Liberty and justice for all United States persons abroad

The Isaac Brock Society

Possible Good News About the Upcoming Congressional Decision

Posted on by Posted in Issues regarding US persons abroad 92 Comments
I felt this message from JC on another thread deserved its own post. Below is JC’s message containing important information relayed to him by Jackie Bugnion.
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Somehow I got on an e-mail distribution list. This was sent on 26 October. Posted here with permission.

Message from Jackie Bugnion

Hi everyone,

Last night I saw a statement of Brady published in Politico on his latest on tax reform. The last sentences is truly encouraging. The article is below. I understand “letting them pay taxes only where they live” to indicate RBT. Since the Ways and Means has announced that it will publish its legislative draft next week, the language is most likely already determined. There have been several proposals for tax reform of Americans abroad from various organisations. Let’s all get behind whatever Congress comes up with and show a united front. This is a one chance in a lifetime to improve the situation of Americans abroad. Please activate your networks in this sense.

Best,

Jackie Bugnion

This was at the end of a POLITICO e-mail, sent 25 October.
He[Brady] said the committee is considering an issue dear to U.S. citizens living abroad — letting them pay taxes only where they live — though no decision has been made.

Some additional e-mail trail, I will not disclose sender:
Just listening to Ari Fleischer on TV about the tax reform bill and he said something that I wasn’t aware of, but some of you might be: He said that once the bill comes out of W&M Committee it goes directly to a floor vote. There are no floor amendments or changes permitted. Thought this is something to look for.

92 thoughts on “Possible Good News About the Upcoming Congressional Decision”

  1. The post emphasizes the importance of supporting ANY change(s) that will benefit those affected by “non-resident taxation”.

    You might find the following post on Facebook of interest:

    https://www.facebook.com/groups/AmericanExpatriates/permalink/878493905650016/

    The post includes, the following statement about the DA view of the RO TTFI proposal:

    I received this from my regional DA: I’ve recently seen several social media posts on AP Facebook pages with links to a petition for the new Territorial Taxation for Individuals (TTFI) proposal being pushed by Republicans Overseas. Carmelan and the Taxation Task Force have circulated several messages on this, but I wanted to make it absolutely clear for all our CC leaders that TTFI is not the same as the Residency Based Taxation (RBT) plan advocated by DA and does not promote Democratic principles.

    You may have seen a table produced by RO that compares TTFI to RBT. The key difference that emerges is that under TTFI the offshore earnings of Americans living in the US will not be taxable. RO’s plan would provide a windfall to the wealthiest of US-based Americans who are the most likely to be generating income abroad (or who can afford complex tax-structuring to make it appear that they are earning income abroad). This does not help ordinary, middle class Americans. But it is a tax loophole just waiting to be exploited.

    Of course, TTFI also benefits Americans abroad like our members who generate all or most of their income in their countries of residency – but this tax reform, which is so important to our financial lives, shouldn’t be held hostage to the tax ambitions of the top 1% of US income earners.

    These are the criteria we have established for a tax reform package and RBT model that we can support:

    Our support for any package of tax reforms will depend on how it aligns with our Democratic Party values.
    We will support common sense reforms that clarify and simplify filing and make the tax code fairer for all Americans.

    The provisions of the tax package must help reduce inequality, boost opportunity and raise revenue predominantly from those with the greatest ability to pay.

    The advantages of changing from Citizenship Based Taxation to RBT must primarily benefit ordinary Americans living and working abroad.

    The policy must include straightforward criteria for Americans abroad to use in establishing eligibility and should not obstruct freedom of movement.

    RBT should be revenue-neutral to the federal government and not significantly add to the federal deficit.
    RBT must not open tax avoidance loopholes or otherwise include avenues for high net worth taxpayers to abuse for the purposes of tax avoidance.

    We will not support reforms that restructure the federal government by starving programs that are important to national, community or individual well-being.

    TTFI obviously fails more than one of these criteria.

    Thankfully, DA has provided its members with lots of resources on RBT to reach out directly to your members of Congress and share with other interested Americans abroad. If you see posts on social media channels you manage advocating for TTFI or linking to the RO petition, please make it clear your members that this is not DA’s position and please point your members to the materials for DA’s RBT campaign, which our tax team is working tirelessly to promote. (Including by knocking doors in Congress this week!)

    Our RBT campaign materials include:

    RBT Campaign in a Box: http://bit.ly/2zi4XuP
    RBT Pamphlet: http://bit.ly/2zijRkT
    RBT Frequently Asked Questions: http://bit.ly/2zhiWkx
    Also of interest may be this recent survey DA conducted on the impact of current tax law on Americans overseas and our policy proposals for fixing these issues: http://bit.ly/2yhegND

    Please share these resources and survey results with your members, both to engage them in the campaign for RBT and so they understand the effort that DA’s tax team is making on their behalf to advocate for tax reform.

    The post has attracted a number of interesting comments.

    It seems clear that:

    1. DA is intent on opposing the RO proposal even it means that there is no relief for Americans abroad.

    2. DA does NOT in fact support tax changes for Americans abroad if the effect would be that even one Homelander would pay less U.S. tax.

    Incidentally, DA has NEVER offered any specific proposal for RBT. The only thing DA has done is explained why CBT is a problem for “some” Americans abroad.

    There is a reason that DA supporters are referred to as “Stepford Wives”.

    https://isaacbrocksociety.ca/2012/12/19/democrats-abroad-are-like-the-stepford-wives/

  2. @USCitizenAbroad, envy is a sin and you have highlighted the politics of envy.

