UPDATE: JUNE 14, 2015
from JakDak:
The Senate Finance Committee chairman, Senator Orrin Hatch (R-UT), has established working groups to study different aspects of the tax system. These working groups are scheduled to report back to the committee by June 26.
Tax Policy Update
June 09, 2015[Interesting: NUMBER OF THE WEEK: 61. The number of countries that have signed on to implement the OECD’s multilateral agreement for the automatic exchange of tax information, in conjunction with the ongoing Base Erosion and Profit Shifting (BEPS) project. Although the U.S. has committed to implement the standard, it has not yet signed onto the formal agreement (the “multilateral competent authority agreement”), which lays out in detail what information will be exchanged, the timing and method of exchange, and how signatories will work together to ensure compliance. Signatories to the agreement will begin exchanging information as early as 2017. Additionally, the OECD released on June 8 its “Country-by-Country Reporting Implementation Package” developed under the BEPS Action Plan. Under the plan, which the Treasury Department has said it will implement for the 2016 fiscal year, multinational companies are required to aggregate and report information annually regarding where they do business, the global allocation of income, and amount of taxes paid, along with other information that will allow taxing authorities to more closely examine multinationals’ tax practices. The release of the package coincides with the 2015 OECD International Tax Conference in Washington, D.C., this week where OECD representatives are expected to review and discuss key initiatives under BEPS.]
SPOILER ALERT: Comprehensive Tax Reform Unlikely in 2015. In an interview last week, Senate Majority Leader Mitch McConnell (R-KY) outlined a busy legislative agenda between June and August recess: passing a highway bill, cybersecurity legislation, No Child Left Behind, and the Toxic Substances Control Act. Tax reform, however, is conspicuously missing from the list. “We’re certainly not going to be able to be doing big, comprehensive tax reform with this president,” McConnell said. Tax reform optimists have been eyeing the highway reauthorization bill as a potential vehicle to move a limited set of tax reform measures, but according to McConnell, the bill might instead be better suited to pick up a different legislative passenger—the reauthorization of the Export-Import Bank. McConnell believes the highway bill would provide the best opportunity to reauthorize the bank, which is set to expire June 30.
The inability of the Senate Finance Committee Tax Reform Working Groups to meet their original May 31 deadline to report recommendations to Chairman Orrin Hatch (R-UT) and ranking member Ron Wyden (D-OR) only adds to the general pessimism. The international tax working group may offer the only glimmer of hope, with reports that it has made the most progress in hammering out detailed recommendations. The working groups are now aiming to deliver their reports before Congress departs for the July 4th recess.
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UPDATE: MAY 25, 2015
Em’s comment to JakDak:
I’m not sure of the where for the SFC recommendations but the when has been delayed:
http://thehill.com/policy/finance/242916-senate-tax-reform-groups-get-more-time
The Senate Finance Committee’s leaders are giving tax reform working groups some more time to formulate their recommendations.
Finance Chairman Orrin Hatch (R-Utah) and the panel’s top Democrat, Sen. Ron Wyden (Ore.), had hoped for recommendations by the end of May.
But in a statement Thursday, the two senators said that the working groups made it clear that they needed extra time to do the job right. The panel will set a new deadline after lawmakers return from next week’s recess.
“It is our hope these bipartisan working groups will use this extended time to finalize their recommendations for tax reform and produce in-depth analyses of options and potential legislative solutions,” Wyden and Hatch said in a statement.
etc.
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Shadow Raider says
April 29, 2015 at 6:39 pm
The Senate Finance Committee just released the comments sent by the public on tax reform. As expected, there are lots of comments about CBT and FATCA.
http://www.finance.senate.gov/newsroom/chairman/release/?id=3b14e94b-69f9-41e2-9fd3-7d191971b7ee
Hatch, Wyden Release Public Input on Bipartisan Tax Reform
Over 1,400 Submissions Made to Working Groups
WASHINGTON – Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) today released over 1,400 submissions from stakeholders on how to best to overhaul the nation’s broken tax code. In March, the Committee sought input from the public in an effort to provide additional data and information to the Committee’s bipartisan tax working groups, which are currently analyzing existing tax law and examining policy trade-offs and available reform options within each group’s designated area.
