Will US expats finally be treated fairly under Trump?

[Monomial]

The Trump era is just days away, and since the Republicans now control both houses and the Executive, as a curiosity I read their platform report to get an idea of what kind of legislation they might be proposing. You can see a copy for yourself here:

 

https://prod-cdn-static.gop.com/media/documents/DRAFT_12_FINAL[1]-ben_1468872234.pdf

 

Imagine my surprise when I came across the following:

 

Quote

Thus, FATCA not only allows “unreasonable search and seizures” but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas. (p.13 - Directly above "The Fifth Amendment: Protecting Human Rights")

 

This is actually in the Republican 2016 Platform statement.

 

Could it be true? With all 3 branches firmly under the control of the Republican Party for the next 2 years, does anyone think they might actually follow through on this policy, correct the injustices of the past and finally give American expats the rights that the rest of the Western world has enjoyed for decades? A repeal of FATCA and residency based taxation? Maybe I can finally give up on my plan to become a Canadian.

 

I may have to rethink my opinion of the Republican party if they actually do this. Anyone care to give odds?

 

 

Edited January 18, 2017 by Monomial

[chiang mai]

FWIW I fully expect ex-US resident Green Card holders receiving SSc benefits to be treated even more harshly.

[Jingthing]

Hard to give odds, but history shows mentions in platforms are not particularly significant. It certainly is not a priority. Also trump is not the same thing as the republican party or platform. trump is an unusual character and correct me if I'm wrong, he has never publicly even mentioned FATCA, right? 

He's going to have so much heat over his PRIORITIES, particularly killing Obamacare and the wall, that I suppose if I was betting I'd say maybe 10 percent chance that it might be included in some kind of more comprehensive tax  policy change now. Not impossible, but not particularly likely either. 

Edited January 18, 2017 by Jingthing

[gk10002000]

I doubt there will be any changes.  Trump and his associates seem very interested in immigration issues, and terrorists, etc.  So by a weak association I don't think he will take any initiative to reduce or eliminate any reporting of foreign income, accounts etc.  The flow and location of monies are very central to the overall anti-terrorist campaigns

[Jingthing]

Yeah, that platform language sounds like it came from the libertarian wing of the republican party. trump is a new kind of republican and he has indeed started a "movement" centered on his personality alone. It doesn't sound like an idea he would have had or really part of his agenda.

[Langsuan Man]

When they start to realize the actual cost of their pie in the sky ideas,  reality is going to set in and they are going to be looking under every rock to find money to pay for it

 

So, IMHO, the burden is going to be even greater for those living overseas.  Sure there will be a push to get US corporations to pay more in taxes but they have lobbyists and tax lawyers to fend off these money grabs, not so, for average joe expat

 

Every time a Republican starts this smaller government mantra, just look out for the next "agency " or "department" they want to create for the public good  

[GinBoy2]

The idea that Trump bothers himself with minutiae of policy like FATCA seems improbable if not downright laughable.

I'd be willing to place a few $$ on the assumption that Trump couldn't even tell you FATCA is, let alone stands for.

 

So playmates, don't hold your breath for changes anytime soon

[Pib]

9 hours ago, GinBoy2 said:

The idea that Trump bothers himself with minutiae of policy like FATCA seems improbable if not downright laughable.

I'd be willing to place a few $$ on the assumption that Trump couldn't even tell you FATCA is, let alone stands for.

 

So playmates, don't hold your breath for changes anytime soon

Oh my god...if Donald (Twitter Boy) sees your post he's going to attack you on Twitter.

[Jingthing]

He surely doesn't even know what it is but there's always a chance the Congress might care enough to package it with a major bill. Yes it would help to call your congress people but then they might likely consider you a non entity due to the fact that you aren't a resident of their district or state anymore. Bit of a catch 22.

A similar problem with all expat legislation. Out of state out of mind.

[impulse]

I'm waiting for some astute lawyer to argue that FACTA is just like requiring all US citizens to report all the people they had sex with this year and their ages, so we can see if there's any children on your list.  And we're going to take money from you if you don't give us that list, or if you lie on your list.  (Edit:  Just like FACTA, if you had no sex last year, you're off the hook)

 

After all, which is worse, a kiddy diddler or a tax cheat?  Why should kiddy diddlers be able to dodge the bullet?

