The Grassroots Corner October 9th, 2024

TRUMP SUPPORTS ENDING DOUBLE TAXATION OF OVERSEAS AMERICANS

         Last week, Republicans Overseas confirmed that President Trump “has personally approved the policy of ending the double taxation of overseas Americans. Republicans Overseas worked with the Trump campaign to secure this historic policy statement.” Since most Americans will never move outside the United States, why does that matter?

            Americans share a unique tax burden with the citizens of only one other country, the African country of Eritrea. Americans who live outside the United States not only have to file a tax return in their host countries, but they also have to file a U.S. federal income tax return merely because of their citizenship. German citizens who live in New York, for example, who maintain no residence in Germany and derive no income from Germany need only to deal with our I.R.S. They are free from their German tax authority, the Finanzamt.

            This U.S. extraterritorial tax reach has several harmful effects:

•        It discourages foreign companies from hiring Americans abroad to help them with foreign investment in the United States.
•        It discourages U.S. companies from sending Americans abroad to help them with exports.
•        It makes life difficult for overseas Americans through the Foreign Account Tax Compliance Act "FATCA." Because of FATCA, foreign banks prefer not to open accounts abroad for U.S. Citizens. They want to avoid subjecting themselves to U.S. regulatory oversight.
•        It gives American citizens abroad the worst of both tax worlds. Tax-free events in the host country may be taxable by the I.R.S., and tax-free municipal bonds in the U.S., for example, are taxable in the host country.
•        It causes U.S. companies to engage in “inversions” and other corporate gymnastics. Burger King, for example, decided to swap places with its Canadian subsidiary, Tim Horton’s, to avoid paying corporate income tax on its foreign subsidiaries. Burger Kings now belong to Tim Hortons, so Burger Kings in the United States pay corporate income tax only on their U.S. operations, and Burger Kings outside the United States need only to deal with their host countries.

           So, let’s tie this development into the FAIRtax. What would be the best way for President Trump to avoid double taxation of overseas Americans? The answer is the FAIRtax. The FAIRtax levies tax only on services and new tangible goods consumed in the United States. Purchases outside the United States are only its subject matter if one permanently brings the item into the United States. Then, it would be subject to tax on its fair-market used value.

           You can read the press release of Republicans Overseas here: https://republicansoverseas.com/ending-double-taxation/. FAIRtax is non-partisan and does not support or oppose political parties or candidates. However, we welcome developments that help FAIRtax, no matter where they originate.

           I would love to hear your news about any proposal to eliminate the income tax on overseas Americans.
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🇺🇸   Call For Pictures & WriteUps - We need more of you to send in pictures and news. If you have something to share, please send your material to me, Jim.Bennett@FAIRtax.org, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.