Democrats Abroad Submits Recommendations to the Senate Finance Committee on Tax Reform

On 17 July Democrats Abroad made a submission to the Senate Finance Committee on tax reform in response to an invitation from SFC Chairman Senator Orrin Hatch. These are key comments in summary.

Our submission is attached here.

Democrats Abroad joins the rest of the Americans abroad community in our strong support for: 

  • Reforms to the tax system that help reduce inequality, boost opportunity and raise revenue to meet public demands primarily from those with the greatest ability to pay; 
  • Residency Based Taxation, as a replacement for the current U.S. system of Citizenship Based Taxation;
  • Safeguards in the Residency Based Taxation system to ensure that offshore residency is not abused by those seeking primarily to protect their earnings from U.S. taxation, therefore causing an unfair and odious erosion of the U.S. tax base;
  • Relief from foreign financial account reporting for the ordinary accounts of Americans abroad in our countries of residence that we use to pay our bills and save for the future; 
  • Reforms to a litany of tax code provisions that inadvertently discriminate against Americans living abroad that, even under a system of Residency Based Taxation, will continue to burden those who choose to carry on reporting their offshore income from abroad; and
  • Simplified and improved tax filing for Americans abroad, which would address the hardship of Americans abroad filing even following the implementation of Residency Based Taxation for those who elect to continue to file.
Please contact Taxation Task Force Chair Carmelan Polce (cpolce@tpg.com.au) at any time with questions.