    Their view is that we must punish the 99% because the 1% may get away with something.

    To that I say NO!!!!

  3. Polly: “Ah- lets not go off on each other. Lets save all the frustration, anguish and the aggressions for the perps.”

    Well said from a left wing Never Trumper. Yet Trump needs to devastate and drain the swamp in order for us to be free. Never did understand your hate for him. I love the guy and everything about him except his elementary lexicon. I’m not known for violence but I’ll gladly spring for the cost of Guillotines for the poisoned left.

  4. “under TTFI the offshore earnings of Americans living in the US will not be taxable”
    Huh? How can this be? You Iive in America and earn whatever – you get taxed on it. Never heard that one.

    @Proud Deplorable – and you are? A reincarnation of somebody I am supposed to know?

  5. @proud deplorable
    As a lifelong democrat and a renunciant, self preservation would have forced me into some strange bedfellows.
    But I cannot see that Trump would entertain TTFI as it would mean a downturn in foreign investment in the US and a loss of his proclaimed ‘love’ of the Delaware tax Havens.

  6. We are now overdue for Wilton to put in an appearance, discussing (in chronological order) the Constitution, Karl Marx, the Bolsheviks, and the Fair Tax.

  8. He said that once the bill comes out of W&M Committee it goes directly to a floor vote. There are no floor amendments or changes permitted.

    Good … if TTFI is in there … fingers crossed that it is. Just one more sleep before we find out if this bill is a trick or treat.

  9. EmBee, then what happens?

    If you believe Fox:

    “…If his schedule holds, the bill will next go to a so-called “markup” session next week, where lawmakers will review the legislation line by line. The bill will then get a final House floor vote the following week..”

  10. Some hint is that TTFI in legislation may be like “residence based taxation.” The attack is on what the name may imply. Details to be revealed.

  11. @ Stephen Kish
    Then what happens? Dunno. I haven’t even got our Canadian parliament figured out. “Markup” sounds like something a teacher might do for a teacher’s pet.

  12. RO’s plan would provide a windfall to the wealthiest of US-based Americans who are the most likely to be generating income abroad (or who can afford complex tax-structuring to make it appear that they are earning income abroad).

    Interesting.

    Works for a firm in Hong Kong “advising private fund sponsors on fund formation, fundraising, regulatory and compliance issues.”

    Maybe he’s right. That could increase the plan’s chances.

    It would be ironic if the Democrats’ zealous determination to find and tax every possible cent of US citizen income outside the US resulted in a brand new opportunity for US resident billionaires to shield offshore income from US taxation.

  13. It wont bother me if some 1 percenter homelanders find overseas tax havens even more enticing, as long as all the 99 percenter outlanders gain their freedom from US tax tyranny. Corporations already have TT and so should individuals.

  15. I won’t be celebrating yet. I’ll have to wait for my wife to get the funds together to renounce. The clause probably won’t be grandfathered and she’ll have to wait 5 years (It’ll probably take that five years just to gather a spare $3250 or whatever price they jack it up to and gather her returns from 2018 onwards for five years. But she’ll renounce and not look back. Because if the Democrats get back in, FATCA will be back…in yet another form. The DemonRats won’t be satisfied till they suck us all dry.

  16. EmBee: “It wont bother me if some 1 percenter homelanders find overseas tax havens even more enticing, as long as all the 99 percenter outlanders gain their freedom from US tax tyranny.”

    Absolutely! “Somebody” is going to “get away with it” no matter how the legislation is framed. What really bugs me is the “class detention” mentality that would rather punish the 99% than allow some fraction of the 1% to get let off the hook.

  17. @ MuzzledNoMore
    Those big fish (the 1 percenters) have the money and the chutzpah to wriggle off pretty much any hook. That’s why it’s easier for the IRS to concentrate on finding Nemo who has no money, no chutzpah and been completely stunned by the complexities of compliance.

  18. If TTFI is as described then even if it passes into law, it will not stand for very long; certainly wouldn’t last if another Democratic administration came into power. The reason being that the US Treasury would hemorrhage revenue as not just the 1%, but also the 10% and maybe the 25% (or more) take advantage of all the offshore companies that would set up in order to facilitate homelanders moving their investments offshore to low and no tax jurisdictions. This is such an obvious consequence of TTFI that I can’t imagine it hasn’t been considered.

    So, it would seem TTFI is meant to be a gigantic homelander tax loophole being brought in under the guise of providing relief to hard-pressed non-resident USCs. Democrats will, quite rightly, go bananas about this.

  19. Underneath the political to-and-fro, though, is the fact that America’s tax system is out of sync with that of other countries, and has to change. If this proposal goes through, then even though it may be changed again by a different administration, they probably won’t go back to what’s on the books now. Once CBT has been dislodged, it’s on the way out for good.

  20. @Plaxy
    Wishful thinking Plax. We always have to be careful that we aren’t so desperate that what we wish for becomes fact to us. Only time will tell.

  24. @EmBee

    Yes two more sleeps, but are we awaking to Christmas or an April Fool’s joke?
    I consider it an outright victory if CBT is challenged at all, regardless of whether it’s perceived to benefit only the 1%.

    On tenter hooks…

  25. Privet, Khaydi, tebe ne nuzhno boyat’sya nas. U nas uzhe yest’ vash uran, i Fond Klintona poluchil svoi den’gi. Dvigaytes’ dal’she, nechego zdes’ videt’, i my budem prodolzhat’ investirovat’ v SSHA, poka druz’ya Billa i Khillari uchastvuyut v lyubykh delovykh sdelkakh. spasibo

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