SEAT Home - Stop Extraterritorial American Taxation!



Instructions: Add your name and address below and fill in the blank for the country you live in. Feel free to edit and/or add your story. Delete this paragraph before submitting. Submit by emailing a Word document to the address below.Individual Submission - Statementsfortherecord@finance.Re: “How U.S. International Tax Policy Impacts American Workers, Jobs, and Investment.”Date: March 25, 2021Name: Address: I was born outside the United States. I inherited my US citizenship from my mother. I have never lived in the United States. live outside the United States in ________________ where I am a tax resident and where I am subject to full taxation. To me the United States is only about taxation. I find it very difficult to afford to comply with US tax filing. Even when I owe no US tax, I pay hundreds of Euros a year to comply. I would love to simply renounce my US citizenship. But it is not easy to afford the renunciation fee of $2350. Incredibly I can’t afford to comply, and I can’t afford to renounce. I feel as though I am a slave to a country that I never lived in. To put it simply: The United States must stop exporting its system of extraterritorial taxation and regulation, to people who live in other countries.I don’t understand why the United States is trying to impose taxation on none US income. I live in a country with a well-developed tax system that requires payment of a wide range of taxes. I can tell you that I pay a lot of taxes. I can also tell you that the US tax system treats my non-US income and assets very unfairly. It is somewhere between difficult and impossible to be a tax resident of more than one country. How can I plan for retirement?I do not live “offshore”. I do live in a country where I pay very high income taxes. I also pay additional kinds of taxes (example VAT) to my country of residence.Yet, because I was a US citizen, I was subject to the US extraterritorial tax regime, which means the United States imposed taxation on my non-US income even though I was and am fully taxable on that income, in the country where I reside. This was true even though I did not live in the United States. There is no other advanced country in the world that imposes such extraterritorial taxation.I would like to make two general observations about the hearing on March 25.The hearing focused on US multinational corporations. But here is the reality: US tax rules treat individuals living outside the United States, the same way they treat US multinationals doing business outside the United States. Although, I am a flesh and blood individual person, not a single participant recognized how individuals are affected by these rules. Yet, the focus of the hearing was supposed to be about individuals. How did this happen?I was shocked that there was no witness who had personal experience with a company or individual running a business with interests outside the USA. Not a single one! This is crazy. I respectfully suggest that subsequent hearings include witnesses who have experienced running businesses outside the United States and/or actually living outside the United States. To put it another way: Subsequent hearings should deal with the reality on the ground and not the theory in the cloud.I am not a “mini-multinational”. I am a “dual-national” living in my country of second citizenship. I am subject to the laws of the country where I live. I am not GILTI of anything. I ask only to be able to carry on my small business and/or life my life without interference from the Internal Revenue Code of the United States.As a general principle: Please understand that any and all changes to the taxation of US corporations will have a huge impact on the US taxation of US individual citizens living outside the United States and running small businesses outside the United States. Individuals are NOT immune to the effects of raising the US corporate income tax rate and/or doubling the GILTI tax.More generally (whether or not one is a small business owner), the US extraterritorial tax regime makes it difficult for me to save, invest, participate in pension plans and generally behave in a financially responsible way. This is because all of these essential activities are taking place in my country of residence and not in the United States. My retirement investments are foreign to the United States, but local to me. In addition, the United States impose taxes on things (for example sale of principal residence) when my country of residence does not. Because I am required to live my life with the USD as my functional currency, I am subject to “fake income” on nothing but changes in the exchange rate. As a tax resident of both the United States and my country of residence, I get the worst of both tax systems. What one giveth, the other taketh.And please don’t believe that foreign tax credit rules and/or the Foreign Earned Income Exclusion solve these problems. They don’t!American extraterritorial taxation is extremely unjust. For many years, Americans abroad have been attempting to get both Treasury and Congress to address these issues. The time has come for the United States to abandon its extraterritorial tax regime and join the rest of the world in adopting a system of residence-based taxation.This insanity and injustice must stop!God Bless The United States Of America! ................
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