US expats given hope of lower tax bills
Republicans edge towards eliminating need to pay levies overseas and at home
published in the Financial Times
by Demetri Sevastopulo and Barney Jopson in Washington
You can read the article by answering a simple question that appears when the page loads. I cannot post the entire article due to copyright restrictions.
Here are some excerpts:
Millions of US citizens working overseas could see their tax bills lowered by an overhaul of the tax system as Republicans edge towards eliminating a requirement for American expatriates to pay taxes both overseas and in the US.
Kevin Brady, the Republican head of the House ways and means committee, which is drafting a tax reform bill, said lawmakers were considering the measure, which has been the focus of lobbying by Republicans Overseas, a group of party donors around the world.
“It is under consideration. They have made the case,” Mr Brady said in response to a question from the Financial Times at a Christian Science Monitor breakfast. “Lawmakers representing that area of the tax code have made that case.”
The US Chamber of Commerce, a business lobby group, has urged policymakers to consider US-only taxation for individuals, too, arguing that taxing foreign income hurts American managers at the overseas affiliates of US exporters.
Mark Mazur, who was the top tax official in Barack Obama’s Treasury department, said he supported the change, arguing that it was necessary to address the “inequity” of an expat paying tax on the same income to both the US and a foreign government.
“If you take two people, one works in London, one in New York, working for the exact same US multinational — if they make the exact same amount of money you might think they should be taxed exactly the same,” said Mr Mazur, who heads the Tax Policy Center.
Solomon Yue and Michael DeSombre are also mentioned in the article.
There are quite a few comments with JC doing Yeoman’s Duty.
“In my view, both governments got away with the FATCA IGA because it was limited to transfer of information, which didn’t do anyone any obvious tangible monetary harm. (Really it didn’t – or at least hasn’t yet. The many financial victims of compliance here essentially volunteered for it, whether persuaded by condors or their own naive sense of needing to obey US law.) If the government tried to facilitate the massive shift of personal wealth south of the border – which could certainly happen as a generation of dual citizens sold their Vancouver and Toronto houses for vast seven-figure sums – you’d see a bit more of a public backlash, I reckon.”
The information transfer is a much bigger threat than the monetary issue, in part because in includes funancial risk to those whose data has been shared.
As much backlash as there will undoubtably be when dual cituzens run into that problem, the backlash over the damage to Canada’s finacial sector would be far greater.
And again, who will be paying the money, people whom many “true Canadians” feel should have “just renounced” and saved everyone from this nightmare.
Japan T – My point is, it’s advisable to rely only on the documents. Life’s too short to worry about who once said what on an internet forum.
““In my view, both governments got away with the FATCA IGA because it was limited to transfer of information, which didn’t do anyone any obvious tangible monetary harm.”
More to the point, exchange of information is in the treaty. It’s the automatic aspect that’s new. Isn’t that what’s being challenged by the Canadian lawsuit?”
Isn’t more the automatic exchange of info with out first needing to prove probable cause that the person whose data is sought actually committed a crime the issue. I doubt too many feel that Canada should not hand over info of people who are under reasonbke suspicion of having commited a crime in the US.
@Placy
Documents, while important, are less important to what actions are taken because of them. If we hope to understand what is likely to happen in the future, we must look at what actions were taken and have at least some expectation similar actions will be carried out following similar documents.
To further my pount on what has been saud un the past, I keep being told that what I think is likely to hapoen will not happen, only to see it happen. Why then, should I or anyone put much stock into the words of those who continue to say something will not happen because this or that piece of paper says it will not?
“As for Norman’s comment, come on, you’re telling me that for 40 years now, US citizens with landed immigrant status in Canada needed valid US passports or they were at risk of being chucked out? I find that hard to believe. Or that landed immigrants whose US passports expired were in the country illegally? I doubt that.”
My landed immigrant certificate said exactly that. The wording was something like “Must hold valid passport.” US citizens had been exempt from that requirement but the exemption ended around 40 years ago.
I can’t find rules online now though.
“Ten years ago nobody here had passports if they only went to the US.”
That was if the person was a citizen of the country they were living in and only temporarily visiting the other country.
“(Hell, thirty years ago we crossed the border without any ID at all.)”
That was if you crossed at an unattended crossing. Or I suppose it could be at an attended crossing if the inspector knew everyone in town.
“Isn’t more the automatic exchange of info with out first needing to prove probable cause that the person whose data is sought actually committed a crime the issue.””
That’s what automatic exchange of information means. The treaty allowed for exchange of information about a resident of Country A when requested by Country B. AEOI just automatically reports everybody fitting stated criteria.
“To further my pount on what has been saud un the past, I keep being told that what I think is likely to hapoen will not happen, only to see it happen. Why then, should I or anyone put much stock into the words of those who continue to say something will not happen because this or that piece of paper says it will not?”
Why indeed. Look up the piece if paper and see for yourself what it says.
“Look up the piece if paper and see for yourself what it says.”
I’ve seen pieces of paper that said what the 5th amendment says. Too bad they were pieces of paper. If they’d been engraved in gold, they could be melted down for bullion value.
Who cares what the American fifth amendment says?
I do.
“Who cares what the American fifth amendment says?”
More to the point, if the US followed what pieces of paper (US law) had written upon them, none of this whole mess would be in existance.
“I do.”
I don’t.
If the US followed the 5th amendment, there would be no need for the lawsuit. All of us could spend whatever time and money we have on this on other things of our chosing.
Believe me, it’s a waste of time and spirit fretting about what the US could have done, should have done, might have done. What they did do is FATCA, and IGAs were the result. It is what it is and has to be dealt with, worked around, evaded and/or resisted as individual circumstances permit.
And taken into account when anticipating what they will do in the future. Having run roughshod over all these laws they already have, we need to count on them doing the same with what ever dicuments you put up as defense.
The requirements for banks are very clear. No need to speculate, just assume that banks will want to know tax-residence, and non-exempt accounts will be reported.
Yes, and just like before the IGA was signed, many thought it would be a small number of us who had their accounts reported, so too will many more be affected than is currently thought by most.
And this data sharing is a huge problem.
Why not let it go? Stop obsessing about who might think what. Pointless.
Because that is how we got here. Not enough people wanting to see what has happened, what was happening and what was likely to happen. And this is how things will continue to get get worse
Far from it. There’s a condor around every corner, ready to try to scare people, and supplementing the condors’ efforts there’s all the Americans who are quick to tell you the IRS can and will freeze your bank account, take over your home and sleep with your wife if you don’t hand over as much of your money as the IRS rules seem to suggest, or could be interpreted as suggesting.
There’s no shortage of scary stories.
If people were paying attention the condors would also not be a problem to anyone.
You’ve lost me there.
If enough knew what the US gov was doing and stopped it, the condors would not have any utility to USCs abroad.
Or, in other words, if there were enough of us who knew that FATCA was in the works stopped it, then what would the condors have to scare USCs with?
There is no scenario in which expats could have stopped FATCA.
Oh! First, I did not say only expats. Second, are you not aware of what is happening in the US in regards to tax reform? Too little, too late in my opinion but does show that expats with help from sympathetic homelanders CAN get things done.