Republicans push huge tax increase for Americans living overseas
 

Expats face big increase in tax payments
By Lauren Foster in New York
Published: May 10 2003 5:00

The proposed repeal of a tax concession for Americans working overseas would increase expatriates' tax bills by an average of $1,000 a year, tax experts said yesterday.

Unlike most countries, the US taxes its citizens on their worldwide income regardless of where they live, even if they are resident in another country that also taxes them on their worldwide income.

Andy Sundberg, founder and director of American Citizens Abroad, said double taxation of overseas Americans was "an economic weapon of mass destruction".

The net effect of a repeal of the exclusion, he said, would be that many people would end up with effective tax rates higher than the top rate in either the US or the country where they lived and work.

http://news.ft.com/servlet/ContentSe...=1051389912567

REMINDER: The government is not your friend.

Funny how the US began as a result of taxation without representation. How much representation is a US citizen getting when they live and work outside of the US? and yet they're still forced to pay tax?

Oh Christ, gimme a break. Everyone's on this fucking bandwagon these days.

they can still vote, they have all the representation possible

Maybe if they stopped spending all our money on other countries they would not have to tax us so much!!!!

Masturbation man

give with one hand, take with the other

So?

they talk about eliminating double taxation, yet they want double tax workers working in other countries for american firms.

it hurts the bottom line of american companies and reduces jobs for american workers.

"they talk about eliminating double taxation, yet they want double tax workers working in other countries for american firms.

it hurts the bottom line of american companies and reduces jobs for american workers."


"Many US companies compensate their overseas employees by covering their US taxes, so repeal of the exclusion would increase company costs. It could also reduce the incentive for Americans to work abroad and encourage US companies to hire locals, tax experts said."

It is funny how he managed to leave this part out.

The tax is designed to encourage companies to hire local emplyees. Local employees grocery shop at local stores. Buy gas at local gas stations, buy tickets at local sporting events, opposed to spending their money in China.

The economy is a multi level platform. If a comany finds it to be more of a benifit hiring within the US, then that employee is going tom spend his cash in the US.

yes kenny, economists and market analysts are wrong...

and its a bit more complicated than that...

:glugglug

It is only more complex if you <b>try</b> to make it that way. Some people will go out of their way to make something look bad.

A guy named "Mr Fiction" is now a believable source of infomation.

Kenny, the Americans who live overseas use less of the stuff that taxes are spent on, why should they pay more taxes than Americans who live in the U.S?

Then again, the reason Republicans can slam people not living in the U.S. is because the pseudo patriots, the ones who never get a passport in their life and who think "France is stupid because Rush said so", will think it's great to punish those traitors who would ever think of setting foot outside of the great U. S. of A.

I thought Republicans were supposed to be against higher taxes? :1orglaugh

you don't even know the half of it

Here is another story for those who care:

Senate Republicans pursue tax hikes to get Bush his cuts
JIM VANDEHEI; The Washington Post

WASHINGTON - Senate Republicans, struggling to make more room for President Bush's cherished tax-cut plan in their annual budget, settled on an unusual and controversial solution Thursday: Raise taxes elsewhere.

http://www.tribnet.com/news/story/30...-3112075c.html

Your looking at it in a different angle. The company who employs the employee overseas pays those taxes.

"Many US companies compensate their overseas employees by covering their US taxes, so repeal of the exclusion would increase company costs. It could also reduce the incentive for Americans to work abroad and encourage US companies to hire locals, tax experts said."

By raising the tax on oversea employees the comapanies will more likely hire local employees. Local employess spend their money within the states.

Yes taxes are raised to detour companies from using overseas employees. The tax is designed to make companies hire within the US.

Yes your right, companies who have overseas employees are getting a tax raise!

The proposed repeal of a tax concession for Americans working overseas would increase expatriates' tax bills by an average of $1,000 a year, tax experts said yesterday.

read much kenny? these are americans who will get taxed twice, once by the american government and also by the government where they are working. it will make it cost more to hire americans.

