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Wealth Briefing (April 26, 2022)

Changing US Tax Model Won't Damage Revenues – ACA

"For decades, Americans living overseas have faced the headache of a worldwide tax filing regime enforced by Uncle Sam, contrasting with how citizens in almost all countries pay tax based on residence rather than original citizenship.

A group advocating for US expats argues that they could be taxed based on residence rather than place of birth – without the US Treasury losing revenue.

American Citizens Abroad said its arguments are bolstered by one of its own studies of residence-based tax, produced by the District Economics Group for American Citizens Abroad Global Foundation (ACAGF), ACA’s sister organization.

The study shows that residence-based taxation can be made revenue-neutral, without the US Treasury losing revenue. “Long-term American residents abroad could seamlessly move from citizenship-based taxation, the current set of rules, to RBT.

No one would be forced to do this. No one would be made worse off, as the existing foreign earned income exclusion rules would remain for those wishing to use them,” ACA said in a statement yesterday."