Taxation

The Democrats Abroad Taxation Task Force (TTF) was formed to a) research US tax policy as it affects Americans living outside the US and b) consider, develop and execute initiatives aimed at enacting reforms that resolve adverse impacts.

We believe the 115th Congress has an opportunity to enact common sense reforms that clarify and simplify filing and make the tax code fairer for all Americans.  Our support for any tax reform – and certainly any package of reforms - will depend on how it aligns with our Democratic Party values.

We do not believe tax reform should be used to re-structure the federal government by starving programs that conservatives don’t like or that benefit indigent, elderly or otherwise vulnerable Americans.

We support reforms that help reduce inequality, boost opportunity and raise enough revenue, predominantly from those with the greatest ability to pay, to meet public needs. 

DA Taxation Leadership:

| Taxation Task Force Chair
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    News

    SURVIVING A TAX SCAM-SOAKED HOLIDAY SEASON

    Thursday December 28, 2017

    Dear Leaders and Colleagues,

    The Taxation Task Force will start off our last message to you for this exhausting year with an enormous THANK YOU for supporting our campaigns and advocacy initiatives.  We will be publishing a timeline of the year-that-was that demonstrates the many and various ways Democrats Abroad leaders and members worked to bring our tax filing and financial account reporting problems to the attention of our elected representatives.  It’s something you can refer to when discussing the importance of our organisation to the Americans abroad community.  

    Further, we can assure you that due to this enormous outreach there wouldn’t be a member of Congress on Capitol Hill who doesn’t know that there is a laundry list of ways in which the U.S. tax code discriminates against Americans abroad and that the Americans abroad community is determined to make them change that.

    Thank you again for all you did to make this happen.

    See below for our further notes to you on:

    - the end of the tax reform legislative process;

    - the response of companies so far to the new tax code;

    - the remarks published by Rep Dina Titus in the Congressional Record about the need for tax reform for Americans abroad;

    - the FATCA Repeal lawsuit making application to be heard by the Supreme Court;

    - the tax reform clean-up bill coming in the next few months; and

    - the new Taxation Task Force strategic plan.

    Or just go enjoy your holiday knowing that we Democrats have an enormous opportunity to regain control of both houses of Congress in 2018 using the horrific tax scam the GOP has just perpetrated on every American bar those amongst the financial elite. 

    We look forward to working with you next year to advocate strongly on behalf of Americans abroad and to generate the biggest turnout ever of overseas voters for Democratic candidates in elections right across the country.

    Democratically yours,

    DEMOCRATS ABROAD TAXATION TASK FORCE

    Taxationtf@democratsabroad.org
    Julia Bryan -ex-officio (Czech Republic)
    DeeDee Gierow  (Sweden)
    Rebecca Lammers (UK)
    Carmelan Polce – Chair (New York and Australia)
    Michael Ramos (Australia)
    Joseph Smallhoover (France)
    Orlando Vidal (UAE)

     

    Post Script:  It is with great sadness that we learned this week of the passing of Stanley Grossman of DA UK, a valued member of the FBAR/FATCA Task Force from its inception in 2011 through 2015.  There will be many memorials for Stanley, as he certainly deserves.  We on the Task Force will remember him very dearly for many things, including his passion, commitment, humour and enormous determination.  No one pushed harder than Stanley for us to explore every advocacy avenue possible to promote our tax reforms for Americans abroad. 

    What a sad year for us, in February losing our darling Joe Green, who was the founding chair of our tax advocacy team, and now Stanley.  We will build on their work as a tribute to them and are grateful for your help in doing so.

     

    Tax Reform in 2017 is done

    At this stage there has been no shortage of reporting on the Tax Cuts and Jobs Act of 2017.  You can read about what’s in it here and perhaps establish how it will impact you here.  Or not, since the provisions of the tax code impacting Americans abroad set up a different set of rules for us.  American Citizens Abroad, our colleague organisation fighting for reforms to laws and regulations that harm Americans abroad, has published a preliminary statement on the act as it generally impacts Americans abroad.

    Through our lobbying on Capitol Hill we have identified a group of lawmakers who we think will go to bat for us when we try again in 2018 to reform the way Americans abroad are taxed.  We hope you will again work beside us.

    How corporate America is celebrating tax reform

    The GOP has lined up a few American companies to profile their use of the tax cuts they’ll be enjoying from now on (the media companies will also be celebrating the Trump repeal of Net Neutrality and the banks will also be celebrating the Trump destruction of the Consumer Finance Protection Bureau).  But increased wages and worker bonuses are far in the minority.  Many more companies are using all that cash, as expected, to buy back shares.  No wage increases.  No staff bonuses.  Big paybacks to share holders.   

