We note this letter to White House Chief of Staff Mark Meadows requesting Trump sign an Executive Order implementing a range of reforms to provide regulatory relief for Americans abroad.
We have this response to the initiative.
In summary -
The proposed Executive Order does not provide reasonable relief for Americans abroad. It does not seek simplification or elimination of taxation filing from abroad. It does not seek relief from FBAR reporting. It does not seek the elimination of double or punitive taxation of income from foreign sources. It does not seek TCJA relief for small businesses registered and headquartered abroad.
Instead, the proposed Executive Order asks for further TCJA support for companies exporting their goods abroad, and for FATCA relief for high net worth individuals living in the United States who would like to hide their income abroad.
Perhaps a future request for an Executive Order might include reforms such as these that we believe would materially improve the lives of Americans abroad who continue to suffer serious personal and financial harm from tax and foreign financial account policy and regulation that discriminate against us.
- Simplified taxation filing for Americans abroad and an exemption from taxation filing for income they generate abroad (Residency Based Taxation);
- FATCA reforms to eliminate the foreign financial accounts of Americans living abroad from all FATCA reporting and end the banking lock out. This reform, embodied in the Overseas Americans Financial Access Act introduced by Rep Carolyn Maloney in each of the last 2 Congresses, ensures the law can still be used to charge US based Americans caught hiding untaxed income in offshore accounts, while ensuring that Americans abroad are able to bank and invest in the countries where they live;
- Relief for small businesses registered abroad from the TCJA transition taxes. Including them in the TCJA transition tax exemption will prevent the destruction of many thousands of companies owned by Americans living abroad;
- Inclusion in the Foreign Earned Income Exclusion of the income of those Americans abroad living on foreign provided social welfare, retirement, disability, unemployment, parental, etc benefits, in order to prevent double taxation.
- Furthermore, Democrats Abroad supports the Commission on Americans Living Abroad Act, introduced by Rep Carolyn Maloney in each of the last 4 Congresses and co-sponsored by Rep Don Beyer in the 116th Congress. More information here: https://www.congress.gov/bill/116th-congress/house-bill/4363
Democrats Abroad
Taxation Task Force