John Richardson has written a blog post about Joe Biden’s tax proposals which would DOUBLE the GILTI tax on overseas Americans. We have provided an excerpt below, but click here for the full post.
Joe Biden’s proposals (as reported by Tax Foundation) include:
1. Raising the US corporate tax rate to 28%
2. Raising the GILTI tax rate to 21%
Individual American entrepreneurs with CFCs have born the brunt of the GILTI Tax. It’s clear that the United States never considers the effects of its tax policy on Americans abroad. Any worsening of the GILTI regime will make an intolerable tax regime even worse.
It’s difficult to know precisely what the Biden campaign means when it decrees that the GILTI rate should rise to 21% (the top rate of US taxation). Absent the companion proposal to raise corporate rates to 28%, the GILTI rate could move from 10.% percent to 21% (doubling) by simply removing the Section 250 50 percent discount. This would effectively reverse the March 2019 Treasury relief that ensured that Americans abroad (in the context of a Section 962 election) would not be treated worse than corporations.
In any case, regardless of the mechanics, the Biden proposal to make GILTI more punitive, will have a disproportionate impact on individual Americans abroad who run small businesses.
That’s the simple “FATCA Of The Matter!”
John Richardson – Follow me on Twitter @ExpatriationLaw
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) June 29, 2020