How Trump can follow through on his campaign promise to stop double-taxing American expats, Op-Ed by Charles Bruce | Yahoo Finance
Yahoo Finance, November 18, 2024
How Trump can follow through on his campaign promise to stop double-taxing American expats, Op-Ed by Charles Bruce
Charles Bruce is the chairman of American Citizens Abroad Global Foundation and formerly Counsel, Senate Finance Committee. ACAGF is a bipartisan charitable organization.
In the final weeks of his campaign, President-elect Donald Trump appealed to an often-overlooked constituency, Americans overseas, with a pledge to end the “double-taxation” of their income.
But unlike many Trump campaign talking points, this isn’t a partisan issue. In fact, it’s one with broad cross-aisle support. A coalition of organizations ranging from Democrats Abroad, an arm of the Democratic Party, to the fiscally conservative National Taxpayers Union all support eliminating undue tax burdens on Americans overseas.
From a policy perspective, eliminating the current requirement that American expats pay taxes on their foreign income to the United States as well as their country of residence makes perfect sense. Only two other countries require citizenship-based taxation: Eritrea and North Korea. As a simple matter of fairness, no U.S. citizen should be taxed twice.
But it’s not just about the IRS bill. Expats also face significantly more paperwork, requiring them to hire professional help that may be hard to afford. Contrary to the stereotype perpetuated by the media, most Americans abroad aren’t living in fancy villas. A majority of Americans abroad have a gross household income of less than $100,000.
The tax treatment of income earned overseas also hurts our economy and the economies of our trading partners. While studying and working abroad, Americans acquire skills in all kinds of fields, including finance, natural resources, the sciences, and engineering. When they come home, they bring their new knowledge with them to benefit U.S. enterprises.
Many Americans abroad work for U.S. companies—and thus help bolster U.S. businesses expanding into new markets. And many work in jobs that promote trade.
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