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| With the deficit in the US and the bill for social Security and Medicaid coming due for the "baby boomer" generation, I believe this is a real threat.
I pay my tax to the US, but I consider Switzerland my home. I am not an activist but I think an issue is that Americans Abroad do not have representation. We are not united and there is not a strong voice for issues that impact us. Senator Chuck Grassley a key member of taxation committee and Senate finance committee believes the Foreign earned income exclusion should be eliminated. This is a strong concern because he has slipped in tax changes before that have impacted Americans Abroad.
"Since 1976, Rep Chuck Grassley, Senate Finance committee has repeatedly introduced measures that increase the level of double taxation on American citizens living abroad, including retroactive tax hikes. Grassley was eventually able to attach an amendment to a unrelated piece of legislation that went into effect in 2006, which increased taxes on Americans abroad by targeting housing and living incentives paid by foreign employers and held them accountable for federal taxes, even though they did not currently reside in the United States."
That 2006 tax change that increased taxes on Americans abroad was slipped into another non tax related bill at the last minuted by representative Chuck Grassley. It was not even debated and almost no one in congress knew it was there. Grassley believes that American's Abroad are a major source of additional tax revenue and is a supporter for elimination of foreign earned income exclusion.
http://www.nytimes.com/2006/05/30/business/30tax.html | |
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Anything is possible. You may also be assessed a penalty for not subscribing to a US health insurance plan even though you have a perfectly adequate Swiss one and even though the US plan might not pay for out-of-country medical care and evewn if it did that (unless you are a retired diplomat, for which there is a special Swiss exemption in certain cases
http://www.eda.admin.ch/eda/fr/home/...ns/inshea.html ) it wouldn't exempt you from having to subscribe to a Mutuelle.
The end result would be to cut persons who are legally US citizens but whose entire lives are bound to another country and citizenship off from the United States. By and large US tax law is conceived without regard to consequences abroad, even border commuters to and from Canada, and only afterwards is thought given to sorting out hardship. My daughter's colleague in a Paris investment bank, himself a Belgian married to an American, gave up his green card last year because it was costing him $30,000 a year in tax, for which he got nothing. Of course now that he's a nonresident alien, any substantial financial transaction with his wife and children is subject to reporting on Form 3520...
I wonder how many Americans married to Swiss nationals, with their assets in Switzerland, arrange for their marital deduction assets to be put into a QDOT at death...