UPDATE: JUNE 14, 2015
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.
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:
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.
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.
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.
Thanks, Shadow Raider, for alerting all here. There will be many Brockers reading, starting with the submissions (not all by individuals) to International Tax.
Shadow Raider good job
What tool ?
This shows that there are a lot more re unfair Ex Pat tax. It may be advisable for us all to re email both groups and point this out (Also tweet and Facebook your pants off) There are many emails in previous post to send to many media people just copy all and mass bcc)
Up and away
I think DA must be hobbled by the fact that DNC strategy has been to use tax issues as a wedge issue distinguishing Democrats from Republicans, coupled with a seeming reluctance to disagree openly with the DNC on anything. They really should be teaming up with Republicans Overseas to present a bipartisan, united front. Instead, they would rather parrot DNC sound-bites than actually attempt to represent the interests of real, live democrats abroad.
I think they are going to find they have lost a lot of overseas voters over this. All they will have left will be college students doing a year abroad, or fresh-faced graduates on short-term Peace Corps larks.
RO has unfortunately been missing promised dates. I suppose it is because of the quantity of types of plaintiffs, which is large, and the complexities of getting someone to stand out on a limb.
Last of the facebook posts said it would be filed in May.
@foo: If DA don’t yet realize how many voters they’ve lost over this issue, then they are bigger fools (or tools) than we imagine. Ever since I started pointing out that I am a lifelong Democrat (who has never missed a single election) who has abandoned the party over FATCA and CBT, I’ve noticed countless others saying the exact same thing. If they don’t see it, they’re blind. There is a local DA branch where I live, which I plan to join, just so I can kick up a loud fuss. I might also join the local RO, and let them use my defection as a propaganda tool. Though I don’t trust the Republicans either. I can very much imagine them pushing for territorial taxation for corporations, while leaving us humans behind. In reality this issue has turned me into a loose cannon rather than member of any party.
The number of submissions from individuals seems quite high to me. I grew up with the image in my head of that scene from Mr Smith Goes to Washington where the bulging mail sacks of letters come in, but when I started using congressional archives, I learned fast that very few people interested in an issue write proper, individual letters to Congress. A good portion is form letters and now form e-mails.
I completely agree. Parties are quite good a purging members who no longer fit what they want the party to be. A moderate northeastern Republican friend was booted out of the Republicans for being a RINO (Republican in name only). The Democrats are definitely treating their citizens abroad like DINOs at best.
Actually, both parties treat us lousy. The Republicans are in the majority and yet we continue to get items like this:
“Tax Committees Approve Health Care Tax Credit. Members of Senate Finance and House Ways & Means committees voted to extend the Health Coverage Tax Credit (HCTC) for American workers who may be negatively impacted by foreign trade”…”Both of the tax-writing committees aim to pay for the extension by eliminating the refundable portion of the child tax credit for American taxpayers living abroad who claim the foreign earned income exclusion under Section 911 of the tax code.”
I suppose that they would say that this group doesn’t have to be treated the same because they are already taking advantage of a provision that is only available to people living abroad, but the chance of such people being fatcats is zero.
@Jac Dak  Nice one sneaking in the Wanted posters for Ginny & Gwen. Hopefully that will get their attention. The rest of us went for letters when Billboard format would have been more impactive.
@Jac Dak[222.8] Nice tribute to Roger Conklin by resubmitting his submission.
I sent in two but only my one directed more at Australia registered. I wanted to impress the point of US infringement of sovereignty of other nations through their tax polices and treaties.
Re Democrats Abroad. Just more evidence that the Democrats need to be slammed. At least they put out some good research on impacts of FATCA. In regards to their Safe Harbor Exception, they say nothing about excepting unreasonable FBAR reporting/penalties. And by creating a class of bona fide US residents in various countries, this just creates more questions and bureaucracy for FFI so the intended relief from FFI discrimination would likely not be lifted.
Any nominations for ‘Best of’ letters?
Thank you, Shadow Raider and Calgary, for this post. I can see that I’ll be doing a lot of reading in the next few days. I’m sad to see that the Richardson/Kish submissions are at the very bottom and I sure hope the senators get that far!
I sent in about 10 mostly ones I have cited that show unfairness as (sent but not printed ) the one below questioning Exit Tax. Can we all pay in $$ from long ago
FYI This tax was officially repealed in 1953.
In December 1931, the Reich Flight Tax was implemented as part of a larger
emergency decree with the goal of stemming capital flight during the unstable
Interbellum period. After the Nazis seized power in 1933, the Nazi government
largely used the tax to confiscate assets from persecuted people (mostly Jews)
who sought to flee the Third Reich. This tax was officially repealed in 1953.
