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Trump tax bill just might include the end of citizen based taxation
| Published: | 26 Oct at 6 PM |
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In spite of recent news reports to the contrary, Republican lawmakers are believed to be considering measures linked with residency-based taxation for US expats.
According to Republican leader of the House’s Ways and Means Committee Kevin Brady in an interview for the Financial Times, lawmakers are carefully looking into the controversial issue after the case for change was put forward by lobbyists for Republicans Overseas. Should the long-awaited change take place, it’s likely to benefit millions of US expats living and working overseas.
By law, expatriates whose foreign earnings are less than about $100,000 are not required to pay US tax liabilities, but income up and beyond that level leaves them open to double taxation charges from both the host country and the USA. Should the required changes be made in Trump’s tax bill, they would only benefit American expatriates drawing six-figure salaries and upwards.
In his interview, Brady told the FT that lawmakers are now taking a possible shift away from citizen-based taxation of expats to a residence-based system levying tax only on monies earned in the USA. The call for change to expat taxation has gathered momentum since it was made clear the new tax bill would grant equivalent changes to US businesses’ foreign earnings, and it’s now being strongly supported by US Chamber of Commerce lobbyists.
The group’s take on the issue is that taxing foreign income is damaging to American managers working with US exporters’ overseas affiliates.
White House budget office director Mick Mulvaney is also in support of residence-based taxation, saying it’s a good thing for US businesses to be able to encourage talented professionals to take positions overseas. Another convincing argument for change was given by US Chamber tax official Caroline Harris in a letter to Congress, stating the taxing of overseas income is significantly undermining US exporters’ global competitiveness.
According to Republican leader of the House’s Ways and Means Committee Kevin Brady in an interview for the Financial Times, lawmakers are carefully looking into the controversial issue after the case for change was put forward by lobbyists for Republicans Overseas. Should the long-awaited change take place, it’s likely to benefit millions of US expats living and working overseas.
By law, expatriates whose foreign earnings are less than about $100,000 are not required to pay US tax liabilities, but income up and beyond that level leaves them open to double taxation charges from both the host country and the USA. Should the required changes be made in Trump’s tax bill, they would only benefit American expatriates drawing six-figure salaries and upwards.
In his interview, Brady told the FT that lawmakers are now taking a possible shift away from citizen-based taxation of expats to a residence-based system levying tax only on monies earned in the USA. The call for change to expat taxation has gathered momentum since it was made clear the new tax bill would grant equivalent changes to US businesses’ foreign earnings, and it’s now being strongly supported by US Chamber of Commerce lobbyists.
The group’s take on the issue is that taxing foreign income is damaging to American managers working with US exporters’ overseas affiliates.
White House budget office director Mick Mulvaney is also in support of residence-based taxation, saying it’s a good thing for US businesses to be able to encourage talented professionals to take positions overseas. Another convincing argument for change was given by US Chamber tax official Caroline Harris in a letter to Congress, stating the taxing of overseas income is significantly undermining US exporters’ global competitiveness.
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