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.
FYI: A recent dialogue I had with AARO President, Lucy Stensland Laederich, on the AARO FB page:
I wrote: “Some here, including myself, believe that a lawsuit against CBT (challenge to Cook vs. Tait) could speed things up for RBT. Would AARO consider supporting such a lawsuit?”
Lucy Stensland Laederich wrote: “If you can tell me more about the lawsuit, Walt Sanchez, and I can put it to the board on May 18… Thanks!”
I wrote: “Thank you Lucy. A CBT lawsuit is still only in the discussion and brainstorming mode, mainly at Isaac Brock with some chatter at RO. Some Brockers are very much in favor of a CBT lawsuit, but others want to keep the focus on the ADCS FATCA suit. My sense is that once the fundraising for the ADCS FATCA suit is completed (over 400K out of 500K raised thus far) fundraising can begin for litigating CBT. I cannot speak on behalf of any of the ADCS board members nor can I speak on behalf of the Isaac Brock Society, which is really more of a movement than an organization. However, I can honestly say that the discussions about a CBT suit and the postings about the weaknesses of the Cook vs, Tait court decision are gaining momentum. In short, it is only a matter of time before a lawsuit is initiated. ADCS and Isaac Brock have been very effective with crowdfunding. Therefore, I do not think it would be premature to at least mention to your board the likelihood of a CBT suit being launched and explore the level of interest AARO may have in supporting it. Having said that, please have in mind that the web-based discussions at Isaac Brock about a CBT lawsuit are following a similar trajectory as the discussions that made the ADCS FATCA lawsuit into reality. The people at Isaac Brock, Maple Sandbox and ADCS are very committed and also very courageous.”
VERY well said, foo.
As much as I, as a Canadian in Canada am reluctant to support either party down there, I’m with the GOP only because I still have some confidence in the political process and they are making the right noises to me. I’d like to highlight this RO Facebook comment posted in their own defence when confronted with accusations that the Reps has been just as bad as the Dem’s throughout history when it comes to the government’s treatment of Americans abroad:
“Republicans Overseas passed RNC resolutions to repeal FATCA and to oppose CBT and Global FATCA. We raised money for FATCA lawsuit. We got one repeal FATCA bill introduced in the Senate. We are working on one more repeal FATCA bill in the House. We will file our FATCA/FBAR lawsuit within 30 days. We will turn FATCA and FBAR into Presidential election year issues by allowing expats to ask GOP Presidential candidates FATCA and FBAR related questions directly during one of the Republican Presidential Primary debates. Politically and legislatively speaking, we need to cripple FATCA and FBAR first in order to replace CBT with RBT. Please ask the same question of the Democrats Abroad, which is a member state of the Democrat National Committee. When Democrats control the White House, Obama is in charge of the DNC, not DNC Chairman. Obama still touts FATCA as the “global standard” in battling tax evasion. It means the Party of FATCA still considers all 7.6 million overseas Americans as “FAT CAT” tax cheats whose privacy rights and constitutional protections should be violated. By comparison, Republicans Overseas which is not a member state of the RNC has done and will do all the above for 7.6 million overseas Americans because it is the right thing to do.”
Worth heading over see comments and add
Spreading the word
I was fantasizing about exactly this just the other night. I plan to query RO about how to submit such a question, or (if required) join the audience as a questioner at one of the debates. I would gladly fly there and reveal my identity if I could have a shot at lobbing some pithy questions to the candidates (though I expect there are others at IBS who would be more eloquent).
That would be great, Barbara!
You and others can write to Solomon Yue about the possibility of participating at Solomon@fatcalegalaction.com.
Correct “less with less”
Lucy Laederich said…
Thank you so much for pointing me to this, Victoria- a little ray of (slightly vulgar) sunlight!
As you say, though, they didn’t get all the way, to an IRS that has to do more with less, or more frighteningly – as Commissioner Koskinen himself has said – “less with less”….
Vulgarity aside, however, I loved the song… and the deadly earnestness with which it is delivered!
May 3, 2015 at 10:28 AM
The you tube link is not streaming in certain countries thus the hbo link
Mike Bolton sings an interesting IRS song
After talking to a knowledgeable source re Expat tax
How about an Expat senator ?
Are we deemed MORE of an American IF we vote ?
@JakDac The Senate system is two senators per state, as US persons overseas number greater than many US states then 2 senators should be the go. Also a number in the House of Representatives.
Direct Senate representation would be good to help address the taxation without representation. However, I favor remedying the taxation without representation by removing the taxation part.
In five of the six years since Obama took office, we have seen significant increases in the number of wealthy U.S. citizens who have shed their U.S. passport
a third (36%) more than the number of people who gave up their citizenships in all of the last three years, of the Bush Administration (980 renunciations
Most of those people aren’t anywhere close to wealthy.
U.S. Expats now simply call, “The Letter.” It’s a letter wherein the bank informs their U.S. clients that they have 30 days (more or less), in which to find another place for their money, because the bank no longer able to deal with U.S. citizen customers
By the way, had the government demanded the exact level of detail from U.S. banks, as they demand from foreign banks, it would be clearly unconstitutional.
