Geneva, Switzerland (PRWEB) February 20, 2012
The Director of American Citizens Abroad (ACA), a non-partisan, non-profit organization representing the interests of U.S. citizens living outside the United States, today announced a new tax reform proposal unveiled with policymakers in Washington D.C. These reforms are aimed at increasing American jobs, exports and competitiveness, as well as addressing the specific tax situation of Americans residing overseas.
ACA's new proposal advocates residence-based taxation instead of the present system of citizenship-based taxation, along with other reforms aimed at increasing America's global competitiveness. ACA Director Jackie Bugnion met with Democratic and Republican staff of the Senate Finance Committee and the House Ways and Means Committee, as well as staff of the Joint Committee on Taxation, to discuss the new ACA proposals.
"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," said Bugnion. "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."
In her discussions with lawmakers, Bugnion emphasized the negative effect of the current system on the U.S. economy. She explained that "today, 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 maintains that changing to residence-based taxation for individuals would encourage U.S. corporations to send more American staff overseas to represent U.S. interests and promote American-made products. To conquer foreign markets in today's global economy, U.S. companies need to have American feet on the ground, in the form of Americans physically present overseas.
"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," added MaryLouise 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."
The U.S. is the only industrialized country in the world to impose citizenship-based taxation. The serious flaws in this system were recently highlighted by the difficulty of implementing the Foreign Account Tax Compliance Act (FATCA). FATCA imposes extensive extra-territorial reporting requirements on banks worldwide, and final regulations have still not been issued by the IRS because of the nearly insurmountable practical issues involved. ACA has received many testimonials from Americans living abroad, complaining that banks overseas are already closing legitimate bank accounts of U.S. citizens living overseas, in order to avoid the potential penalties of this onerous and complicated legislation. ACA has called for an outright repeal of the misguided and self-destructive FATCA legislation.
Details of the new tax reform plan can be found at http://www.americansabroad.org.