Get your opinion delivered to President Trump: send it by Sept 30 to Expat’s POTUS-letter challenge at: taxreform@republicansoverseas.com
http://bit.ly/2fkikpw
Challenge 3 of your friends. And challenge them to challenge 3 of their friends.
This is the once-in-a-lifetime opportunity. Don’t blow it. Send it now. Let’s get rid of these unconstitutional impositions now
- Write a letter to President Trump using the sample letters below and send it to taxreform@republicansoverseas.com These letters will be hand-delivered to the White House on October 2, 2017.
- Sign the petition to have Territorial Taxation included in the Tax Reform Package. The petition will also be hand delivered to the White House on October 2, 2017.
Our submissions should number in the thousands
Reading a 20 Sep 2017 article on the above referenced website I am concerned to see that Republicans Overseas want to increase tax on non-residents aliens’ US-source income, rather than reduce tax on non-resident Americans’ US-source income. This does not affect the basic case for territorial taxation, but it will be an incentive for non-residents to shift investment out of the USA to avoid increased IRS taxes.
To quote “Currently non-Americans have very preferential (0-10%) tax rates on dividends, interest and capital gains earned in America while Americans are hounded by the IRS around the world at 38% tax rates on every penny earned outside of America … non-Americans should pay the same dividends, interest, and capital gains taxes as 322 million stateside and 9 million overseas Americans.”
The argument ignores the fact that the 9 million overseas Americans as well as non-Americans are already hounded at high tax rates by the country they live in, in addition to the hounding by the IRS. It also appears not to be aware that the treaties are 2-way, i.e. they benefit stateside Americans with non-US income. If enacted this measure could remove the very limited territorial taxation that is already in place, e.g. as per tax treaties with some countries for Social Security type income etc. More paperwork for all with most likely no change in bottom line total tax paid by individuals.
Not sure how to provide this feedback to the Republicans Overseas.
Well, I posted this to Forumosa.com, a site used (mostly) by foreigners living in Taiwan. And guess what I found out? “CBT” turns out to have another meaning other than “Citizenship-Based Taxation,” which I hesitate to spell out for very shame.
@fn0
What you note has been pointed out to Republicans Overseas multiple times already, but without effect. My own opinion is that this feature will entirely hole the proposal beneath the waterline within Congress. Hugely negative for the US because of the way its tax rises will massively deter inward investment into the US, from treaty and non-treaty countries alike. Congress cannot fail to notice that well ahead of adopting it.
But then, I am not a US citizen but merely one of the presumed evil US-tax avoiding non-resident alien investors that Republicans Overseas apparently despises so intensely.
http://isaacbrocksociety.ca/2017/09/12/call-to-action-from-republicans-overseas/comment-page-2/#comment-7996827
@fn0
I tried to point out on their website, the flaws (loss of inward investment, and negation of international tax treaties involving NRA pension and SS funds) in their proposal, but it required me to enter a US postcode and a US telephone number! I think they assume most Americans (those who have not yet renounced) only live abroad temporarily, and are willing to retain a link with the ‘homeland’. They seem to only want registered voter (Republican) opinions.
I don’t do twitter or Facebook , perhaps you can express your opinion there, but I doubt it would be well received.
Won’t this proposal with it’s risk of a loss of internal investment in the US (why pay 30% on gains if I can invest elsewhere and pay 10%) risk a US stock market crash affecting everyone??
This graphic by Republicans Overseas has been posted widely on Facebook today
https://www.facebook.com/republicansoverseas/photos/a.197014807148989.1073741828.187406564776480/738572006326597/?type=3
I find it somewhat inaccurate. First, the TTFI proposal does propose to tax foreign portfolio income earned by US residents, but not foreign active business income – this distinction is not reflected in the chart. Also, under current CBT, US source income earned by NRAs IS taxed – the issue is how you define “US source”. The current statutory definition includes interest and dividends paid by US resident companies, income effectively connected to a US business, and real property income including gain on the sale of real property; but gain on the sale of shares or bonds of US entities is not defined as US source income. Granted, the treaties do reduce the tax rate on US source income in some cases, RO proposes to tax all US source income at 30%.
The notes to the table state that double taxation can only be resolved by treaties – this is not quite true. The US does allow foreign tax credit for tax paid on foreign source income, even if there is no treaty in place. I believe most other countries using RBT do the same. What the treaties do is to resolve differences in sourcing rules – in addition to providing for reduced rates.
