11 thoughts on “Petition Against the Transition Tax”
Thank you, muzzled for posting. FYI Monte Silver, the petition’s creator, was born and raised in Canada but now lives in Israel. He has US Citizenship. Good to see he’s teamed up on this with another great Canadian, John Richardson.
I hate to be Donnie Downer but I am not signing it. Until businesses get on the bandwagon for RBT nothing will change. My reasoning is that us ordinary working stiffs can only afford so much money to the cause. Businesses have much more to lose so maybe they will join the fight with their support and money. Also when the governments where these businesses are located start losing the tax money from that 15 % repatriation tax, they might start acting too.
Here’s what I’ve written elsewhere about this effort:
IMO, this is a band-aid when major surgery is needed to remove extraterritorial taxation from the US tax code. However, given the short deadline for compliance, this band-aid may be helpful. By specifically exempting non-residents from another small part of the tax code, it may also serve as a small wedge and an example of why taxing the residents of other countries is harmful.
The transition tax as applied to companies owned by the residents of other countries is a massive extraterritorial tax grab by the US. Unfortunately, it was enacted without enough time for implementation. The first instalment is supposedly due in 5 weeks, but the IRS has yet to issue forms or guidance.
Of course – forms or guidance are irrelevant if the tax doesn’t apply. While there are arguments as to why this tax shouldn’t apply to residents of other countries, there is also all the “advice” from the compliance industry that US shareholders must pay this tax even if it bankrupts them. This petition asks for a remedy that the compliance industry cannot ignore and should be supported.
As I have said elsewhere, this may blaze a new path to change.
It is focused on administrative change, not legislative change.
While the word “petition” is used I may apply “e-mail campaign.” The request is to send a form letter to 7 e-mail addresses.
This is different than the RO petition as that is only signing one’s name up to that in agreement.
Yes, it’s petitioning those who can affect change, vs signing a petition that only goes as far as someone’s willing to take it.
The language of the transition tax on retained earnings may confuse in the language used.
The tax was to be on retained earnings. This might sound like a tax on a pile of cash sitting there.
Retained earnings is simply the company’s accumulated profits, not distributed to shareholders. This still does not mean retained earnings = a pile of cash sitting there.
Lets say a company pays off the principal of a loan (as opposed to interest on a loan which is an expense and reduces earnings). This money then goes to the bank and not the shareholders, but still shows in the retained earnings account. The account that gets reduced to pay off the loan is the cash account.
Lets say a company reinvests in the business out of profit. This money then goes to suppliers and not to the shareholders, but still shows in the retained earnings account. The account that gets reduced is the cash account.
Democrats Abroad has decided to carry the petition:
Congress is working on an Omnibus appropriations bill to approve spending for this year that must be passed no later than 23 March. This matter is on, we understand, a lengthy list of Tax Cuts and Jobs Act problems that need to be addressed.
Is it known who drew up the lengthy list?
Good and bad news here. The good is that the “transition” tax has been delayed two months, and the extension is automatic for non-resident US taxpayers.
Responding to the Sec. 965 “transition tax”: A “reprieve” until June 15, 2018:
“The bad news is that the IRS is now on record as saying this applies to people who are individuals living abroad”.
It’s been suggested that “expats start demanding from your Treasury to give the US Treasury an earful.” Apparently the US Treasury has received an earful from the French Treasury and it’s made an impact. Anyone who is effected by or concerned about the US Transition Tax on small businesses where they live should contact the appropriate departments within their home governments.
My Canadian MP, Hedy Fry’s office has suggested Canadians contact the Minister of Finance, with copies going to the following Ministers and your MP:
Minister of Foreign Affairs
Represents the riding of University—Rosedale (Ontario)
Statements in the House of Commons
Mandate letter | High resolution photo
Contact information
chrystia.freeland@parl.gc.ca
House of Commons
Ottawa, Ontario
K1A 0A6
Telephone: 613-992-5234
Fax: 613-996-9607
François-Philippe Champagne
Minister of International Trade of Canada
and Member of Parliament for Saint-Maurice–Champlain
Thank you, muzzled for posting. FYI Monte Silver, the petition’s creator, was born and raised in Canada but now lives in Israel. He has US Citizenship. Good to see he’s teamed up on this with another great Canadian, John Richardson.