Also net worth of $2 million is from 2004 ???? Should now at least be 2.5
Creation act of 2004 amended Section 877 again. Under the new law, any
individual who had a net worth of $2 million or an average income tax liability
of $139,000 for the five previous years who renounces his or her citizenship
is automatically assumed to have done so for tax avoidance reasons and is
subject to additional taxes. Furthermore, with certain exceptions covered
expatriates who spend at least 31 days in the United States in any year during
the 10-year period following expatriation were subject to US taxation as if they
were U.S. citizens or resident aliens.
Inflation Calculator 2015 – Dave Manuel
Inflation calculator, current as of 2015, that will calculate inflation in the
United States from 1774 until the present day. … a) How much the money from
the year that you chose is worth today. …. $1 worth of 2004 dollars is now
Also had a good 6 page cut and paste from many blogs including Kim Beazley’s email (not included)
I have also read that some people have not seen theirs. Thus I believe that some submissions are missing.
Coming in to the reform, prior to submissions, (R) Sen Enzi’s aid responded to me that they were not going to reform individual international tax
“The working groups have to identify “bipartisan” issues and for that reason there might not be widespread agreement on some of the FATCA issues”
Those were code words meaning that the committee was required to reach concensus prior to reform ideas being brought up.
Our massive quantity of letters have broken through that one party’s prejudice and forced RBT and anti FATCA anti FBAR to the forefront.
I am happy that in the Individual submissions got to cite the following points of view
GOODBYE, UNCLE SAM?
HOW THE FOREIGN ACCOUNT TAX
COMPLIANCE ACT IS CAUSING A DRASTIC
INCREASE IN THE NUMBER OF AMERICANS
RENOUNCING THEIR CITIZENSHIP
The American Chamber of Commerce letter to the tax treaty people here in Australia.
Many of the points cited by the ex ambassador (with solutions) who is now the CEO of AMCHAM will be music to many older AU/US duals about to retire. It was written to the tax treaty division in Aussie I have talked to them nice people I believe they see our point.
Common sense tells me something will be done BUT then again common sense is NOT that common
Sorry did I state common sense
@JakDac “Common sense is not so common.” (Voltaire)
Bernard Schneider suggests a long term expat’s departure tax to be back-dated to when they actually departed the US, but also suggests there be no amnesty for those who might have incurred US tax since they departed. (“Proposed Regime” para 6).
Unless I’m missing something, isnt this essentially double taxation, which these changes are supposed to eliminate?
Unfortunately DA’s on the same page as the National Tax Advocate, Nina Olson, in that they both seek ways in order to make CBT work – DA with carve outs for compliant non-residents, Olson with more funding. The good news is that under the current conditions neither option is very viable. I guess a lot depends on whether the SFC has the guts it takes to make sweeping changes in a real effort to reform, or will continue tinkering with the whole mess…
@bubblebustin “The only difference between death and taxes is death doesn’t get worse every time Congress meets.”
I hope the submissions will make more of a difference than ours to Parliament did. However, I fear it could get worse–especially with the total lack of common sense or even basic respect.
That quote about death, taxes and Congress is from Will Rogers.
Polly – I agree with you. The US case should be filed now/in May. I think that is their plan (I hope so)
The one labeled AMCham is good.
Also one from the Australian Superannuation fund
I can’t pick one over the other. The larger ones I’m putting aside for reading later (ACA, DA, Bernard Schneider, etc.). Meanwhile I continue to be impressed with the individual submissions. So many people put such a genuinely good effort into what they wrote and I feel I owe it to them to read each and every one … over the next few days. If nothing else we now have a larger volume of testimonials to draw from the next time a committee asks for submissions. The anti-CBT/FBAR/FATCA movement is growing like a snowball. It will eventually become too big to ignore or to store away on a shelf hoping it will just melt away.
@calgary411, Thanks for putting these news on a separate post.
@JakDac, I used a free add-on for Firefox called Down Them All. It allows you to download all links on a page without having to click every link. I made two new folders (individual and international) and saved all links in each folder respectively. To search in PDF files, I used Adobe Reader: edit, advanced search, show more options, match any of the words. I typed the keywords and selected the folder to search. The result shows the number of files with matches.
I also agree that this automatic search didn’t catch all relevant files, as some of them didn’t include the keywords. But it gives a minimum estimate.
Good point, EmBee — I too will read the submissions of each person who has taken the time and effort to submit. Special thanks to each of them.
It make look like a submission from Ethan Scwalbe but it is actually an 8 page submission from the American Chamber of Commerce in Japan.