 

Both are an egregious violation of our privacy rights and (more pertinently) violate the 5th amendment which says we can't be compelled to give testimony against ourselves.

 

Edited January 19, 2017 by impulse

[bendejo]

Well, DT's primary questions would be "What's in this for me?  What do I lose by this?"  I would guess we wouldn't even be on his radar.

Now any of these people he put in place, well, that's another story.  A previous president tried equating ex-pat to sex tourist to pedophile; it's a sure bet he didn't think that up himself, my guess some christian charitable organization(s) did.

No one in US Congress is going to go to bat for the "expat community." 

 

 

[The Man Who Sold the World]

With all of the many, many, many existing internal problems, and the many friend and foe international problems, along with international trade issues, do you think they even cares about citizens who by choice have decided that they prefer to live in another country?

 

Although, as it is the republican platform, the is a reasonable chance it will be forwarded. Expats can only hope. 

 

Odds, 50/50 for further action.

Edited January 20, 2017 by The Man Who Sold the World
added comment

[Jingthing]

6 minutes ago, The Man Who Sold the World said:

With all of the many, many, many internal problems, the many friend and foe international problems, do you think he even cares about citizens who by choice have decided that they prefer to live in another country?

His plate will indeed be full. He's made so many big promises it makes your head spin!

[GinBoy2]

11 hours ago, Pib said:

Oh my god...if Donald (Twitter Boy) sees your post he's going to attack you on Twitter.

Thank God I don't 'do' Twitter

[Boon Mee]

Extremely unlikely that Trump will affect the American ex-patriot here in LOS...

[JimGant]

Quote

...does anyone think they might actually follow through on this policy, correct the injustices of the past and finally give American expats the rights that the rest of the Western world has enjoyed for decades? A repeal of FATCA and residency based taxation? Maybe I can finally give up on my plan to become a Canadian.

 

Huh? What the heck is residency based taxation? Americans are taxed on their worldwide income, regardless of where they reside. And FATCA didn't raise taxes for Americans (unless you're now caught in the FATCA net to lasso in tax cheats).  FATCA just codified reporting requirements for Americans with foreign assets (and implemented agreements with foreign countries to report these assets and related earnings -- above certain thresholds). And expats come out way ahead for reporting requirement thresholds (Form 8938) -- $200/400k single/married vs. $50/100k single/married for US residents with assets abroad. Obviously the revenuers are more concerned with US residents with foreign assets -- than with us expats.

 

I'm sure most of us reading this -- at least the expats -- are not subject to filing a Form 8938. But some of us may have aggregate amounts in a Thai bank exceeding $50,000. In which case, the US-Thai FATCA agreement says these accounts, and related earnings, will be reported to the US IRS. Oh dear -- the equivalent of a 1099 alerting the IRS to actual earnings. Now, it will be harder to not declare Thai interest on your Form B, 1040. Drat. That nasty old FATCA actually has me paying taxes I actually owe. With such shenanigans, the money now taken in from all those pre-FATCA tax cheats -- may just lower future tax bills on us honest folk.

 

Most of the OECD countries have adopted FATCA-like reporting requirements, so we Yanks are now just one more Western country in the financial reporting requirement maze. This extended reporting is just about rounding up tax cheats. FATCA is NOT about adding additional taxes to your tax bill -- unless you actually owe those taxes. If that's the case, pay up.

 

If you don't understand any of this, I'm sure Canada won't welcome you with any scholarships. Also, there's a good chance, at least if you're a retiree, that if you're an expat in Thailand, you're paying the exact same US Fed tax that you'd pay if you lived in the US. And this would be the same situation pre-FATCA.

 

 

[Monomial]

10 hours ago, JimGant said:

Huh? What the heck is residency based taxation?

 

Residency based taxation is what every country except America uses. It means if you are permanently resident in Thailand,  you pay taxes and obey the rules of only 1 jurisdiction.

 

I have a job and a family here. I have Thai retirement funds. I am not allowed to take advantage of the tax free nature of these funds the way my Canadian colleagues are.  I have to fill out onerous PFIC declarations every year, and pay taxes on the mark to market rates that are supposed to be tax deferred.

 

Citizenship based taxation is unfair to expats. That is the essence of the matter.

