Today (11/16/2017) the floor of the House passed the House tax reform bill. The earlier version is here .
Today also the Senate Finance committee passed the Senate tax reform bill. See link
Do not yet have the final versions of either bill but suspect that we are not helped in the bills. Will post here final versions when they become available.
Listen to the C-span clip found by BB in which Residence-based taxation is mentioned by Golding and Brady in the House tax bill debate — none of this however, appears to have been incorporated into the House or Senate bills passed on 11/16/2017
Republicans Overseas (RO) continues to press on, to make changes in the final tax package that will help us. The fight is not yet over, but it continues, right from the beginning, to be an uphill battle — and the odds don’t seem very good right now. RO says: “Again we need to focus on the Senate side since this fight is far from over.”
Personally, it makes no sense to me to blame Solomon and the handful of people at Republicans Overseas for trying to make a change and, so far, failing. Yesterday a friend reminded me that there was this Ismene, who kept telling her sister Antigone that it was pointless to even “try”: “…but you’re bound to fail…No sense in starting a hopeless task…Go then, if you are determined, to your folly, etc. etc.” Antigone responded: “When I have tried and failed, [then] I shall have failed.”
Those who want to watch the “Markup” of the tax “reform” bill can watch here:
Representative Holding just gave his introductory comments. He discussed “territorial taxation” for corporations but there was no mention of “territorial” for individuals. This is significant because Rep Holding has advocated for the repeal of citizenship-based taxation for individuals.
So, they’ve spent the past five hours mouthing platitudes on both sides of the aisle, finally they’re getting down to business. Brady just offered some 33-page amendment with a bunch of bundled provisions. No one has any idea what’s in it, though apparently there’s some international tax provisions there (no idea if that includes TTFI, Doggett is right now complaining about international provisions in general, carried interest, and the Paradise Papers).
For anyone who doesn’t remember, Doggett’s the one who screamed about expats fleeing to golf courses in Bermuda during the debate on HIPAA back in 1996
Okay someone got a scan of the summary of the Brady amendment. International provisions are about corporate base erosion, nothing about TTFI
https://twitter.com/mikedebonis/status/927669672736116737
John Larsen (D-CT) is literally screaming and turning red
“The point of a John Doe summons, which is essentially what FATCA is, is to allow a whole class of individuals to be summonsed, in order to allow an authority to identify and bring to court the guilty few. Fruitlessly pursuing non-criminal members of the summonsed class would make it hard to justify the use of John Doe.”
I see, so THAT’S how FBAR was overturned. However, the IRS and US courts don’t know that FBAR was overturned, so they’re doing the same with FATCA. No matter how hard it is to justify the use of a John Doe summons to summons a whole class of non-criminals to bring to court the guilty few, that’s what they’re doing.
@ JapanT,
Re: “Please send again. I saw your email in my spam box in the few moments between deleting the entire mailbox and before it disappeared.”
I’ve re-sent you my e-mail with MuzzledNoMore’s contact info.
@Stephen and others
Is there an expectation that TTFI is NOT included eventually that there will be an explanation from RO as to WHY it was NOT included? I can always ask my own member of Congress who is a Democrat but I am almost certain of his answer(It was a “Republican” bill me and other Democrats had no influence in it).
Many of you know my opinion of Prof. Michael Kirsch which isn’t very good. But with Kirch at least you know where you stand. These guys in the GOP would seem to rather give the silent treatment.
Gotta give it to Solomon Yue for not toeing the party line. Even posting ACA interviews on RO’s FB page.
@Stephen Kish
Re: The Max Reed response to you vis-a-vis my suggestion that that the proposed should NOT be read to include the Canadian Controlled Private Corporations for the “one off 12% tax”.
Mr. Reed’s interpretation is characterized by a the notion that one section of the IRC can/should be divorced from the context in which it appears. Perhaps he is right. Perhaps not. But interestingly the IRS specifically warns that the individual sections of the IRC should be read in the context of the entire code (and therefore obviously the individual subtitles).
Specifically note:
https://www.irs.gov/privacy-disclosure/tax-code-regulations-and-official-guidance
The idea that a a move to territorial taxation for corporations (who have the opportunity to repatriate their earnings at a discount) should be applied to the individual shareholders of Canadian Controlled Private Corporations, is absurd.
interesting from American Expatriates FB group:
Mo Ebner: Suzanne Iclef Herman and if that doesn’t work i think it’s safe to say that if this is enacted it should be demonstrably possible to sue the US government about newly instituted rules that discriminate against a sector of US society on grounds of location rather than level of earnings. In fact the level of the taxes and the fact that the more you shovel back into the business the more taxes you need to pay would suggest that its geared towards stopping US citizens abroad from expanding their businesses in their place of abode. it should be easy to make a case that this should only apply to businesses that are being run by US citizens abiding in the US and moving their operations abroad rather than those expanding locally in the countries where they reside.
@Patricia
Not according to Heitor David Pinto, in response to whether it’s constitutional:
Yes, because it’s not actually a tax on foreign corporations, but a determination that their owners, if US citizens or residents, must include the corporations’ profit as their own income. This tax would not apply to nonresident citizens if they were not taxed on foreign income. I insist that the solution to CBT must be a removal of “citizen or” from the entire tax code.
Unfortunately we’ll have to debate this outside the ears of those in Congress, who apparently are incapable of listening.
Oops, should have had this in quotations:
“Yes, because it’s not actually a tax on foreign corporations, but a determination that their owners, if US citizens or residents, must include the corporations’ profit as their own income. This tax would not apply to nonresident citizens if they were not taxed on foreign income. I insist that the solution to CBT must be a removal of “citizen or” from the entire tax code.”
“The point of a John Doe summons, which is essentially what FATCA is, is to allow a whole class of individuals to be summonsed, in order to allow an authority to identify and bring to court the guilty few. Fruitlessly pursuing non-criminal members of the summonsed class would make it hard to justify the use of John Doe.”
“I see, so THAT’S how FBAR was overturned. However, the IRS and US courts don’t know that FBAR was overturned, so they’re doing the same with FATCA.”
No, FBAR is not at all similar to FATCA, nor is it similar to a John Doe summons. FBAR is a reporting requirement, a self-incriminating mechanism.
“No matter how hard it is to justify the use of a John Doe summons to summons a whole class of non-criminals to bring to court the guilty few, that’s what they’re doing.”
Of course. That’s what a John Doe summons is: all those in the target group are reported on, in order to enable the authorities to identify and bring to court the guilty few.
That’s why for the non-guilty majority, there’s no follow-up. For the non-criminals, the damage done by FATCA is not IRS pursuit; it’s the loss of data protection and the loss of equal access to banking services.
“For the non-criminals, the damage done by FATCA is not IRS pursuit; it’s the loss of data protection and the loss of equal access to banking services.”
BINGO!
To which I would like to add is every bit as dangerous as and more so than just getting hit with a fine, regardless of size.
““Yes, because it’s not actually a tax on foreign corporations, but a determination that their owners, if US citizens or residents, must include the corporations’ profit as their own income. This tax would not apply to nonresident citizens if they were not taxed on foreign income. ”
Ah…by treating the non-US-source profits as US-citizen income, it gets transmuted by CBT into US taxability.
It’s fiendishly clever. Fiendish being the operative word. No wonder Brady felt obliged to claim the TTFI proposal was “under consideration.”. They wouldn’t want to seem unsympathetic.
I suppose this is mainly to prevent US-resident tax evaders from incorporating their businesses under non-US law to avoid the tax.
I remain sceptical as to their chances of getting the thing passed.
“Ah…by treating the non-US-source profits as US-citizen income, it gets transmuted by CBT into US taxability.
It’s fiendishly clever. Fiendish being the operative word.”
Ummm, yeah.
Better bet on more of the same.
“…it’s not actually a tax on foreign corporations, but a determination that their owners, if US citizens or residents, must include the corporations’ profit as their own income.”
If under Canadian law the tax on this income from a Canadian corporation is simply deferred, the US ought to be unable to tax it because that would result in double taxation. And if Canada, like most other countries, refuses to give credit for US tax paid simply as a result of the Saving Clause, the taxpayer has no way to avoid the eventual double taxation. If the bill eventually passes, it should be possible to object to this double taxation by writing to the Competent Authority.
The Joint Committee Summary for the Tax Reform Bill has now been released (see link below). There is new text suggesting that the 12% one time tax applies to ALL shareholders of foreign (local to us) corporations — not just the big foreign subsidiaries of domestic corporations. US persons are given eight years to pay up.
The text on page 253:
From:
https://www.jct.gov/publications.html?func=startdown&id=5031
If should find it simply unbelievable that the USA is working out ways to tax foreign businesses by using US citizens as Trojan horses, but I believe it. The USA is a thief.
This is exactly why any American expat who owns a private business, no matter how small, has no other choice other than to renounce.
There are a multitude of other reasons as well, to include non-recognition of tax deferred retirement plans, banking problems, double-taxation etc, that ALL ROADS LEAD TO RENUNCIATION.
The biggest thief on the planet.
http://www.zerohedge.com/news/2017-11-06/john-mccain-confirms-tax-reform-doa-senate
Quote from article:
“Controversially, it will also add an excise tax for corporations involved in cross-border payments that has drawn the ire of the US business community and its army of lobbyists.”
The problem with TTFI is that it makes no distinction between residents(who probably should be paying taxes on all of their income where they reside) and non-residents(who should only be paying taxes where they reside).
My comments are not directed at RO. They have done a great job lobbying for us. In my opinion the republicans in congress are using us, lumping us in with super wealthy US constituents, residents who want to protect their foreign income from taxation. I’ve always thought that.
If TTFI were completely off the table (meaning no tax exemptions for residents with foreign income), does anyone out there honestly think the republicans will do something for non residents only???
https://www.theguardian.com/news/2017/nov/06/bernie-sanders-paradise-papers-leak-international-oligarchy
Quote from article:
“Further responses to the Paradise Papers came from the Democratic leader in the US Senate Chuck Schumer, and the ranking Democratic member of the Senate finance committee, Ron Wyden. In a joint statement they accused Republicans in Congress leading the push towards a reform of the tax code of failing to close egregious loopholes revealed by the leaks.”
I think the worries about the 12% tax can be forgotten….
I just wrote a “hair on fire” letter to my recent connection at our Minister of Finance’s office.
In closing,
“Mr Hughes, my husband and I are both Canadian citizens at birth. There is nothing inherently wrong with dual citizenship, but when a country uses it citizens as Trojan Horses to steal from the economies of other countries, Canada cannot stand idly by – especially when it’s its own.”
@Marie
“In my opinion the republicans in congress are using us, lumping us in with super wealthy US constituents, residents who want to protect their foreign income from taxation.”
I agree. Why would politicians all of a sudden start serving the will of the people or any other altruistic goal? No, it’s pure self-interest.