Grover Norquist urges House Ways & Means Committee to include TTFI in bill markup

Grover Norquist, President of Americans for Tax Reform, has written a letter to Chairman Kevin Brady of the House Ways and Means Committee urging him to include TTFI in the tax reform bill’s markup.

Read the letter here. 


Cautious optimism among US expat reps over possible tax law changes

By: Helen Burggraf | 26 Oct 2017

Representatives for American expatriates in Washington have been expressing cautious optimism about the chances that the way such expats are taxed may be about to change, after weeks of lobbying that culminated this week in meetings with lawmakers.

Among them is Republican National Committee member Solomon Yue, who is also chairman of the Republicans Overseas, one of a number of organisations that have been actively urging Congress to use the opportunity of a tax reform bill to move the US to a “territorial taxation for individuals” regime, or TTFI – replacing the current system of taxing individuals on the basis of their citizenship.

Read the full article here.

Summary of Overseas Americans and Voters in 2016

According the State Dept., there are 9 million overseas Americans, not including overseas military service men and women (click here for Bureau of Consular Affairs overview).

614,553 (633,592 – 19.039) Uniformed and Overseas Citizens Absentee Voting Act ballots were returned in 2016, including 51,700 overseas U.S. military votes.

Military and Overseas Voting

  • In 2016, 930,156 Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) ballots were transmitted and 68.1 percent — 633,592 UOCAVA ballots – were returned. Of the UOCAVA ballots returned by voters, 19,039, about 3 percent, were rejected. Of these rejected ballots, nearly half were rejected because they were not received by election offices on time.
  • The number of ballots transmitted to overseas civilians increased by 23% from 2012 to 2016. Illinois, New Jersey and Washington are among the states that reported transmitting many more ballots to overseas civilians in 2016 than in 2012. Cumulatively, those three states accounted for an increase in about 40,000 ballots transmitted to overseas civilians.

The Military Postal Service Agency returned more than 51,700 voted ballots from military members to election offices (ballots are identifiable because of the kind of postage). The average military ballot return time was 5.1 days.

About 562,853 overseas Americans voted in 2016. Since 4.5 million overseas Americans are eligible to vote in 2018 and 2020, the potential to grow the overseas vote is huge.

RO and TTFI on the front page of the Financial Times

US expats given hope of lower tax bills

Republicans edge towards eliminating need to pay levies overseas and at home

Millions of US citizens working overseas could see their tax bills lowered by an overhaul of the tax system as Republicans edge towards eliminating a requirement for American expatriates to pay taxes both overseas and in the US.

Kevin Brady, the Republican head of the House ways and means committee, which is drafting a tax reform bill, said lawmakers were considering the measure, which has been the focus of lobbying by Republicans Overseas, a group of party donors around the world.

“It is under consideration. They have made the case,” Mr Brady said in response to a question from the Financial Times at a Christian Science Monitor breakfast. “Lawmakers representing that area of the tax code have made that case.”

Some 8.7m Americans live outside the US, excluding military personnel, according to the Association of Americans Resident Overseas.

For those expatriates, the first portion of their foreign earnings — about $100,000 in 2016 — is already shielded from US tax liabilities, but they have to pay tax on any income above that level to both the host authority and the US. The mooted change would therefore benefit those on six-figure salaries.

Republicans are striving to pass the first major overhaul of the US tax code since Ronald Reagan in 1986. They are looking at measures that would simplify the code, lower the corporate tax rate, make it less attractive for US companies to keep cash overseas, and changes that they say will help the middle class.

Mr Brady later told the FT that lawmakers were taking “seriously” the call for a shift from a citizen-based income tax system to a residence-based system that would only tax people on the income they earn in the US.

Republicans have already decided they want to make an equivalent change for business, switching to a “territorial” regime where most of US companies’ foreign earnings are beyond the reach of American tax collectors.

The US Chamber of Commerce, a business lobby group, has urged policymakers to consider US-only taxation for individuals, too, arguing that taxing foreign income hurts American managers at the overseas affiliates of US exporters.

