An organization that represents U.S. citizens living outside of the United States has demanded tax reforms that will specifically address many of the frustrations experienced by U.S. corporations and American citizens living overseas.
Last week, American Citizens Abroad (ACA) visited Washington to present members of Congress with a residence-based tax proposal that will change the present system of citizenship-based taxation. The reforms, the group argue, are necessary for strengthening the U.S. economy and will increase exports, job opportunities and competitiveness on a global scale.
At present, the U.S. is the only country in the world to operate a taxation approach that is based on citizenship as oppposed to residency and many American expats living abroad are forced to pay tax both within their host country and at home. ACA argue that this system makes it more difficult for American companies to compete and is motivating key talent to relinquish their citizenship and take up residence elsewhere. Discussing the current tax rules ACA Director Jackie Bugnion, commented: “There is already a strong movement in Congress to shift corporate taxation from worldwide to residence-based taxation in order to level the playing field for U.S. companies competing in the world economy.
“I met with Members of Congress to convince them that the U.S. should make this move for individuals as well, to allow Americans overseas to compete on that same level playing field.”
Providing further detail as to why the group believe that the current tax system hinders U.S. expats she commented: “Due to the double taxation of current U.S. tax laws, Americans abroad are simply not competitive. It’s much cheaper for U.S. corporations to hire foreigners overseas instead of Americans, and fewer Americans overseas means less exports from the U.S. and fewer jobs back home.”
ACA argue that implementing a residence-based taxation for individuals would entail that more U.S. companies would send their own staff abroad as opposed to being forced to recruit overseas talent. This, they argue, would make the U.S. much more competitive on a global scale.
“ACA will be systematically contacting all Congressional offices on the Senate Finance and House Ways and Means Committee to get issues concerning Americans residing overseas included in legislation on fundamental tax reform,” commented Mary Louise Serrato, Executive Director of ACA. “Changing to residence-based taxation would be good for Americans overseas, but also good for the entire U.S. economy.”
For further details about the new tax reform plan please visit http://www.americansabroad.org