FATCA shows the short-sightedness and lack of business acumen in the halls of Congress
many U.S. expats are unable to pay their rent, electricity bill, or phone bill.
The politicians probably thought it was safe to ignore them, because most of them don’t vote in U.S. elections
The problem for we “home-landers”, as the expats refer to us, is that to be on one of those lists, you have to be a “covered expatriate”, which is a convoluted way of saying, “rich
According to the 2014 HSBC Expat Explorer Report (see page 4) those who earn more than $250,000 per year make up barely 1.25% of all U.S. citizens, but they make up 7.0% of all expats.
Expatriation for tax purposes has been called “Taxpatriation”
There was once a time, not so long ago, when a U.S. passport was one of the most valuable documents an international traveler could have. When you handed hotel clerks or airport personnel your U.S. passport, you used to be able to see an instant attitude of change from that of “working drone” to that of “respectful attendant”. If you had a problem and had to call the police, they would treat you with a heightened level of respect, as soon as they realized that you were American. But all that has changed.
Today, your U.S. passport gets you no special respect. In fact, in a terrorist situation, a U.S. passport is considered to be the second most dangerous document you can carry – right behind an Israeli passport.
Whistleblower – Informant Award
Regarding Useful links NOT up yet ?
Other Resources for Americans Overseas
I have posted this part of @Kevin Mulvany’s submission in several comment sections to articles:
When considering the situation of US citizens living abroad (especially long-term foreign residents), one must always have the following facts in mind. These US citizens:
Don’t partake in US society (in many cases, never have)
Don’t cost US society anything
Don’t ask US society for anything
Don’t benefit from any notable services and advantages offered to stateside Americans
Are not represented in Congress as a distinct group
The US has no business forcing its authority on its citizens who have left the country legally. Doing so constitutes an act of authoritarianism that is by all standards of measure shameful for a country that claims to be the leader of the free world.
I have heard and read supporters of CBT saying that overseas US citizens should simply renounce their US citizenship instead of changing the system. Their solution to the problem on the blackboard is not to reform the system but to get rid of its victims!
There is a mention of @Shadow Raider and The Isaac Brock Society.
Re Kevin Mulvaney
Another good point
The current US global fiscal inquisition is tantamount to nuking the ocean to catch a few great white sharks.
Ach! Wunderbar! That is an EXCELLENT submission. Bravo ShadowRaider!
Am I correct in less than two weeks we get to read the Senate recommendations ?
@JakDac, “Am I correct in less than two weeks we get to read the Senate recommendations ?”
Recommendation One: We are hanged.
Recommendation Two: We are burned at the stake.
Thats all I am expecting especially in light of Senator Hatch the other day.
Expats are HATED by homelanders…………….
And I used to be a good will ambassador.
I have apologized to my young children for saddling them with the curse of USC.
From two famous tax writers
Predicting what comes out of the Senate is not my forte, though I remain cautiously optimistic for some improvements.
Stalin famously mocked the Pope, saying “How many divisions had he got?”
How big are expat Americans’ campaign contributions? :-/
Unfortunately I have come across this homelander mentality: compromise to some middle ground, instead of removing the unconstitutional injustices all together.
Double taxation prevents Americans from building a future
This very good submission from Australia was up in the beginning, but was requested removed because of privacy reasons – ‘I don’t want it to come up when people do a google search for my name, as I am very sensitive to internet privacy. (I hadn’t realised it would be posted publicly when I wrote to the SFC.)’ Now posted under anonymous on the Australian page here at IBS.
A: “Let’s fix that dangerous hundred-foot-long bridge over the ravine before it collapses and kills someone.”
B: “What? No, you’re not raising my taxes for that, it’s too expensive.”
Coalition of professional stunt drivers: (writes check to politician)
Politician: “You both have very good ideas and I value input from all my constituents. So I propose fixing fifty feet of the bridge and adding motorcycle jump ramps. You’ll be able to cross the bridge as long as you hire a professional stunt driver for the jumping part, but we can’t be held responsible if you try to cross the bridge on your own.”
A: “What? That’s even more stupid and dangerous than not fixing it.”
B: “You bunch of greedy bastards, it’s your own choice to live over on the other side of that ravine, we’re willing to meet you halfway because you whine so much, shut up and accept our perfectly reasonable compromise already!”
Tony Abbott confirms US has no plans to send B-1 bombers to Australia, says defence official ‘misspoke’
Many comments flowing and only hours old
Americans living in Australia are already supporting this by default
This is clearly a Republican-rant organization and fully misrepresents the Dems Abroad which has been working on FATCA issue much longer than Repubs who only recently jumped on it for political purposes. DA favors country-of-residence-exemption because it is the approach that will get the the quickest real results . . . rather than the full-blown Constitutional attack which will take years, but get their right wingnut lawyer Bopp maximum press.
Further the Republicans dirty little secret is that the REAL tax avoiders putting funds overseas are Republicans residing in the US. Republican position appears to be that tax evasion is OK while Dems Abroad is working to get relief for regular overseas Americans (of both parties) who are not the purpose of FATCA in the first place.
And lastly, before castigating the Obama and Dems for this law for political purposes, last I saw McCain is a Republican.