I hate to be Donnie Downer but I am not signing it. Until businesses get on the bandwagon for RBT nothing will change. My reasoning is that us ordinary working stiffs can only afford so much money to the cause. Businesses have much more to lose so maybe they will join the fight with their support and money. Also when the governments where these businesses are located start losing the tax money from that 15 % repatriation tax, they might start acting too.
Here’s what I’ve written elsewhere about this effort:
The transition tax as applied to companies owned by the residents of other countries is a massive extraterritorial tax grab by the US. Unfortunately, it was enacted without enough time for implementation. The first instalment is supposedly due in 5 weeks, but the IRS has yet to issue forms or guidance.
https://twitter.com/FixTheTaxTreaty/status/971096020238065664/photo/1
Of course – forms or guidance are irrelevant if the tax doesn’t apply. While there are arguments as to why this tax shouldn’t apply to residents of other countries, there is also all the “advice” from the compliance industry that US shareholders must pay this tax even if it bankrupts them. This petition asks for a remedy that the compliance industry cannot ignore and should be supported.
As I have said elsewhere, this may blaze a new path to change.
It is focused on administrative change, not legislative change.
While the word “petition” is used I may apply “e-mail campaign.” The request is to send a form letter to 7 e-mail addresses.
This is different than the RO petition as that is only signing one’s name up to that in agreement.
Yes, it’s petitioning those who can affect change, vs signing a petition that only goes as far as someone’s willing to take it.
The language of the transition tax on retained earnings may confuse in the language used.
The tax was to be on retained earnings. This might sound like a tax on a pile of cash sitting there.
Retained earnings is simply the company’s accumulated profits, not distributed to shareholders. This still does not mean retained earnings = a pile of cash sitting there.
Lets say a company pays off the principal of a loan (as opposed to interest on a loan which is an expense and reduces earnings). This money then goes to the bank and not the shareholders, but still shows in the retained earnings account. The account that gets reduced to pay off the loan is the cash account.
Lets say a company reinvests in the business out of profit. This money then goes to suppliers and not to the shareholders, but still shows in the retained earnings account. The account that gets reduced is the cash account.
Democrats Abroad has decided to carry the petition:
https://www.democratsabroad.org/remedy_repatriation_gilti_taxes
What do you think?
This bit seems interesting:
Is it known who drew up the lengthy list?
Good and bad news here. The good is that the “transition” tax has been delayed two months, and the extension is automatic for non-resident US taxpayers.
Responding to the Sec. 965 “transition tax”: A “reprieve” until June 15, 2018:
http://www.citizenshipsolutions.ca/2018/04/02/part-6-responding-to-the-sec-965-transition-tax-a-reprieve-until-june-15-2018/
“The bad news is that the IRS is now on record as saying this applies to people who are individuals living abroad”.
It’s been suggested that “expats start demanding from your Treasury to give the US Treasury an earful.” Apparently the US Treasury has received an earful from the French Treasury and it’s made an impact. Anyone who is effected by or concerned about the US Transition Tax on small businesses where they live should contact the appropriate departments within their home governments.
My Canadian MP, Hedy Fry’s office has suggested Canadians contact the Minister of Finance, with copies going to the following Ministers and your MP:
Minister of Foreign Affairs
Represents the riding of University—Rosedale (Ontario)
Statements in the House of Commons
Mandate letter | High resolution photo
Contact information
chrystia.freeland@parl.gc.ca
House of Commons
Ottawa, Ontario
K1A 0A6
Telephone: 613-992-5234
Fax: 613-996-9607
François-Philippe Champagne
Minister of International Trade of Canada
and Member of Parliament for Saint-Maurice–Champlain
Statements in the House of Commons
Mandate letter | High resolution photo
Contact information
Francois-Philippe.Champagne@parl.gc.ca
House of Commons
Ottawa, Ontario
K1A 0A6
Telephone: 613-995-4895
Fax: 613-996-6883
Minister of National Revenue
•Mandate Letter
Represents the riding of Gaspésie–Les Îles-de-la-Madeleine
Contact information
Diane.Lebouthillier@parl.gc.ca
House of Commons
Ottawa, Ontario
K1A 0A6
Minister of Finance
The Honourable William Francis Morneau
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario K1A 0G5
House of Commons
Parliament Buildings
Ottawa, Ontario K1A 0A6
Send a message to the Minister: bill.morneau@canada.ca