Some of the tweets and articles I’ve seen in the past few days claim that non-resident aliens are not taxed on real property income earned in the US. However, the US/Australian tax treaty (as one example) is clear that the US has the right to tax both income from real property located in the US and gain on the sale of that property. If the US is not collecting tax on gains on real property (or rents, for that matter), it is a question of enforcement, not new legislation.
@Karen: “I find it somewhat inaccurate.”
Understatement of the year. I especially like the parts where the spin doesn’t merely imply but more or less insists that only “foreign billionaires” would face tax hikes here. No mention at all of the effects on the millions of ordinary investors holding a vanilla S&P500 tracker fund in their meagre pension.
Honestly, this Facebook page makes Republicans Overseas look entirely unhinged.
Less than 300 letters/petitions have been sent to date (this morning). No one cares? Easier to complain and stew than to send a simple letter?
Sure, everyone can come up with lots and lots of reasons not to support the RO proposal, but for the very small minority of readers of this post who feel that the world would be just a little better off if the RO tax proposal (or something like it) were adopted, why don’t you send that letter today — and tell other readers that you have done so?
I renounced my citizenship but still sent a letter.
“Currently non-Americans have very preferential (0-10%) tax rates on dividends, interest and capital gains earned in America while Americans are hounded by the IRS around the world at 38% tax rates on every penny earned outside of America … non-Americans should pay the same dividends, interest, and capital gains taxes as 322 million stateside and 9 million overseas Americans.”
When I first saw this, I had a to read it a second time. It was not until I read it a third time that I realised I had actually read it right.
I thought the Republicans got it!
What a great move, yet more reason to get out of US investments along with the US dollar and of course US citizenship.
The USA has lost its bloody mind.
Just cut all ties, have nothing to do with it.
@Steven Kish
I have tried to post RO a letter on their website. The problem is they demand a US telephone number and postcode. I tried giving them an old US postcode etc but have have had no response, not even an automatic one.
IT IS easier and more effective to ‘complain and stew’ on Brock as BROCK is at least read by RO and by other influential sites, judging by the response from KYM at RO and the exposure Brock has had recently in the financial press.
http://isaacbrocksociety.ca/2017/09/12/call-to-action-from-republicans-overseas/comment-page-2/#comments
If this proposal goes through it would mean that NRA pension funds situated in the US would be taxed at 30% .
FOR EXAMPLE without a corresponding negotiated tax treaty my US University Hospital pension would incur a 30 + 32% (62%) tax rate. Tax treaties with other countries would be null and void and would need new and acceptable renegotiation.
This proposal hasn’t been thoroughly thought through and I caution many who in their desperation are ready to support it.
@ Mike
I have cut all ties…except my TIAACREFF US pension, I can’t extract that all except over 10 bloody long years!
I was able to send comments to Republicans Overseas by entering Zip Code 98230 (Post Office in Blaine WA close to the Canadian border). I don’t think they insisted on a phone number but I would have used my expired Skype number if they had. Anyway Solomon Yue from Republicans Overseas responded quickly with a defence of the existing Republicans Overseas position and apparently disputing or ignoring the facts that tax treaties go both ways benefitting stateside Amricans as well as overseas foreigners, and seemingly unaware that foreign countries tax worlwide income not just income from within that country. They would like to cancel treaties they believe give tax breaks to foreign billionnaires exploiting tax breaks at the expense of American citizens. Of course we know that the people hurt by the proposed changes will not be the billionnaires, just the folks on both sides with a few stocks and some state pension from the other country. It’s the same kind of thinking that produced FATCA. I think I’m done with thinking about this.
Isn’t one reason of the lack of letter writing because most people are safely under the radar and don’t want to put their names on anything related to the USA
I know a few accidentals here that I spread the word too but they will not put their names out there for any reason even to support something that might help. There is still more not compliant than compliant
Even though I have serious reservations about the specifics of the RO plan, I sent a letter supporting any change from CBT to my former Senators and Representative, with a copy to the RO email address. I doubt the RO proposal will make it into the tax reform legislation intact – too many powerful lobby groups will not like the way it discourages inbound portfolio investment. It is always easier to amend a provision that’s there than to add something completely new. If taxation of non-resident citizens isn’t in the draft legislation at all, it’s not likely to make it in via amendment.