Kenny, I'm confused now. :)

The way I read it, they are saying that Americans working overseas will be getting screwed. It seems like the way you're reading it, the change is going to try to screw people from other countries working in the U.S.

Is that what you mean? Maybe I'm reading the article wrong, but I think it says that it will encourage American companies overseas to hire non-American employees, which would mean you would have more American companies hiring non-American employees.

Am I fucked on how I'm reading this?

I want to brawl about it, I just want to make sure we're on the same page about what it means before we do. :)

Hopefully the mighty Rooster will show up and clear it all up for us.

The bill is designed to encourage companies to keep their employees within the US. The tax applies to employees overseas. Companies have been paying the taxes for employees overseas, companies will avoid using overseas employees because of the tax. Yes I read. Yes there is a fucking raise in the tax, a tax rise to detour companies from using overseas employees. Overseas employees spend their money overseas, local employees spend it within the US.
No forget it that tax plan they developed serves no other purpose then to fuck the american. Bush = Hitler

"Why they chose to disenfranchise American workers who work out of the country, we don't know," said Martin Regalia, the chamber's vice president for tax and economic policy and chief economist. "It takes $30 billion out of citizens' pockets, eliminates jobs abroad for Americans and makes American companies less competitive."

Who fucking cares... it sounds like they've been getting a break for a long time, didn't you all read this excerpt?

"would end a 57-year-old exclusion, known as the Section 911 exclusion. It allows Americans living and working abroad to exclude $80,000 in income, plus housing costs, from federal taxes"

and from that the average tax bill for expats will raise $1000.

You think that because they live overseas they should pay less taxes? I think that's absurd. If they want their citizenship, they can pay what the rest of us do.

Brad

I am wrong. Overseas companies will be encouraged to hire locals overseas. I read it wrong. Let me go make another drink.

I tried to speed read through it and picked up the wrong info

if they need skilled workers and they can't get locals, then it will cost them more to hire americans because they will want more money to compensate for the increase in their costs. or go with the less skilled locals. either way it affects american companies and puts them at a disadvantage.

The article states the tax will generate some 32 billion dollars within 10 years. While it might have a negative effect on that portion of the economy, that money could be used else where for a positive effect. We simply don't know the outcome, the big picture. It could be a bad move or it could be a investment towards a different economic gain.

raising taxes is not the way to go. i would just rather they drop the amount of tax cuts they're currently calling for. put pressure on the fed to drop the 10 year treasury yield to under 3%. that could stimulate the economy more than any tax cut package they could throw together.

even with the tax cut i think they'll need to intervene because long term rates have been very stubborn.

Here's the problem - America is one of the only countries in the world that nails their expat citizens for taxes even if they already have to pay taxes in the country they live in. Many Americans living abroad have to pay taxes twice. There are some treaties, but even so, expat Americans are getting fucked over by their government compared to the citizens of most other countries in the world.

You might look at this exemption as some people getting a bonus, but it's not true. It doesn't even level the playing field compared to what most other countries do for their citizens living abroad. Americans who live overseas are already getting screwed by the U.S. government, and now they will get more screwed.

In the end, it's punishing a small group of people who politicians think are least likely to hurt them in an election. Think about it, they're fucking over people who don't even live here, who don't take much out of the system, who are less likely to be politically active. Even these politicians probably know it's wrong, they just think they can get away with it.

I'm not an anti-tax fanatic, I just see this move as poltical opportunism. Rather than be straight forward and add taxes to people who actually use the sytem, they are going after those who are least likely to cause them problems at the next election, even if it's wrong.

This is not as bad as you guys think. There is one variation in the code that could be a source of good news if you are quick -- IF the income is generated OVERSEAS, then the IRS will only tax this income PAST the $75K mark. That's right.... $75K tax free if its completely generated overseas...ie., you earned it while you're overseas..even if the client is a US company.

