A plan to boost taxes on US citizens living abroad while slashing other taxes is drawing an angry response from businesses as well as organizations representing US expatriates.
The bill drafted by the Senate Finance Committee, which seeks to cut some US$350 billion overall over a 10-year period, would recoup some of that by eliminating a longstanding tax exemption for Americans living overseas.
The Senate bill still must be reconciled with legislation passed by the House of Representatives.
To offset some of the tax cuts, the Senate plan includes proposals to raise revenues by eliminating tax breaks to some US firms that move offshore, and -- in a more controversial move -- ending the US$80,000 annual income exclusion for US citizens abroad, known as the Section 911 exclusion.
Without that exclusion, most Americans abroad would be taxed twice, because the US, unlike most other countries, taxes its citizens living anywhere in the world.
David Hamod, a Washington consultant and executive director of the Section 911 Coalition, which represents US firms, chambers of commerce and schools operating overseas, said the Senate panel made a huge mistake.
"The committee was looking for a quick fix, but I don't think they fully understood the magnitude of what they were doing," Hamod said, arguing that the exemption for US workers abroad got muddled in with the question of offshore tax shelters.
"There was some confusion about offshore companies and overseas Americans, but the two are almost diametrically opposed. ... Sending Americans abroad creates jobs and promotes American exports."
But Senator Charles Grassley, who crafted the bill, said it was no mistake.
"Part of tax relief is tax fairness," he said. "I have to ask whether it's fair for taxpayers to underwrite the cost of sending employees overseas ... an American soldier who spends a year in Kabul has to pay his full US tax obligation, but an American working for a private company in Bermuda pays no taxes."
Opponents contend that companies and employees would face double taxation under the proposal.
"The tax exclusion for overseas income should be expanded, not scrapped," said Thomas Donohue, president of the US Chamber of Commerce.
"These workers play a vital role in promoting our national interests, and their presence helps support US exports and creates US-based jobs."
Official estimates put the number of US private citizens abroad at around four million, but Hamod said the figure is closer to 10 million, because the official number includes only those who have registered with US embassies.
Congressional experts say that ending the tax exclusion would bring in some US$35 billion over 10 years.
US business groups with overseas links and others have started an intense lobbying campaign to maintain the exclusion, arguing that the Senate bill would make it much harder and more costly to send Americans to overseas posts.
"The United States is one of the few nations to tax its citizens when they live and work in other nations -- the misguided practice of `worldwide' taxation," said Daniel Mitchell, a researcher at the conservative Heritage Foundation.
Eliminating the exclusion, said Mitchell, "hurts US companies trying to compete in global markets and reduces American exports. It also is a form of double taxation, since US citizens employed in other nations are subject to all applicable taxes in those nations."
Senate Democratic leader Tom Daschle said his party would fight to strip out that provision in the bill.
"There are tens of thousands of people who work abroad and work with an understanding that they're helping America's economy because of our globalized economic interdependence," he said.
"We need people abroad to take those jobs, to continue to grow this economy as much as we can ... This is a huge tax increase on working families all over the world at the very time when we need them, perhaps, even more than ever."
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique