DemsAbroad Tax Reform Recommendations for the Biden Agenda

Democrats Abroad has published a submission in response to the Senate "Creating Opportunities Through a Fairer Tax Code" hearing.  Our submission outlines our tax reform priorities and recommendations for inclusion in the American Jobs Plan/Made in America Tax Plan and American Families Plan.  Click here to download our submission.   Supporters of Tax reform for Americans abroad are encouraged to submit their own statement.  Information is here.

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On April 26 2021 the Senate Subcommittee on Fiscal Responsibility and Growth held a hearing entitled "Creating Opportunities Through a Fairer Tax Code.  It canvassed views on ways to create opportunities for every American, build a more equitable economy and invest in the future prosperity of the U.S.   

The hearing placed particular focus on three approaches to funding the American Jobs Plan and American Families Plan.  Congress is searching for revenue to pay for the physical and social infrastructure investments that will pull the economy and American families out of the financial devastation wrought by the COVID pandemic.

Into this fiscal reality Democrats Abroad has proposed a group of reform recommendations to ease the tax and tax filing burden placed on Americans abroad:

  1. A tax filing exemption for Americans abroad compliant with financial account reporting requirements who owe zero U.S. tax. This reform fits into the aims and proposed provisions of the American Families Plan.
  2. An exemption from GILTI taxes on the profits of controlled foreign corporations owned by Americans abroad compliant with foreign financial account reporting requirements who have income under $400,000. This reform fits into the proposed provisions of the Made In America Tax Plan.
  3. Updates to the Report of Foreign Bank and Financial Accounts (FBAR) including: the indexation of the FBAR reporting threshold for inflation; creation of an FBAR filing threshold for Americans abroad that is five (5) times higher than the indexed threshold; the elimination of FBAR and FATCA filing-duplication; modification of the enormously out-of-proportion penalties for non-willful neglect to file FBAR reports; and reinstatement of the option to paper-file the FBAR. 

Further, we re-affirm our support for an exemption for Americans abroad from FATCA reporting of the financial accounts in the country where they live and pay tax.  We believe these financial account reporting reforms fit into the proposed provisions of the American Job Plan/Made In America Tax Plan and are sensible updates to tax enforcement policy recently bolstered by the Corporate Transparency Act.

Democrats Abroad will work hard to persuade Congress to enact these reforms but we know that tax reform for Americans abroad will happen when enough of us contact our members of Congress and demand it.  If you care about tax reform for Americans abroad this is a GREAT OPPORTUNITY for you to submit a statement of your own to the members of Congress who will be drafting legislation which could include it.   Click here for information for submitting your own statement.    Make it personal to you, your situation and your family to make it powerful.  The deadline for sending submissions is 2 weeks following the date of the hearing, which is Tuesday May 11th.  

DEMOCRATS ABROAD TAXATION TASK FORCE