Washington DC, Geneva Switzerland (PRWEB) December 11, 2012
Alarmed and vexed by the rising compliance burdens and the harmful effects the US tax system has on US exports, American Citizens Abroad (ACA) has developed a different and far simpler approach to taxing Americans overseas - one which could actually increase total tax receipts from Americans overseas.
The ACA proposal would replace the current citizenship-based taxation with residence-based taxation, under which American residents overseas would pay taxes on a basis very similar to that applied to non-resident aliens, with US-source income withheld at source. This would align US tax policy with that of virtually every other country on the planet. In addition, ACA calculates that implementing the new proposal would dramatically improve tax receipts to the U.S. Treasury and improve the US export picture.
Details of the withholding regime were outlined on December 4th by U.K.-based attorney Geoffrey Morson at the IBC International Withholding Tax Summit in London. Morson, a veteran tax litigator and international tax planning specialist with extensive experience in representing clients in the Offshore Voluntary Disclosure Initiative, sees current US law as decidedly suboptimal. "Both ACA and I as a tax professional obviously advocate the most stringent observance of the tax laws. Nevertheless it is important that the double taxation and double filing issues be addressed so that overseas Americans can compete on a level playing field and sell US products to foreign buyers." Morson views current law as an export killer. "It is unrealistic to hope for a world class export economy when your tax system is telling the people needed to sell your products that they should pack up their laptops, throw in the towel and just come home" he notes.
"Since 91% of the tax filings submitted by overseas Americans result in no tax due, adoption of our proposal would permit a far more efficient use of both IRS and taxpayer resources", noted Jackie Bugnion, ACA's Tax Team Director. "Our tax code makes Americans too expensive to hire, so US and foreign firms understandably replace them with qualified professionals from other countries without income tax, FBAR or FATCA filing requirements and the immense legal and financial jeopardy they entail. How can you work effectively when FATCA prevents you from opening a bank account?"
"A Better Way to Tax US Persons Abroad" is available for download at http://americansabroad.org/files/1113/5170/0066/Taxation_of_Americans_Resident_Abroad_-_November_2012.pdf.
ACA, a non-profit, non-partisan volunteer association with members in over 90 countries, is the foremost advocacy organization representing the six million Americans overseas in Washington, focusing on taxation, voting, healthcare, social security, representation and citizenship issues. ACA maintains offices in Washington, DC and Geneva, Switzerland. http://www.americansabroad.org
Geoffrey Morson, a Member of the California and New York Bars, holds a J.D. from Harvard Law School and is admitted to practice before the US Tax Court (1974) and the US Court of Federal Claims since 1974. He is a principal of Daniels & Morson Private Fiduciary Services (Hong Kong). More information is available at http://www.daniels-morson.biz.
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