House committee receives push for residency-base tax

The U.S. House Ways and means Committee has received comments from citizens suggesting tax reforms. More than half urged the House committee to adopt a residency-based tax system.

In March, the committee called for comments from citizens on the subject of tax reform, with a deadline for submissions of April 16.

American Citizens Abroad asked members and supporters to write to the committee’s Tax Reform Working Groups requesting a change to the tax treatment of Americans living and working overseas.  American Citizens Abroad is a citizens’ advocacy group representing the four to seven million U.S. citizens living outside of the United States, it noted in a release.

“Of all the comments on tax reform sent to the committee’s international tax working group by Americans overseas, the overwhelming majority mentioned and recommended ACA’s proposal for residence-based taxation,” said Mary Louise Serrato, executive director of American Citizens Abroad, in a release.

The organization has calculated that a residence-based system would be either tax-neutral or would possibly bring in more tax revenue than the current system of citizenship-based taxation. The United States is the only major country in the world which taxes its citizens and green card holders, no matter where they live, the organization noted.

American Citizens Abroad said it believes that basing U.S. taxation on residence rather than on citizenship would help keep overseas Americans competitive, allowing them to create jobs for companies and factories state-side through increased exports.

“After this outpouring of comments from overseas, the International Tax Reform Working Group of the Ways & Means Committee can no longer ignore the major tax issues raised by this important group of American citizens,” added Ms. Serrato.

In the submitted comments, and in addition to expressing strong support for residency-based taxation, many Americans overseas related their own personal hardship cases in which individuals overseas have been denied jobs and refused basic banking services like current accounts and mortgages, simply because of their U.S. nationality and the highly negative U.S. system of
citizenship-based taxation, the organization said.

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