@ UK Rose
Sadly I think you are right and it doesn’t help that there’s a recent article about “significant international tax investigations” being underway … interesting timing. The FearBAR bear is alive and being fed regularly so people will naturally want to keep a low profile but what a shame because this letter writing campaign is such a good opportunity.
Mark Twain, Stephen and Karen: I agree with you that, although the RO proposal may not be perfect we really MUST make this final 11th Hour effort to be heard. I am disappointed at the poor response so far but I do understand that most of the 8 or so million of us out here in the world are trying their best to stay under the radar. Frankly, I’m one of them, but I still sent a letter. I signed with a pseudonym and a dear friend sent it from her email address on my behalf.
An opportunity like this to truly make an impact on the course of history (to say nothing of bettering our own lives) doesn’t come around very often. If you don’t like RO’s proposal send your own, but PLEASE send something! All of us here want to see an end to CBT. Just tell them that.
Hi,
All letters are helpful, even if they must be signed anonymously.
Who cares what negative effects this might have on the U.S. financial system. Who is it that wants to go out and cheer for Oligarchs putting their money into the U.S. system? Are we dumb enough to stop our own better treatment for the benefit of some oligarchs who supposedly are keeping the economic system afloat?
Are people not going to protect themselves? Have we developed a new type of Stepford Wife?
@Mark Twain – I’ve renounced. Any treaty override in the tax reform proposal will affect me. While RO argues that their changes will affect foreign “billionaires”, the actual impact will be on anyone with savings. Just about every Australian will have exposure to US share markets in their superannuation and will, therefore, be affected by the additional tax imposed on portfolio income of NRAs.
However, I also believe that CBT is wrong. So I have written a letter (one that argues for any change from CBT rather than advocating the RO TTFI proposal) and emailed it to RO for inclusion.
@Mark Twain: “Who cares what negative effects this might have on the U.S. financial system.”
You don’t, and I may not either. But as I see it, the problem is that the US congress will care, and so reject the proposal entirely.
Of course, even if that is true, it might not be reason enough not to push for it. But pushing hard on something impractical can weaken the case for change. And that is the impression that Republicans Overseas are giving here.
This proposal was poorly thought through from the outset, and was never improved despite multiple opportunities to do so. The largest tragedy is that its flaws could have been fairly easily resolved. But rather than do that, Republicans Overseas is instead trying to sell to it Congress with the snake-oil promise of a huge tax rise, one that will not materialise but will in fact do more harm than good.
Worse still, the Republicans Overseas rhetoric on this, with all its empty spin and blathering about “foreign billionaires” and “gaming the US tax system” looks like it comes straight from the most extreme expat-hating side of the Democrat camp. The exact same sort of vitriol as mouthed by Sen Chuck Schumer and Sen Jack Reed. And that cannot be a good sign.
Here’s yet another tax reform survey, from the Republican National Committee. Not a word about CBT, of course. But we can all select “other” to every question and voice our opinions about what should be included in tax reform.
https://gop.com/official-tax-reform-survey/
Sorry, don’t where this should go so I am leaving it as a comment on the latest FBAR post I found.
Tax Court bars IRS from collecting under FBAR
By Roger Russell
Published January 16 2018, 11:59am EST
Thought some may find this important.
And then there is this.
IRS set to enforce passport denials for tax delinquents
By Michael Cohn
Published January 16 2018, 4:29pm EST
Here are the links to the articles Japan T found:
https://www.accountingtoday.com/news/tax-court-bars-irs-from-collecting-under-fbar
https://www.accountingtoday.com/news/irs-set-to-enforce-passport-denials-for-tax-delinquents
“Tax Court bars IRS from collecting under FBAR”
Unfortunately that’s not exactly what they did. The IRS tried to assess tax on unreported income, and only tangentially tried to use FBAR to allege that the IRS wasn’t constrained by the usual 3 year statute of limitations for its attempt to assess. Tax Court ruled that the usual 3 year statute of limitations applies. To repeat, the attempted assessment was for tax on unreported income.
Tax Court has ruled that Tax Court doesn’t have jurisdiction over failures to file FBAR, so when the IRS alleges that a person didn’t file FBAR the person can’t get relief from getting screwed. This is not affected at all by the ruling discussed here.
Damn.
But thanks for the correction, ND.