What does this mean? A lot, actually, get your accountant to factor in your expenses so that you are under the $75 K mark and, you guessed it, YOU DON"T PAY ANY US TAXES!

I just have to disagree on the principle, Mr. Fiction. If they don't want to pay US taxes they should give up their citizenship. What other countried "do" isn't a benchmark that means anything and it never has been. Not for taxes, not for healthcare, not for business, not for education, not for welfare.

There's a reason that people from all over the world immigrate to the US... No other country in the world has more people that want to move there than we do. It seems to me that there are probably a couple billion people with residence envy.

Brad

Why should people not using the system pay as much into the system? It makes no sense and it is a mistake by the U.S. government to do what they are doing. And yes, we should look at what other countries are doing if we want to compete with those countries. If we discourage American companies abroad from hiring Americans, they are going to hire people from other countries. That takes money out of our economy and puts it elsewhere.

This is nothing less than a massive tax increase on people who use the least tax resources.

One important thing for all you GFY Republicans, don't ever say again that Republicans are for lower taxes when Republicans are the ones pushing for this tax increase - and many of you support it. :)

They should pay as much into the system because it's still their system as Americans. It's their system when we go to war. It's their system when they come home. It's their system when they start drawing on Social Security. It's their system as long as they are US Citizens.

Come on, let's be serious. I know you're a bleeding heart liberal, don't you think that they should be paying into the system so that they can help support (amongst other things) our nice little ineffective welfare state?

Brad

P.S. - On a seperate note... Your host is a loser, btw. Just thought you should know! :winkwink:

So what you are saying is that the USA has nothing to learn from other nations.

Hey, leave my poor host out of it. I could make some comments about your host, but... :)

Do you mean the "ineffective welfare state" that was put into place in the 1930's? I wish I could find a graph of the American economy from the institution of the "ineffective welfare state" to now. I wonder if the economy has gotten stronger or weaker since the welfare state was started? :)

Actually, if you calculate based on total monetary value [accounting for inflation] people were richer during the pre-"welfare state" era. However, during this era, income parity did become more widespread [until the late 90's]

It's like if you live in one state but your job is across the border in the next state. YOU apparently think it would be fair for both states to tax you full income tax? Explain.

There are jobs where Americans working overseas do not pay any taxes to the US or the host country.

There are SOOO many previous posts in this thread that I wanted to quote. Instead I'll try and go through the whole issue and hope that I hit all the high points.

I am an American living and working in the UK. My company does NOT pay the US government anything to have me on staff. As I do not earn more than the Foreign Earned Income Exclusion (which was around $80000 this year when I did my taxes) I have not had to pay taxes effectively twice (once to the UK and once to the US). As far as I read the article, they are planning to do away with the FEIE. This of course means that companies that DO pay their US employee's US tax bills will get a hike and they will have to decide whether they want to send the employee back to the US or pay the additional taxes to keep them on staff abroad. What it means for the rest of us is that we will effectively pay out nearly 65% of our earnings in tax!!! 30 odd % to the country in which we live and work, and 30 odd % to the good old USA.

I do not now use the amenities that US taxpayer money supports and I am not ever likely to do so ever again. I do not drive on the roads, rely on the police or fire service to keep myself and my possesions safe, I won't be 'coming home' so I won't take advantage of either welfare OR Social Security, I don't even enjoy the maintenance of our monuments and museums.

I would SERIOUSLY consider relinqishing my American citizenship if this bill goes into effect. The US does NOTHING for me as long as I live abroad and I don't see why I should have to pay for something that doesn't help me at all. I suppose were the UK ever to become an active war zone again, they'd pay to have me and my family evacuated. But to be honest, I see that situation as very unlikely to occur.