In a recent interview with the FT, Mick Mulvaney, the White House budget office director, said he supported the shift to residence-based taxation. “It is something that I have advocated for as a member of Congress,” Mr Mulvaney said. “It is good for American businesses to encourage Americans to work overseas.”

Solomon Yue, vice-chairman of Republicans Overseas, this week submitted a petition with 3,027 signatures calling for the change to Shahira Knight, the White House official in charge of tax policy, and also to Mr Brady’s staff on the House ways and means committee. “We made inroads with his [Brady’s] chief of staff yesterday when we presented the signatures,” Mr Solomon said.

Michael DeSombre, an American partner at the law firm of Sullivan & Cromwell in Hong Kong who chairs Republicans Overseas, said the White House was also supportive. “The White House and the Republican National Committee support the proposal but are not going to push for it actively.”

James Brandell, a lobbyist helping the Republicans make their case, said Ms Knight said the White House “sees no policy problem” with the proposal, but urged them to focus on the House ways and means committee and the Senate finance committee which are writing the tax bill.

The White House acknowledged that Ms Knight had met with the Republicans Overseas team, but Raj Shah, deputy press secretary, said their account of the meeting was “not accurate”.

Caroline Harris, a US Chamber tax official, told Congress in a letter in July that taxing individuals’ foreign income “significantly undermines the global competitiveness of US exporters. No other country taxes its citizens working abroad, and any transition to a territorial tax system should take this into consideration and end this damaging practice.”

Mark Mazur, who was the top tax official in Barack Obama’s Treasury department, said he supported the change, arguing that it was necessary to address the “inequity” of an expat paying tax on the same income to both the US and a foreign government.

“If you take two people, one works in London, one in New York, working for the exact same US multinational — if they make the exact same amount of money you might think they should be taxed exactly the same,” said Mr Mazur, who heads the Tax Policy Center.

The US has tax treaties with more than 60 countries that to varying degrees reduce, but do not usually eliminate, the US tax burden on American expatriates.

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Heritage Foundation publishes article in support of repealing FATCA

by Patrick Tyrell, The Daily Signal

October 13, 2017

If you’re an American living overseas, Uncle Sam is making life hard for you—and he’s probably giving your bank a headache, too.

For one, the U.S. government often taxes the earnings you make outside the U.S., meaning you can be double-taxed—both by the U.S. and by your host country. But even if you don’t owe U.S. taxes, reporting your foreign earnings to the IRS can be expensive and complicated.

In addition to that, if you live overseas, your bank is probably quite annoyed at you and has an incentive to stop doing business with you.  Read more here. 

6,400 expat American signatures sought on petition to end citizenship-based tax

By: Helen Burggraf | 16 Oct 2017

As US lawmakers consider the relative merits of a package of proposed changes to the American tax code, a global network of expat Americans is calling on their fellow countrymen in Expatland to urgently sign a petition calling for the US to end its citizenship-based taxation regime. 

The petition calls for “territorial taxation for individuals”, or TTFI, to replace the current American system of taxing Americans for their entire lives, unless they renounce their citizenship, on the basis of their being American citizens.

Read the full article here.

Solomon Yue and Michael DeSombre deliver TTFI letters and petitions to the White House

Michael DeSombre (Left), Republicans Overseas Worldwide President, and Solomon Yue, Republicans Overseas Vice Chairman and CEO, met with Samantha Zager (Right), White House Associate Political Director on October 2, 2017.

On behalf of the White House, Ms. Zager accepted 1,744 letters/petitions to President Trump in support of including Territorial Taxation for Individuals in the Tax Reform Package being debated in the House and Senate. Ms. Zager was very impressed with our efforts, and we discussed the strategy for getting TTFI included in the tax reform package.

The next step is to petition Congress for the inclusion of  TTFI in the Tax Reform Package. Republicans Overseas will deliver your  TTFI petitions to the House Ways and Means committee and to the Senate Finance Committee in late October. Ms. Zager will facilitate RO meeting requests with the leadership and tax writers of the committees. Thank you for your participation!