily pre-disposed to take an antagonistic and suspicious position first and foremost where it is concerned, and to assume that all agreements and issues where the US is concerned are ones which are designed to lead to exploitation and maltreatment of Canada and others around the globe, and to treat anything that originates from the US government as likely falsehoods.
A very plausible reason for Democrats remaining officially “silent” about CBT is that they first want to see how much they can grab from expats using FATCA.
Then they will suddenly become all sympathetic and support RBT, but only after they manage to plunder as much as they can from expats’ savings.
From RO:
Twenty two RNC members, including seven of the nine-member RNC Resolution Committee joined Solomon Yue, Vice Chairman and CEO of Republicans Overseas to propose the following RNC resolution in order to end double taxation and FATCA for 7.6 million overseas Americans.
Resolution Supporting “Residence Based Taxation”
21st Co-Sponsor – Janet Beihoffer, Republican National Committeewoman for Minnesota
22nd Co-Sponsor – Sharon Giese, Republican National Committeewoman for Arizona
22 of 100 (perhaps there are some more for DC, Puerto Rico & territories) isn’t bad for sponsorship—prior to voting—they only need 30 more votes.
DA and DNC need to know that their members do not accept “fighting for same-country exception from FATCA” as an appropriate stance for DO.
DA is a very large and official arm of the Democratic party. Their current line is what is approved by the DNC.
DA needs to be told that their constituency needs more than what DA offers.
DA members also must understand what an FBAR is, what the consequences of FBARs are, and what the consequences of CBT upon their retirement products, parental leave payments, unemployment benefits, and their freedom of movement between countries.
Same country excemption applies only the FATCA. That is useless, because whether or not one is reported via FATCA the FBAR and taxation issues remain the same.
And DA’s education campaign is deliberately weak. THeir task force shows little.
Recently, on the DA Canada facebook page, an incorrect response was given that no individual needs to do anything regarding FATCA (FBAR) if they have less than $50k. That was criminal negligence.
Since so many folks overseas lean Democratic, it is critical that the push comes from inside the supporters.
On the RO side, the organization is not as formal as DA. The push needs to be to transform the RNC position into a position which is carried by the actual legislators. This has been slow in coming, with only a few showing up on the radar. I believe that most of them are scared to have their heads cut off by the media and Tax Justice Network and FACT and the other astroturf organizations.
No doubt everyone here who is still US connected is pushing for the max from legislators, it just has to keep coming.
Remember to get things moving that the majority has to come out of both sides of the aisle.
@pukekonz
They’re already throttling the renunciation numbers simply by keeping their administrative staff capacity low. If people didn’t have to wait months for an appointment, the numbers would be much higher. Of course, the State. Dept. lies about those numbers to suit themselves anyway, so either way the official numbers can be kept to a minimum.
Yes, Mark Twain, it’s political suicide for any politician to support us at this point, and as long as that’s the case Democrat’s Abroad will remain relevant.
@fromthewilderness
Provisions to make up any lost revenue would not necessarily need to come from us. I suspect that in the end there won’t be that much revenue because once people learn about this they start dramatically changing their financial behaviour or get so fed up that they relinquish or renounce. The returns are going to dwindle dramatically.
@pukekonz
Guthrie, Iowa! Goodness gracious, don’t give them ideas. There are lots of much less pleasant and accessible places under U.S. Control.
The Greencard holders and immigrants are also being hard hit. Korean Americans particularly, since they have been tempted by the higher interest rates back in the old country. Yesterday I saw an article from the Los Angeles Korean newspaper in Korean (thank you google translate) about ovdp that was illustrated with that I think might be a picture of a Canadian Brocker protest. (Lynne Swanson and some other Canadians were also cited in a panampost piece ‘Estados Unidos aplica la polemica ley FATCA para cobrar impuestos a sus expatriados’.
Republicans Overseas Action, Inc. (ROA) welcomes U.S. Senator Ron Johnson (R-WI) to serve as Honorary Chairman in his personal capacity. ROA was created for three purposes:
1) To raise money to fund our FATCA constitutional challenges in Federal Court in order to render FATCA inoperable,
2) To educate public how FATCA negatively impacts 7.6 million overseas Americans and 14 million foreign passport holding U.S. residents, and what would happen if the OECD succeeds to use FATCA reporting standards for all 317 million Americans in the US,
3) To replace FATCA with Residence Based Taxation by lobbying the White House and Congress after we recapture the White House in 2016 and have majorities in both chambers of Congress.
We are honored to have Senator Johnson’s participation in defense of those overseas Americans’ and U.S. residents’ Constitutional rights.
The RNC Resolution Supporting Residence Based Taxation is endorsed by Credit Union National Association, Inc. (CUNA) and World Council of Credit Unions, Inc. (World Council). CUNA is the largest credit union advocacy organization in the United States, representing America’s state and federally chartered credit unions and their 99 million members. World Council is the leading trade association and development organization for the international credit union movement. Worldwide, there are nearly 56,000 cooperatively owned credit unions in 101 countries with approximately $1.7 trillion in total assets and 200 million credit union members. CUNA will hand deliver a copy of this endorsement letter to RNC Chairman Reince Priebus next week.
http://www.woccu.org/documents/CUNA-World_Council_FATCA_RNC_Letter