I suppose you could argue that in those countries where the employee pays little or no tax to the 'host' country that they should pay SOMETHING. I mean, for fuck's sake, we all have to pay taxes right? Its only fair! But seriously, the people this bill will hurt the most are the little people. The people who are only living their lives and working within the community in which they reside. The people who up until now haven't earned enough to make it necessary to pay taxes to the US and therefore probably couldn't afford it if things changed. I know I couldn't.

I think I've made my point of view clear and I hope that it has opened the eyes of some people who think that I should pay for the fact that I happened to be born in Washinton D.C. instead of Rome, Hamburg, Rio, or hundreds of thousands of other places in the world.

And to think, the USA goes to war for you!

Don't you think you should pay for your share of those bombs?

You don't care about freedom!

INGRATE!

Noting too meaningful to add here as much of it has been said. I only really wanted to say...

SinEmpire guy - gotta be the biggest single fucking idiot with one of the lowest IQ's I've seen on this board for a very long time. Why? His posts and 'arguments' in this thread say it all.

Good grief.

:1orglaugh :glugglug

Hey Sarah - As a fellow American married to an Englishman and living and working in the UK, how do you feel about all this?

Fucking whiners.

The majority of these workers never paid anything in US taxes.

:glugglug

Brad just likes to stir it up, especially if it means he and I can disagree. :)

There's a fundamental difference between State and Federal taxes. The example of working in one state and living in another and paying taxes in both I agree is flawed. I think in such an instance the most fair way to handle the taxes might be to take the higher of the two states income taxes and split the revenue between both states.

Tipsy, when you respond with something intelligent instead of an empty insult, I'll be happy to acknowledge you.

Yes, I do just like to disagree with Mr. Fiction.. we both get a kick out of it.

My opinion on this subject is a personal one, that US Citizens should pay US taxes regardless of where they're living. There isn't a right and a wrong answer to the question that has been posed - all there can be is opinions. Those with the strongest opinions will obviously be the affected ones and of course they don't want an increase in taxes. Perhaps the more fair solution is some internationally agreed upon tax burden that gets split between both countries. Why not flip everything around and decree that people of US citizenship don't have to pay taxes to whatever foreign country they're working in?

If I ever decided to move overseas permanently I'd most likely give up my citizenship. The way I see things, you can't have your cake and eat it too... I think if someone has no plans of ever coming back they should apply for citizenship elsewhere.

I always find tax arguments funny because the ways we're taxed here are so rediculous to begin with. The tax code is a joke and in my opinion we should have a flat tax for everyone and not tax people that earn less than 15-20k.

Cheers,

Brad

They could just give up their citizenship and then they pay no taxes :)

fact is it will make american companies less competitive and mean less jobs for americans.

One thing that has been left out is that "double taxation" is only the *default*, it is not actually that common. In most cases, tax treaties exist to solve the problem in more fair ways.

For instance, the US treaty with the UK means that a US citizen in the UK onlypays taxes to one or the other-- depending on how much he makes per year.

Still, it looks like the Republicans have started to target a group I belong to for more taxes. (They probably realized that we're less likely to vote.) This could indeed suck in the long-term. Blah. :(

Looks like they've got it in for us Ian.:winkwink:

Seriously though if this thing goes through I may just give up US citizenship altogether. In a way it wouldn't make a big difference to my life. Although I've never looked into how hard it is to get UK/EU citizenship. Any idea?

couldn't you always get your american citizenship back in the future?

I'm not positive - like I say I haven't done much research as I had never considered giving it up until now - but I don't think so. In theory, you could just take the test and the oath just like every other Joe Mexicano that comes to the States and wants to be a citizen but I think there is a clause somewhere that says if you ever deny or relinquish citizenship that it cannot be granted again.

If this bill does pass and makes my tax bill double in the blink of an eye then I may consider giving it up. If and when this happens I will thoroughly research it before making a final decision. Citizenship to ANY country isn't to be given up lightly so I'll certainly put a lot of thought into it.