“We thank the stakeholders and public who provided us with this valuable data and input,” Hatch and Wyden said. “These submissions have equipped us with the ability to better evaluate how reforming the tax code will affect both American families and business of all kinds. As our bipartisan groups work towards producing substantive recommendations on how to reform the tax code, they will now be able to consider these valuable ideas.”
All comments received by the Committee that met submission requirements were made public.
Submissions can be found below. Total submissions to each bipartisan tax working groups are as follows:
Individual Income Tax – 448
Business Income Tax – 332
Savings & Investment -128
International Tax – 347
Community Development & Infrastructure – 207
Each of the five bipartisan working groups is currently working to produce findings on current tax policy and legislative recommendations within its area, with the goal of having recommendations from each of the five working groups completed by the end of May.
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Thanks, Shadow Raider, for alerting all here. There will be many Brockers reading, starting with the submissions (not all by individuals) to International Tax.
Re: Individual Tax it would be interesting how many relate to Ex Pat tax ?
There are four submissions from Democrats Abroad. They ALL appear to deal with FATCA. Could somebody look at these and determine whether Democrats Abroad takes the position the position that citizenship based taxation should be abolished.
I have skimmed the four submissions from Democrats Abroad. I hope I am wrong about this (I read them quickly) and I would very much like to be corrected, but it appears that:
1. Democrats Abroad does NOT advocate for the repeal of citizenship taxation. In fact they assume that it will continue.
2. Democrats Abroad does NOT advocate for the repeal of FATCA. In fact they want it to continue.
3. Democrats Abroad SUPPORTS the imposition of FATCA on financial institutions outside the United States and on U.S. citizens abroad who are NOT U.S. tax compliant. In other words, Democrats Abroad supports the “FATCA Hunt For U.S. Citizens Abroad”.
4. What Democrats Abroad is doing is:
A. Assuming the continued existence of citizenship taxation
B. Supporting the continued existence of FATCA.
C. Asking for a “carve out” from the FATCA reporting requirements for Americans Abroad who are U.S tax compliant.
If I am am right in this (and please correct me if I am wrong – please, I hope I missed something) then Democrats Abroad is in direct opposition to the survival of every U.S. person outside the United States (and that’s putting it very nicely).
How about a rep from @Demsabroad explaining how I am wrong.
I just randomly read around 50 submissions. Most are 2-5 pages. There are two sorts of unanimity:
1) All submissions from companies deal with corporate taxation, not surprisingly. I didn’t find a single one which mentioned the taxation of US expat employees of those companies.
2) Every submission from individuals is more or less in agreement regarding elimination of FATCA, and are only divided on taxation as to whether CBT should be repealed, or whether a multi-year residency test should apply to exempting bonafide non-US residents from taxes.
Some dealt with specific issues, such as taxation of Australian annuities.
I didn’t see any (so far) which advocate tightening the noose further.
I think anyone seriously looking through these (Senators’ aides, etc.) could read all the international tax submissions in a single day, and would not be able to use the excuse beloved of governments to dismiss public opinion: “There were too many divergent views to form a consensus.” There definitely is a consensus.
Still, I’m not holding my breath. The other excuse beloved of governments is (translated into this case): “There are 8 million US citizens living abroad and only 347 submissions. Therefore, 7,999,653 Americans are happy with the current tax laws.”
I invite others here to look through these and single out any from compliance condors advocating more of the same.
USCitizenAbroad,
Thanks for reviewing and giving the assessment of what Democrats Abroad has submitted. Very sad commentary — a kick in the stomach from your neighbours and mine. I just don’t understand!
@JakDac: Random clicking of submissions about Individual Income Tax nets me a fairly high proportion of submissions about CBT and FATCA. Cross-checking names shows that every one of these so far is a duplicate of a submission to the International tax committee. In other words, a lot of us (including my husband and myself) sent submissions to both committees. Which is a good thing! It puts us on two agendas. Yet isn’t it also interesting, then, that if you subtract such duplicate submissions, how few Americans submitted suggestions for changing the US tax code as applies to everyone? I’d have expected thousands of submissions.