    Rep Dina Titus goes on Record supporting tax reform for Americans abroad

    Rep Dina Titus (D-NV) has been a great friend of Democrats Abroad for many years.  We have always receive a warm reception in her office and she has supported our work to reform tax, voting, citizenship and other matters that seriously impact Americans abroad.  We are delighted and grateful for her statements in the Congressional Record drawing attention to the need for tax reform for Americans abroad.

    FATCA Repeal lawsuit promoters make application to the Supreme Court

    As noted earlier this year, the lawsuit brought by Citizens United lawyer Jim Bopp on behalf of 7 Americans including Senator Rand Paul challenging the constitutionality of the Foreign Account Tax Compliance Act was rejected by the Sixth Circuit court of appeal for lack of standing.  The lawsuit proponents are now asking the U. S. Supreme Court to hear the case.  The Taxation Task Force does not believe their request will be granted but we will, again, be watching the case very closely.

    A 2018 Tax Bill to fix the 2017 Tax Bill

    A very small team of Republican tax writers worked behind closed doors for just a few months to prepare the bill just voted by Congress into law.  It is no surprise, therefore, that those at the IRS charged with implementing the bill have a lot of work to do before the provisions can be implemented.  Further, tax lawyers, policy analysts and return preparers warn the bill contains changes to business deductions that could result in a lot of aggressive tax structuring and unintended consequences.  These will require the GOP Congress to pass another bill to fix the mistakes.   Incompetence by the GOP tax writers may result in another opportunity for Democrats Abroad and other groups representing Americans abroad to lobby further for reforms, including Residency Based Taxation.  We will certainly keep you apprised.

    We go back to the drawing board

    The Taxation Task Force will be taking a well-earned break over the holidays but we are already thinking about what our 2018 tax advocacy strategy should look like.  We’re going back to the drawing board, starting with a clean sheet of paper and re-building our program of initiatives – including both grassroots campaigns and Capitol Hill advocacy.

    We have already welcomed a new member, Rebecca Lammers of DA UK, who has a background in social media and communications.  That may give you some insights into what we are planning next.

    Questions or Comments

    As always, we welcome your questions and comments.  Please contact us on taxationtf@democratsabroad.org

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    Year in Review

    Democrats Abroad Taxation Task Force 2017 Year in Review

    The DA Taxation Task Force ("Task Force") has had a frantic but productive year.

    For the first time in over three decades Congress would be working on a complete overhaul of the tax system. We saw this is our best chance for really pushing our case for Residency Based Taxation as well as continuing our work on a Foreign Account Tax Compliance Act ( FATCA) fix.

    • April 25 - Rep Carolyn Maloney, co-chair of the House Americans Abroad Caucus, introduces HR2136 “The Overseas Financial Access Act” which calls for the exemption of FATCA reporting by Overseas Americans.
    • May 15 – The House Oversight and Government Reform Committee holds a hearing on FATCA.  While Democrats Abroad's request to provide testimony at the hearing was rejected, we did make this submission to the Committee, and and a further submission in response to a request by the chair to provide three recommendations for remedying FATCA’s adverse consequence.
    • May 18-19 - Congressional Door Knock that occurred just after then 2017 Global meeting in Washington DC (this is our presentation on Tax Advocacy to the Global Meeting) included discussions about FATCA.  This statement was included in the Door Knock Leave Behind Pack.
    • May 27 – Rep Carolyn Maloney re-introduces HR 2710 to establish a Commission to study the impact of Federal laws and regulations on Americans living abroad.
    • June - DA’s 2017 Residency Based Taxation campaign is launched with a Congressional CallStorm asking members of Congress for support for Residency Based Taxation
    • July 17- The DA submits to the Senate Finance Committee our recommendations for reforms to tax laws that have grave financial and personal impacts for Americans abroad, including a switch from Citizenship Based Taxation to Residency Based Taxation. You can find the submission here.
    • September – Task force launches the Non-Resident Taxpayer Research Project, a survey of the tax filing and reporting experience of Americas living abroad.
    • September 29 –Task Force holds global Tax Advocacy Webinar to update members on the tax reform process and DA’s plans to advocate for Residency Based Taxation. These are the presentation slides.
    • October 3 – DA makes a further submission to the Senate Finance Committee calling for Residency Based Taxation. You can find the submission here.
    • October 10 – DA publishes the results of the Non-Resident Taxpayer Research Project: Can We Please Stop Paying Twice?
    • October – Task Force organizes another Congressional outreach campaign and CallStorm calling for Residency Based Taxation, ahead of a Capitol Hill Door Knock by the Task Force.
    • October 17-18 - Task Force goes to Washington as work on tax legislation is heating up, to meet with both Democrats and Republicans and advocate for Residency Based Taxation. We distributed our “Can We Please Stop Paying Twice?” research report, a one page Report Summary, and a document Making the Case for Residency Based Taxation.
    • November 7-9 - Task Force returns to Capitol Hill to lobby for Residency Based taxation, meeting with both Senators and House members in about 40 offices and distributing further documentation on how Residency Based Taxation might be implemented.
    • November - Task Force organizes a November Congressional outreach campaign for activists to push for Residency Based Taxation to be included in the package of tax reforms.
    • December – Task Force organizes a last ditch Congressional outreach campaign for activists to call their members of Congress asking them to reject the disastrous, all-for-the-rich tax bill drafted by Congressional Republicans with no input invited from Congressional Democrats.
    • December 19th Congresswoman Dina Titus, (D-NV1), submitted an extension of Remarks into the Congressional Record slamming the GOP Tax Scam and calling out congress for not addressing the issues of double taxation and filing difficulties for Americans abroad.
    • December 21: Rep Jamie Raskin, (D-MD8), submits an extension of remarks into the Congressional Record condemning the GOP Tax Scam and admonishing Congress for not addressing the issue of Citizenship Based Taxation which has inflicted so much damage to Americans living abroad.

