A new coalition wants to eliminate the taxation of Americans working abroad.
The Asia-Pacific Council of American Chambers of Commerce is teaming up with several American Chambers of Commerce in Asia to launch the Alliance for a Competitive Tax Policy. The new group said it "seeks to eliminate the biggest tax increase on Americans working overseas in 30 years."
The ACTP has some bipartisan help from Congress. The group is launching with the assistance of Rep. Gregory Meeks, D-N.Y., and Sen. Jim DeMint (pictured), R-S.C. They have co-sponsored legislation, the Working American Competitiveness Act (HR 4752 and S 3496), to get rid of the taxation of foreign-earned income of U.S. citizens.
The group is protesting the double taxation of U.S. citizens and points out that the United States is the only industrialized country in the world that taxes its citizens on income earned internationally.
U.S. tax laws have traditionally provided a limited exclusion of the tax on foreign-earned income for nearly three decades under Section 911 of the Tax Code. However, when the Tax Increase Prevention and Reconciliation Act won passage in 2006, the limited exclusion narrowed further, pushing many American expatriates into the highest tax bracket, even though their salaries and benefits did not necessarily change. The bill increased the tax burden on Americans working abroad by as much as $25,000.
The ACTP and the supporters of the proposed legislation argue that the earlier bill unfairly harms U.S. competitiveness. They contend that the 2006 law creates an economic disadvantage for U.S. corporations that want to assign personnel overseas, causes additional barriers to entry for smaller companies that want to expand abroad and makes it more attractive for U.S. companies to hire foreign workers when the U.S. economy is already suffering.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access