Re: 347 submissions
It seems many Individual submissions ALSO are related to INTERNATIONAL tax thus I believe the MAJORITY of submissions deal with International issues
Individual Income Tax – 448
Business Income Tax – 332
Savings & Investment -128
International Tax – 347
Community Development & Infrastructure – 207
Again Sen Dan Coats International Tax most success re recommendations
http://www.slideshare.net/BrandonRomn/tax-talk-42415
Jak Dac is busy sending this to the media:
abelson@globe.com,
christine.morris@globe.com,
tracy.jan@globe.com,
mcgrory@globe.com,
rgavin@globe.com,
daniel.adams@globe.com,
ewoods@globe.com,
m_bailey@globe.com,
JAbundis@globe.com,
laura.amico@globe.com,
hkaufman@globe.com,
VChao@globe.com,
shira.center@globe.com,
dabel@globe.com,
scott.allen@globe.com
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Jak Dac AND ON
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Michael.Hiltzik@latimes.com,
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USCitizenAbroad,
I also skimmed through the Dems Abroad submissions. This group, apparently speaking for the DNC, does not appear to have any opinion on citizenship taxation. Incredible.
For contrast, you might want to go then to the Republicans Overseas submission. You will find this statement:
“II. The United States should repeal Citizen Based Taxation (CBT) and tax worldwide
income of only those citizens resident within the United States.”
Thank-you Calgary411 for the post, and Shadow Raider for bringing it to our attention.
Looking forward to reading them. Mine and my husband’s are there. We submitted separately to both the International and Individual categories – mine shows up in both, but it appears that my husband’s hasn’t yet been posted to International. Oh well, at least we’re there, with lots of other familiar names and organizations!
You’d think with a nation the size the US is, there’d be more submissions than there are. It will be interesting to see if there are a disproportionate number of submissions from Americans abroad. My attitude is if they don’t hear us now, they never will.
I’ve read the first 50 (Individual Income Tax) and my rough tally is that 15 of them are about taxation of “overseas” U.S. persons (i.e. CBT, FBAR and/or FATCA). That’s 30%. I don’t know if that will hold up as I read further.
@ Barbara
I’ll keep a lookout for condors screeching for more complexity, more compliance rules/penalties and therefore more potential clients.
A computer whiz could download all individual submissions and search for key words as to determine if it dealt with International Tax then post the FINAL submission figure regarding TRUE International Tax submissions
Finally! Someone points out the one true benefit of FATCA! From Kyle D. Hegarty’s submission:
“The bright side is that when I get an unsolicited sales call from firms wanting to manage my money, all I have to do is tell them I’m an American. It’s all it takes to end the call.”
Of course Kyle is on our side. But this remark brightened my day.
Eva Stigaard Laird — UK doc, threatened with account closure, unable to marry, unable to move, unable to sleep, feels like a criminal, frightened, angry, getting a SS number took nearly a year, cancelled a US trip, struggling through the paperwork alone … and her young daughter misses her mommy’s attention … WOW!
@Barbara,
Haha, yes! That has happened to me, too. I recently had a particularly persistent financial-product salesman keep calling me for two days despite my repeatedly saying “not interested” and hanging up on him. Finally I told him, look, I’m a US citizen, and this would create tax hassles — and he immediately said, “oops, sorry to have bothered you! Bye!” And I never heard from him again.
Oh no … they neglected to redact one poor woman’s e-mail, home address and phone numbers. That’s sloppy.
@USCitizenAbroad & Stephen Kish
I read through all 4 DA submissions slowly and carefully.
1)There is not a single instance of mentioning CBT.
2)There is not a single instance of mentioning RBT.
3) DA does not support a repeal of FATCA; requests it be applied to Homelanders and non-compliant Americans abroad.
4) DA suggests only those who file 8938 with tax return be accepted into Safe Harbour (program)
5) DA mentions collaboration with AARO, FAWCO and ACA; a united front?