    By December 21stThe Republican Tax Scam was passed by both houses and was ready to be signed by Donald Trump.

    On December 22nd Donald Trump signs the GOP tax bill, HR1 Tax Cuts and Jobs Act, in to law.

    At the start of 2018 the Taxation Task Force will be building a new tax advocacy strategy, incorporating both grassroots activism and Capitol Hill advocacy. 

    We would like to thank all of you who supported our efforts by making endless calls to your Members of Congress. Your calls have definitely made a difference! The offices we visited confirmed they have seen an uptick in the number of emails and calls they have received about the tax problems faced by Americans abroad. 

    We have another opportunity to persuade Congress to address the urgent need for a switch from Citizenship Based Taxation to Residency Based Taxation - in the “fix up” bill it will need to pass to address problems with the Act passed in such haste. But we have a lot of work to do.  We look forward to your on-going support.

    DA Taxation Task Force
    Taxationtf@democratsabroad.org
    Julia Bryan – ex-officio (Czech Republic)
    DeeDee Gierow (Sweden)
    Rebecca Lammer (UK)
    Carmelan Polce – Chair (New York and Australia)
    Michael Ramos (Australia)
    Joe Smallhoover (France)
    Orlando Vidal (UAE)

     

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    December Tax Action Pack

    Tax Reform Status & What's Next

    Yes, our worst fears have been realized – both houses of Congress have produced bills that vastly favor corporations and the wealthy and well-connected; they blow out the deficit and foreshadow cuts to critical federal programs; they won’t grow the economy or bring back jobs from overseas; they are unlikely to inspire businesses to hire more people and pay them better; and they completely neglect the Americans abroad community.

    But the fight’s not over. This week the House and Senate will form a Conference Committee to reconcile discrepancies between the bills they each passed, meaning we have one more chance to stop Congress before it's too late  — and we need everyone's help!

    Please contact your elected representatives by phone AND email to tell them we need a better tax plan for working Americans.


    Call your Congressional Representatives today. Tell them to fight back against the Trickle Down Tax Scam, or vote NO when the bill comes to the floor.

    Find phone numbers of your representatives: HOUSE –  SENATE

    . . . . . . . . . . . 

    Sample script

    My name is  _________________.  I vote in [your district/state] and I live in [name of country].  Although I live abroad I am deeply concerned about US tax policy and the impact it has on the welfare of the country.  I’m very disappointed at the process Congressional leaders have taken to rush through tax reform and I am utterly appalled that they have chosen to prioritize tax cuts for corporations, the wealthy and the well-connected over tax cuts for working class Americans.

    I do not and will never believe in Trickle Down Economics. 

    We all know it is a fraud – the only mystery is why Congressional leaders think that we will accept it anyway.  I do not.

    I urge the [Senator/Congresswo/man] to fight through the Conference process for a better deal for working Americans.  I urge [her/him] to vote NO if the bill that comes to the floor repeals the individual mandate and explodes the deficit because of the enormous tax cuts for corporations and wealthy Americans who do not need them.

    Lastly, we Americans abroad have been left out of tax reform entirely.  We will continue to suffer under the existing system that subjects us to taxation both in the US and our country of residence, subjecting us to enormous filing cost and complexity. 

    We may be abroad but we are not absent from the debate - or the ballot box.  Please fight for hard working Americans no matter where they live.  Please fight for a better tax package for us all and vote NO in the Conference bill doesn’t provide it.

