Here are two developments in the fight for RBT.
The United States taxes on the basis of citizenship. This is sometimes referred to as citizenship-based taxation (CBT). CBT means that the United States taxes its citizens on their worldwide income regardless of where they live and earn their income. RBT Residence-based taxation taxes individuals based on where income is earned. By adopting residence-based taxation, US citizens living overseas who earn income outside of the United States or income unrelated to economic activity in the United States, would no longer be taxed on that income by the United States. Citizenship-based taxation is incompatible with the global economy of the 21st century where the tax policy of all other industrialized nations is based on residency and not nationality.
First a fund raising campaign to support research to lead towards RBT
ACA (American Citizens Abroad) believes that tax legislation is in the works and that the Congress will probably take up the subject in the Fall for 2021. Its likely hearings will be held on the subject of international taxation, in particular, corporate taxation. Discussions with offices in the Congress and the Administration indicate that individual overseas taxpayer issues will also be part of the conversation. ACA is confident that hearings touching on our issues will be held.
American Citizens Abroad Global Foundation (ACAGF) announces fundraising campaign to raise $75,000 to support research work for Residence-Based Taxation. American Citizens Abroad Global Foundation (ACAGF) today announced a major fundraising campaign in support of research that will be key in helping with the passage of Residence-Based Taxation (RBT). “Congress and the Administration will not move on tax reform for US citizens overseas unless it can understand and analyze the baseline and other data on the community. ACA produced an analysis in 2017 that provided the Congress and Administration with this information, it was very well received and now offices want updated and more detailed data,” said Charles Bruce, Chairman of ACAGF. You can find out more and make a contribution here.
Secondly a coalition
A group of organizations have joined together to form the Residence-Based Taxation (RBT) Coalition. The purpose of the RBT Coalition is to focus on the need for tax reform and RBT Residency Based Taxation for Americans who are living and working overseas and to support enactment of residence-based taxation. The RBT Coalition will present widely-accepted arguments, research and documentation in favor of residence-based taxation, making information available to the US Government, the media and the public. All materials will be approved by members.
Currently the RBT Coalition is made up of: Association of Americans Resident Overseas (AARO), American Citizens Abroad (ACA), Americans Overseas, Bright!Tax, Dunhill Financial, National Taxpayers Union (NTU), Swiss American Chamber of Commerce, White Lighthouse Investment Management. Membership is open and will grow as groups come forward to identify themselves with this effort.
Over time, all the Coalition partners have advocated for tax reform for Americans overseas. Joining forces demonstrates that support for a change from the current Citizenship-Based Taxation (CBT) regime, which taxes US citizens living abroad on all their income, including both US and foreign earned or sourced income – to a residence-based regime (taxing only income earned or sourced in the US) comes from a variety of organizations and interests. The RBT Coalition brings together groups that have traditionally advocated for Americans overseas, as well as tax advocacy organizations, members of the business community, tax and investment professionals, “think tanks”, and others.
The Coalition looks forward to adding more organizations as the community learns about the importance of having broad support for RBT that includes business, community, and professional interests. Please contact us for more information about joining the Coalition.
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