The US tax system is terrible for US persons living or wishing to live overseas. Only USA and a handful third world countries charge taxes to citizens (or green card holders) when they aren't residing in the home country.
This is ridiculous and extremely unfair because the affected people have to spend countless hours dealing with two tax systems, getting taxed twice on some income, and worst of all, get exposed to high penalties or criminal charges for any mistake. International tax reporting is terribly hard, and requires to pay for expensive accountant support.
There are a couple of initiatives trying to get congress to improve the international taxation system, but unfortunately, they don't seem to have had much success so far. The TTFI (Territorial Taxation for Individuals) is very reasonable and would help millions of US persons living or wanting to live overseas, permanently or temporarily.
TTFI is preparing a petition for 'Congress to sponsor and vote for a clean Territorial Taxation for Individuals bill in the upcoming legislative session.' I've found about this late, but it would be of a huge benefit if it got thousands of signatures from concerned citizens. Please, set politics aside. This initiative is coming from a group called Republican Overseas, but TTFI will benefit every American (current and future). For us not having a plan to move overseas, we may want to do it in the future (e.g. get in love and marry overseas, move to a beautiful and cheap place in another country, etc.) Or perhaps our children or grandchildren will do it. Who knows. But we can help now by signing a petition to the US Congress It takes very few minutes!
I'm only a concerned citizen. I neither do belong nor do I have any relationship with the group that initiatied TTFI. But I think that it's good and it should be shared.
TTFI petition to the US Congress: https://republicansoverseas.com/ttfi-tax-reform-sign-the-petition/
The petition text is copied bellow (you can find the original information and much more in the link above).
Dear Speaker Ryan and Majority Leader McConnell:
Please support the implementation of Territorial Taxation for Individuals by allowing members’ bills to be brought to
the House and Senate and by encouraging Congress to vote for these bills. Furthermore, we urge you to support legislation exempting overseas Americans who own small businesses from having to pay the 15.5% excise tax.
The Tax Cuts and Jobs Act of 2017 (‘TCJA’) has brought reduced taxes and increased prosperity to businesses and
individuals within the United States. However, it has created some serious, unintended consequences for the 9 million
law-abiding Americans currently living overseas.
The US tax code now taxes businesses on a territorial basis, but continues to tax individuals on a citizenship basis,
continuing the practice of double taxation of individuals, but also creating a dichotomy in American tax policy: the US > has one type of taxation for businesses, but another for individuals.
One of the unintended consequences is the 15.5% excise tax on overseas historic earnings which impacts small
businesses owned by overseas Americans. What is good for Apple may bankrupt a doctor, small importer, or sole
proprietorship. Small businesses owned by overseas Americans have been especially hard hit, as FATCA legislation has
caused overseas financial institutions to insulate themselves from risk and minimize the services offered to overseas
Americans. Small businesses have suffered from their inability to secure loans or lines of credit and have used their
retained earnings to self-finance their businesses’ growth. Requiring these businesses to pay the same excise tax on
overseas historic earnings as the multi-national corporations would have the undesirable and unintended
consequence of bankrupting these businesses and their American owners.
We urge you to support GOP members’ bills brought to you for the transition of the United States’ tax policy from
citizenship-based taxation to Territorial Taxation for Individuals (‘TTFI’). TTFI is good for the United States and would
continue the Congress’ drive to build American businesses and create jobs.
The United States is the only developed country that implements a system of citizenship-based taxation (‘CBT’) which
requires overseas Americans to pay taxes to both their host country and to the United States.
Transitioning the United States to Territorial Taxation for Individuals would:
End discriminatory double taxation of law-abiding, overseas Americans.- Harmonize the United States’ tax codes so that individuals and corporations are taxed on the same basis.
- Increase American exports. Overseas Americans are the best champions for American products and services.
- Increase American jobs. Increased exports of American-produced products will lead to more American jobs.
- Decrease the costs of overseas Americans to U.S. corporations. Overseas Americans cost 40% more than their foreign * counterparts due to double taxation and regulation, which minimizes the ability of corporations to hire Americans and give them necessary exposure to global business.
- Attract skilled immigration to the U.S. and support the RAISE ACT by removing serious tax implications for skilled immigrants’ foreign businesses and income.
- End the discriminatory costs of tax compliance such as FATCA and FBAR filing for overseas Americans.
- Make tax codes simpler for nine million overseas Americans.
Territorial Taxation for Individuals is about equality. TTFI not only removes CBT enforcement regimes such as FATCA
and FBAR, but also protects 9 million overseas Americans’ constitutional rights such as the right to privacy, probable
cause, no warrantless search, due process, and no unusual punishment.Most of the tax cuts in the TCJA benefit stateside Americans. Implementing TTFI would offer overseas Americans the
same tax reductions and benefits as their stateside counterparts while helping to create more jobs.
Some very informational videos on TTFI:
Hope you find this useful and can help by providing support to the petition by signing it. Thanks very much!