    Thank you very much for your time and for your support. 


    Follow up each call with an email.

    Use this link to message elected officials from the easy-to-use Democracy.io platform: http://bit.ly/aBetterTaxPackage
    You must use your USA voting address.

    . . . . . . . . . . . 

    Sample language

    I vote in [State-Congressional District] and I live in [country of residence].

    Although I live abroad I am deeply concerned about US tax policy and the impact it has on the welfare of the country.  I’m very disappointed at the process Congressional leaders have taken to rush through tax reform and I am utterly appalled that they have chosen to prioritize tax cuts for corporations, the wealthy and the well-connected over tax cuts for working class Americans.

    [If you want to highlight a particular issue that concerns you: I am especially concerned about (see resource links below for details)]

    No matter how many times I hear it, I will never believe the tax cuts Congress is giving to large corporations and wealthy Americans – who don’t even need them – will trickle down to people like me.   In fact, my fear is that in the next few months Congress will compound the problems caused by this tax package by making drastic cuts to programs like Medicare, Social Security or other federal programs that help the most vulnerable among us.

    [Personal story about someone who relies on a federal program that will be jeopardized, if you have one.]

    Further, the bill includes no provisions whatsoever to address the tax problems of Americans who live abroad.  Filing taxes on income earned abroad is incredibly complex, expensive and unjust.  Many of us pay hundreds or thousands of dollars for help filing the forms that show there is no tax to pay.  Those of us who do owe are paying tax on the same dollar of income to both the US and our country of residence.  Every American abroad would like to stop paying twice.

    [Personal story about your tax situation, if you please.]

    If the US had a system of residency-based taxation, like nearly every other nation, then I’d still be required to report my US-based income to the IRS, but not the income I make in and pay tax on to [name of country]. 

    This tax package doesn’t help me or any working class American.  In fact, we know that it was designed to please political donors and that’s what really hurts.  Please fight for a better tax package for us and not them.  Please vote NO on if the tax bill that comes out of the Conference Committee repeals the individual mandate and explodes the deficit because of its enormous tax cuts for corporations and the wealthy.

    Thank you.

    Name

    USA voting address

    City, Country of Residence


    Resources

    Reference and background details

    No time to quit! 

    Sign up to receive special updates on Democrats Abroad’s tax advocacy work:   Click here:  www.democratsabroad.org/taxation

    Share this information with Americans abroad that are as concerned as you are about the cost, stress and inefficiency of reporting income and financial accounts abroad.

    Give to support the tax advocacy work of Democrats Abroad by clicking on this link and scrolling down to Tax Reform Advocacy. Three giving levels available: $25, $50 and $100

    Vote from abroad in every election in which you are eligible. It’s the best way to show our members of Congress that we are abroad but we are not absent. 

    Background on Residency Based Taxation (RBT)

    Residency Based Taxation is a system of taxation where a nation imposes tax on income generated within its borders.  Citizens of a nation with Residency Based Taxation pay tax on income in the place where their income was generated.  If they live and generate income abroad then their offshore income is taxed abroad and not taxed by the nation of their citizenship.

    All developed nations have a system of Residency Based Taxation except the United States.  The U.S. tax system is known as Citizenship Based Taxation and it causes enormous hardship for Americans living abroad.  They strongly favor a switch from Citizenship Based Taxation to Residency Based Taxation.

    We are asking for:

    • An exemption from reporting income generated in our countries of residence;
    • Straightforward criteria for establishing eligibility for the exemption;
    • No overly punitive exemption application processes or costs;
    • Provisions to prevent high net worth migrants from using offshore residency as a tax avoidance mechanism;
    • Americans living abroad exempted from reporting income generated in their country of residence would still report their US-source income;
    • Americans living in the US would not be exempted from reporing income generated outside of the US.

    Further, Democrats Abroad reaffirms its request for the establishment of a Commission on Americans Abroad to study and reform laws and regulations that have unintended adverse consequences for us (H.R. 2710) and for an exemption for Americans abroad from reporting on the financial accounts we hold in our country of residence (H.R. 2136). 

    Democrats Abroad and other online resources on Residency Based Taxation (RBT):

    For more information message us at TaxationTF@democratsabroad.org 

     

    december_tax_pack.jpg

     

    Click the thumbnail above, or this link to download in PDF format.

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    Nov 30th Weekly Action - Stop the Republican Tax Scam

    Each week Democrats Abroad posts an issue for our members to work on. This week's action focuses on pushing the Senate Republicans to vote no on the tax scam bill currently on the floor. For more information visit our action page today!   

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