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Old 16.02.2012, 20:20
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Proposed Elimination of the FEIC for US Expats

Is anyone here from Massachusetts?

If so, could you please write Congressman John Tierney and urge him to drop the proposal in his bill H.R. 2495 to eliminate the Foreign Earned Income Exclusion for Americans living overseas. The FEIE is the ONLY thing that stands between us and double taxation, which is completely insane

Below is the link to the details of the bill:
http://tierney.house.gov/index.php?o...rticle&id=3041

I've also seen he's got five co-sponsors of this bill from Tennessee, Minnesota, Arizona and Illinois

Rep Cohen, Steve [TN-9]
Rep Ellison, Keith [MN-5]
Rep Grijalva, Raul M. [AZ-7]
Rep Jackson, Jesse L., Jr. [IL-2]
Rep McCollum, Betty [MN-4]

This is just going to drive more people to renounce their U.S. citizenship.

Thanks for your help!
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Last edited by latigresse; 16.02.2012 at 20:32. Reason: to add co-sponsors' names
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Old 16.02.2012, 21:25
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Re: Proposed Elimination of the FEIC for US Expats

If you get foreign tax credits, why would it be double taxation?

Just a question.

This is a Democratic bill in the House so little worry it will pass and that last point about Healthcare Savings Accounts will kill it (along with the Carry Interest subsidy). As the GOP answer to healthcare is HSA and well hedge funds have what politicians need. But, I think it is worrisome that something like this could pass at some point in time. But with foreign tax credits it should be less of a concern, no? I have friends living in Saudi, who pay no tax and will be slammed by this.

Last edited by dakman; 16.02.2012 at 21:56.
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Old 16.02.2012, 23:45
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Re: Proposed Elimination of the FEIE for US Expats

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If you get foreign tax credits, why would it be double taxation?

Just a question.

This is a Democratic bill in the House so little worry it will pass and that last point about Healthcare Savings Accounts will kill it (along with the Carry Interest subsidy). As the GOP answer to healthcare is HSA and well hedge funds have what politicians need. But, I think it is worrisome that something like this could pass at some point in time. But with foreign tax credits it should be less of a concern, no? I have friends living in Saudi, who pay no tax and will be slammed by this.
My accountant always does my taxes using the FEIE. I don't think the FTC would be that advantageous to me unless I was a high earner, which I'm not At least, that's how it was presented to me. Maybe I've been missing something.
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Old 16.02.2012, 23:50
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Re: Proposed Elimination of the FEIE for US Expats

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My accountant always does my taxes using the FEIE. I don't think the FTC would be that advantageous to me unless I was a high earner, which I'm not At least, that's how it was presented to me. Maybe I've been missing something.

First you use the exclusion, then the FTC, at least how I understand it. But obviously taxes paid on income below the exclusion are not allowable for credit. That is how I understood it back when I had CH income. No expert on this stuff so I relied on the experts.

If your tax rate in CH, is below the US rate, then you would be worse off if the exclusion ends, which is possible as you probably don't have all the deductions which help reduce US tax rates(like state taxes and mortgages). The other problem comes from stuff that is not taxed in Switzerland like capital gains.

I am not a fan of the worldwide tax but I don't think double taxation is the problem, it is more the principle behind worldwide taxation which is flawed.
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Old 17.02.2012, 00:05
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Re: Proposed Elimination of the FEIE for US Expats

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If you get foreign tax credits, why would it be double taxation?

Just a question.

This is a Democratic bill in the House so little worry it will pass and that last point about Healthcare Savings Accounts will kill it (along with the Carry Interest subsidy). As the GOP answer to healthcare is HSA and well hedge funds have what politicians need. But, I think it is worrisome that something like this could pass at some point in time. But with foreign tax credits it should be less of a concern, no? I have friends living in Saudi, who pay no tax and will be slammed by this.
Sorry, I hit send before finishing my post...

Anyway, as I said, my accountant always does my taxes using the FEIE. I don't think the FTC would be that advantageous to me unless I was a high earner, which I'm not At least, that's how it was presented to me. Maybe I've been missing something. Maybe my understanding was incorrect. Anyway, getting a tax credit is not the same as getting an exemption, and not all taxes are eligible for the credit. Without the exclusion, I would absolutely pay substantially more in taxes and this place would be even more unaffordable than it already is

Regardless, if the FTC were the answer, the prospect of eliminating the FEIE wouldn't be so alarming to so many.

As you said, it IS worrisome that this is being contemplated and may even pass. As I recall, the last time the tax exclusion was eliminated was when Jimmy Carter (D) was president, because some of those doofuses in the US Senate predicted its elimination would bring in a windfall of tax revenues It was reinstated in 1981.

The history that has been forgotten is doomed to be repeated...

Some info here if you're interested: http://nestmann.sovereignsociety.com...living-abroad/
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Old 17.02.2012, 00:13
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Re: Proposed Elimination of the FEIE for US Expats

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I am not a fan of the worldwide tax but I don't think double taxation is the problem, it is more the principle behind worldwide taxation which is flawed.
Agreed. If the worldwide taxation was eliminated, none of this would even be an issue. I think the ACA has been lobbying for that elimination, but I doubt very much it will be successful. Even with all the hue and cry over FATCA, they're still going ahead with it full steam
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Old 17.02.2012, 00:19
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Re: Proposed Elimination of the FEIE for US Expats

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Agreed. If the worldwide taxation was eliminated, none of this would even be an issue. I think the ACA has been lobbying for that elimination, but I doubt very much it will be successful. Even with all the hue and cry over FATCA, they're still going ahead with it full steam
FATCA fits the general US political reaction to overreach on any "problem". Be it Sarbox or Homeland Security or bank accounts

Worldwide taxation is not going away because Congress needs to find money and the most obvious place to find it (like increasing tax rates or reducing deductions) is not politically feasible. Hence try to ring a few billion out of unpatriotic sorts living overseas.
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Old 17.02.2012, 00:19
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Re: Proposed Elimination of the FEIC for US Expats

Just another good reason to dump the US citizenship.

Tom
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