ACA Submits Proposal to Senate Finance Committee

ACA, Inc, has submitted a detailed proposal concerning taxation of Americans abroad to the Senate Finance Committee on International Tax Reform.

ACA appreciates the opportunity to set forth tax reform recommendations in response to Chairman Baucus’ request for inputs on Discussion Drafts issued by the Senate Finance Committee and hopes that they will be taken into consideration by the Committee.

The main conclusions in this proposal are:

  • Residence-Based Taxation (RBT) should be legislated as the default mode of taxation of Americans abroad.
  • An exit tax on deemed dispositions should be designed to address Congress’ concern that the few extremely wealthy Americans who may choose to move abroad should pay their fair share on capital gains.
  • A streamlined, comprehensive and non-punitive compliance program must accompany the introduction of RBT for those Americans already resident overseas who have not been in reporting compliance under present citizenship-based tax rules; neither should they be subject to an 'exit tax.'

The full proposal (pdf) can be seen here...