 

[gk10002000]

I would not necessarily lump or associate FACTA with Expats.  FACTA applies to and I am sure was meant to apply to more than just the relatively small number of Expats.  Expats just happen to possibly be involved with.  FACTA was for anybody with foreign assets, monies etc. 

[wwest5829]

On 1/20/2017 at 9:07 PM, JimGant said:

 

Huh? What the heck is residency based taxation? Americans are taxed on their worldwide income, regardless of where they reside. And FATCA didn't raise taxes for Americans (unless you're now caught in the FATCA net to lasso in tax cheats).  FATCA just codified reporting requirements for Americans with foreign assets (and implemented agreements with foreign countries to report these assets and related earnings -- above certain thresholds). And expats come out way ahead for reporting requirement thresholds (Form 8938) -- $200/400k single/married vs. $50/100k single/married for US residents with assets abroad. Obviously the revenuers are more concerned with US residents with foreign assets -- than with us expats.

 

I'm sure most of us reading this -- at least the expats -- are not subject to filing a Form 8938. But some of us may have aggregate amounts in a Thai bank exceeding $50,000. In which case, the US-Thai FATCA agreement says these accounts, and related earnings, will be reported to the US IRS. Oh dear -- the equivalent of a 1099 alerting the IRS to actual earnings. Now, it will be harder to not declare Thai interest on your Form B, 1040. Drat. That nasty old FATCA actually has me paying taxes I actually owe. With such shenanigans, the money now taken in from all those pre-FATCA tax cheats -- may just lower future tax bills on us honest folk.

 

Most of the OECD countries have adopted FATCA-like reporting requirements, so we Yanks are now just one more Western country in the financial reporting requirement maze. This extended reporting is just about rounding up tax cheats. FATCA is NOT about adding additional taxes to your tax bill -- unless you actually owe those taxes. If that's the case, pay up.

 

If you don't understand any of this, I'm sure Canada won't welcome you with any scholarships. Also, there's a good chance, at least if you're a retiree, that if you're an expat in Thailand, you're paying the exact same US Fed tax that you'd pay if you lived in the US. And this would be the same situation pre-FATCA.

 

 

Quite right but thanks for outlining for those who have concerns or do not understand. As pointed out, many, myself included, pay the same income tax as if stateside... in my case nothing.

[Ovaltine]

Residence based taxation! Wouldn't that be wonderful? Not holding my breath but thank you for giving us the link to the Republican platform, Monomial. Fascinating reading.

[Kabula]

An impossible question to answer at this point in time.

 

Actually, the less people talk about politics now, the better.

 

Give it a rest.

[Srikcir]

I doubt Trump has much awareness of American expats. But given his nationalistic leanings, he may actually dislike expats as people who are perceived to give up their country for a different culture (anti-American) and chose not to spend their American incomes (US pensions, social security, American company dividends) within the US (unpatriotic). He may further perceive (vs any fact) that a majority of expats vote Democrat. To that end he would be consistent with his foreign trade policy to impose a penalty or additional tax on the 5.7 million American expats.

 

Note to Monomial: The US House and US Senate are part of one branch of US Government called the Legislature Branch. The US Supreme Court is the third branch. Republicans don't YET controll the USSC.

[Fore Man]

I'd be careful what you wish for...we expats certainly would benefit from paying lower taxes based on our overseas location...based on not being a burden on US-based government services.  BUT...I would not want to also see my SS proceeds become non-eligible for COLA increases ( admittedly as meager as they are), withheld or recalculated downwards either.  

[Suradit69]

On 1/18/2017 at 6:33 PM, Monomial said:

The Trump era is just days away, and since the Republicans now control both houses and the Executive,

And within the GOP majority in both houses there are numerous factions with opposing positions on most significant issues. In addition, quite a few Republicans don't consider Trump a "real" Republican and are worried about their own upcoming elections.

 

To assume that Trump and Congress will be working in unison on a GOP platform produced by the same party that was reluctant to endorse or embrace him is a mistake. His stated  trade policies as well as his plans to reduce taxes while increasing infrastructure spending don't sit well with many and the need to raise the debt ceiling is only a few months off. Issues involving overseas Americans are unlikely to be a priority for him or Congress and would probably get swept aside if things get contentious between them.

 

[ubonjoe]

As expected this topic has now turned into a political discussion.

It is now