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In the final stretch of his 2024 presidential campaign, Donald Trump has made a bold new promise to eliminate US income taxes for Americans living abroad. This latest proposal joins a growing list of plans aimed at cutting personal tax bills. Trump has also floated the idea of exempting tipped wages, overtime pay, and Social Security benefits from taxation, all part of his broader strategy to lessen the tax burden on Americans.

 

In a statement aimed at American expatriates, Trump declared, "I support ENDING the Double Taxation of overseas Americans!" He added, "Let’s put America First, together. Register to Vote, and vote Republican." Currently, US citizens, no matter where they reside in the world, must file tax information with the Internal Revenue Service (IRS). Some expatriates are required to pay US taxes in addition to the levies they pay in the country where they live. Trump's plan could simplify these obligations for the approximately 9 million Americans the State Department estimates live abroad.

 

The tax system, as it stands, does not mean all expats owe money to the IRS. The tax code provides credits to offset federal taxes owed, and individuals earning less than $126,500 are not required to pay any US taxes. However, advocates for changing the taxation of Americans abroad point out that these IRS rules contribute to a trend where a few thousand people renounce their US citizenship annually. It is typically higher-earning expatriates who face the most significant tax bills under current rules. If implemented, Trump’s plan could potentially allow wealthier Americans to relocate to low-tax countries and avoid paying US taxes altogether.

 

The Wall Street Journal was the first to report Trump’s proposal. While the plan would reduce paperwork and likely lower tax bills for Americans abroad, it would require approval from Congress. If successful, it could mark a significant shift in how the US handles expatriate taxation.

 

This pledge to eliminate taxes for Americans living overseas is just one piece of Trump’s broader tax-cutting agenda. Throughout his campaign, he has championed efforts to reduce household and corporate tax burdens. Trump has promised to push for a renewal of the 2017 tax overhaul, much of which is set to expire at the end of next year. These sweeping tax proposals, if implemented, could amount to more than $10 trillion over a decade, according to estimates from the Committee for a Responsible Federal Budget.

 

While Trump’s plan offers relief for Americans abroad, it contrasts with his approach to US-based businesses. He has called for lowering the corporate tax rate to 15 percent from the current 21 percent, but only for companies that manufacture inside the US. Companies that operate overseas, on the other hand, could face higher tax rates and tariffs if they attempt to sell their products to American consumers. 

 

Widespread tariffs are a core component of Trump’s economic strategy. Last month, he threatened to impose steep import duties on Deere & Co., a major US farm machinery manufacturer, if the company moved its manufacturing operations to Mexico.

 

As the 2024 election approaches, Trump’s tax-cutting promises continue to grow, appealing to various groups, from expatriates to domestic manufacturers. Whether these proposals will come to fruition, however, depends on the outcome of the election and the willingness of Congress to support such sweeping changes to the US tax system.

 

Based on a report from Business Standard 2024-10-11

 

 

 

[mdr224]

Kamala will announce this as her policy too next week

[ukrules]

4 minutes ago, mdr224 said:

Kamala will announce this as her policy too next week

Lol, no chance on that.

[Cryingdick]

His other new one is making interest on cars tax deductible. That would be huge for the auto industry and almost countless small businesses.

[CANSIAM]

Perhaps DT will be one of those expatriates abroad after his Nov. 5th loss.......😉

[Jingthing]

First step towards cutting off social security for expats.

[Tug]

Ahhh trump PROMISE that’s worth a fart in the wind…..might get some of the Uber wealthy excited skip on there taxes leaving the burden on regular folks.

[Cryingdick]

39 minutes ago, Jingthing said:

First step towards cutting off social security for expats.

 

I wouldn't object to that. It would also pave the way to make it so you cant vote if you 'don't  live in the USA. As you no longer face taxation without representation. 

Edited 2 hours ago by Cryingdick

[Chomper Higgot]

He also promised to build a wall.

 

 

[impulse]

1 hour ago, Jingthing said:

First step towards cutting off social security for expats.

 

There are a lot of people who would gladly forego social security in favor of a self-directed investment.  Remember that SS takes 15% of your pay for your entire career (with limits if you make a bundle).  Disciplined investors could do a lot better in the market if they invested that 15% themselves.  The key word there being "disciplined".

 

He won't take SS away from anyone who has contributed.  That's a different bucket from income taxes.

 

[HappyExpat57]

2 hours ago, Social Media said:

"... has made a bold new promise ..."

Don't you mean "opened his mouth and yet another lie fell out?"

[JonnyF]

2 hours ago, mdr224 said:

Kamala will announce this as her policy too next week

 

Harris has been very clear on this. In fact she couldn't have been more clear.

 

When asked she replied "well let me start by saying that when I was child, living in my little middle class neighbourhood, my parents also paid tax".