As a former American abroad, I find it both puzzling as well as cause for concern that a prominent expat organization would consider that changes to FATCA are the only recommendations for large-scale tax reform. With all the financial inequities that plague expats, to request only that FATCA be altered is truly bewildering. (As if FATCA is the only way to sift out the real tax evaders). FATCA is about a lot more than tax evansion. The privacy concerns, the effects on the economies of nations other than the U.S; negative effects on the U.S.’s economy etc. Do people really NOT question the action/economic sanction inflicted by the US government against every other nation on earth? Really? I wonder how many people will fail to investigate for themselves, thinking that DA surely will have the best “reading” of the situation.
To not even mention CBT/RBT is mind-boggling. It is not FATCA that is the real the anti-saving feature faced by expats. Yes, if you cannot have a bank account, you cannot save. That is the symptom of a greater problem, not the cause. I presume most nations have somewhat similar incentives for tax-deferred savings and so on. If the US is taking away those advantages because of CBT, how is Safe Harbour going to be of any help? How will Safe Harbour help young adults set up their financial plans for their future? Is it ok for the US to tax our capital gains on the sale of our primary residences (no foreign tax credit there) when we have not received the same deduction for mortgages/interest that Homelanders receive? “Foreign” mutual funds? “Foreign” pensions? I noticed that the survey indicated that 57% of the respondents were over 55 years of age. And that 50% of the respondents had savings/investments of less than $50,000. Given many countries expats live in have a much higher rate of tax/standard of living, I do not understand. How they will afford to retire?
Now I feel like you USCA. What am I missing here?
@JakDac, I used a Firefox tool to download all links. The actual number of files was slightly different, 449 for individual and 316 for international (plus 5 broken links in international). Then I used an Adobe tool to search all PDF files in a folder and count the number of files that contained the keywords citizenship, FATCA or FBAR.
Results:
Individual 172/449 = 38%
International 175/316 = 55%
Pathetic.
Yes, we already know Democrats Abroad has their own twisted ideological reasons not to support CBT repeal, FATCA repeal, or an easier path out of citizenship.
But what’s their excuse for not proposing de minimis asset thresholds below which PFIC & “foreign trust” taxation would not apply, foreign tax credits for payroll taxes, treating all foreign government-mandated retirement plans at least as “favourably” as RRSPs, or any other numerous wonkish suggestions which are far away from the hot button issues and could easily be structured to benefit only the poor & middle class and not those mythical “wealthy people fleeing the country to escape the estate tax”?
@ Shadow Raider
Neat trick! That Firefox-Adobe thing you did. Those are impressive percentages I’d say and beneath them lie many persuasive testimonies with thoughtful suggestions for reform. Now, the questions are — will they read, will they comprehend and most importantly, will they do something positive?
@Shadow Raider: I noticed at least three submissions referring to FACTA, not FATCA. I suggest you re-run your search with FACTA as an additional keyword
Also, at least two referred to FBARs not by the abbreviation. Anyway, your results are interesting.
Using similar logic, one could assume that (449-172) / 300,000,000 are happy with US domestic taxation.
I think that having more than 50% of the submissions ought raise awareness. At Ways and Means, they pretty much ignored an overwhelming quantity of submissions. It will take them a much greater effort to ignore these which surpass the 50% mark.
DA is controlled by the one or 2 at the top, who are personally tax compliant. Those 2 represent themselves and their interest to be a part of DNC. There are a few inside DA trying to change that, but they will not be allowed to change DNC policy.
It confirms that we know that DNC wants FATCA because it locates all of the millions of US persons living anywhere so that they can contribute their “Fair Share” to the machine.
The DA submissions are inexplicable – I actually felt sick reading them. After so much evidence, it is as clear as can be that RBT must be adopted by the US – yet, they blinding and mindlessly follow the DNC/Obama agenda.
I just read a handful of submissions and they are very moving. Individuals who write about their misery and suffering living in foreign lands. These might be more influential than one thinks and they are prime examples of what Nina Olson was talking about when she noted the suffering of expats who are being tormented.
We are looking at TAX REFORM here- finally! Maybe we can be a bit more hopeful and spread some positive energy? Maybe the republicans on the task force will see through the democratic agenda.
It is all a maybe, but I think there will be positive changes ahead. It is just a question to which extent. But one would have to be deaf dumb and blind not to see that when citizens suffer, something is very wrong and needs to be changed.
As an aside- what about the Bopp case in America? The timing for that would be NOW.