Let’s You and Him Fight

It’s late in the day and I’m tired.  Normally, at this hour I have two goals: dinner and sleep.  I will be thrilled if the cortisone allows me to sleep a solid five hours.

But all day long I’ve been thinking about something that was brought to my attention:  an interesting graphic that is circulating on social media.   It has the logos of the main Americans’ abroad organizations (ACA, AARO, FAWCO, Dems Abroad) and two text boxes.

Reading from the top the first text box calls these organizations “silent” and “disconnected,” and says this is “unacceptable.”

The author tells us more in a second text box further down and to the left.  It  cites “continued attacks on Americans abroad” and claims that Elizabeth Warren wants to “strengthen FATCA in her ‘Medicare for all’ proposal…”   And where, the author asks, are the voice(s) of the main American migrant/expat organizations in all this?

My initial reaction was a giggle.  Not a great example of effective political communication.  I actually know what all those actors and acronyms mean and I still had to puzzle out what the author was getting at.  For a moment there I wondered if the Russians had written it.

Yes, my skepticism about stuff on social media is at an all time high because manipulative monkeys with keyboards abound.  And that is where it finally clicked for me – why it was on my mind.  The graphic and text made me feel like a not very nice someone was trying to play games with my head.  A someone trying to get me angry and then clumsily trying to direct my fire against their targets to his/her own ends.  A version of “Let’s you and Him Fight” (but without the romance.)

Now that I have that off my mind, I am shaking the whole thing off and moving on.  This past year has reminded me that life is short.  I will, health willing and at my convenience, check out the Warren allegation and I will make up my own mind as to whether or not this is something I should be concerned about.  And while I will happily read any statement put out by any advocacy organization, I don’t need them to tell me how to think or who to be pissed at.  In all the years I’ve been associated with them, they have never tried to do that with me.  Strong point in their favor.

Back to the evening’s regular programming.  Tacos for dinner and I made the shells myself.

EU Study on FATCA

I completely missed this one when it came out but, thankfully, someone clued me in. (Thank you, Rebecca!)  But I was very pleased to see that the topic is still alive at the EU and that they are taking a serious look at how this legislation is working for the EU and its citizens.

In May of this year, the European Parliament’s Policy Department for Citizens’ Right and Constitutional Affairs released a study about the US Foreign Account Tax Compliance Act (FATCA) and its impact on people in the EU (and elsewhere).  You can find the full study here.

You can also watch this 17-minute presentation of the study by Carlo Garbarino, Professor of Tax Law, Bocconi University, Milan.

For Americans Abroad There is a New Tax in Town

As some of you may recall in the last round of tax reform in the US Territorial Taxation for Individuals was out but tax reform for US corporations with activities abroad was in.

At that point I just stopped paying attention because, hey, I’m not Google and I don’t know anyone abroad who is.

That was a mistake on my part because, as it turns out, Americans abroad with businesses big or small abroad are affected by provisions in the new legislation that were meant to encourage big US companies to bring their foreign-stashed cash back to the United States.

Repatriation Tax.  This is a one-time tax on profits earned between 1986 and 2017 in a business outside the US of 15.5 percent.  This tax is applied even if the business owner isn’t planning to bring those profits back to the US.  It can be paid over 8 years but if the owner elects to do this, the first payment is due on June 15, 2018.

It gets better with something called the Global Low-Taxed Income or GLTI.  This is an annual tax on businesses outside the US  and for the life of me I can’t figure out under what circumstances an US business owner abroad has to pay it and at what rate.  This is one, I think, that merits a consultation with a professional.

Now I don’t own a business in my country of residence but in the various places I’ve been in the past few years I’ve met a lot of Americans abroad who do.  Folks who own English schools, translation companies, law firms, dental and medical practices, IT consulting companies, and many small and medium businesses that are often owned jointly with a spouse.

If you are one of those American entrepreneurs abroad this is one I strongly suggest you look into.  A good place to start is a free webinar offered by an international tax lawyer in Israel, Monte Silver.

Webinar:  The impact of the Repatriation and GILTI taxes on American business owners living abroad

Thursday May 31, 2018 

10:00 am London, 11:00 am Paris/Germany, 17:00 Beijing/HK, 18:00 Seoul/Tokyo

The 2017 US tax reform created two new taxes: the Repatriation and GILTI taxes. Although intended for US multinationals like Google and Apple, these taxes have a severe impact on American citizens and Green-card holders who are professionals or business owners living outside the United States (“Expats”).

This web-seminar, intended for American tax professionals and American business owners living outside the United States, will discuss the following:

  • The problem these taxes came to address.
  • Understanding the new tax laws
  • The impact these laws have on Expats.
  • Compliance timelines, planning around the taxes, and tax advocacy activity aimed at exempting Expats from these taxes

To sign up for the seminar click on this link:   Register for the Repatriation Tax/GLTI Seminar

And lest you think that Mr. Silver is just trying to drum up business for himself, be aware that he himself is subject to these taxes the way the law is written.  In other words, he is in the same boat as all the other American business owners living abroad and he’s not very happy about it.

So in addition to trying to inform American business owners abroad on this issue, Mr. Silver has a petition up that you can sign and he’s working on efforts to get Americans abroad exempted from these taxes.

Democrats Abroad is also working on it  I haven’t seen anything from Republicans Overseas but if someone has a link, pass it along and I will add it. as is Republicans Overseas (thank you, JC) which is asking for Americans abroad to submit comments to Congress here.

How did we get here?  Short answer is:   Same Old Story.  Lawmakers, lobbyists, interest groups, political parties, and the general homeland public write, support or pass laws without thinking about the impact they may have on US citizens who don’t live in the US.   And then we have to chase after them to wake them up and clean it up.

And here we are off to the races once again….

Territorial Taxation for Individuals (TTFI)

For those of you who (like me) didn’t get the memo what we are calling residence-based taxation for Americans abroad is being called in the US territorial taxation for individuals or TTFI.

There was a strong effort to get TTFI included in the last US tax reform bill that was passed last December.  Alas, in the end tax relief justice for US citizens abroad did not make it into the bill though relief for US corporations did.  It was a huge disappointment.

Why was it not included?  I don’t know but I would very much like to get the full story. If anyone from Republicans Overseas reads this I ask that you clue us in.  If there were lessons learned, please share them.  In this interview Keith Redmond talks about RO’s lobbying efforts and about some of the difficulties they had convincing people to support TTFI.

RO is not giving up however.  they have another petition which is here.

After I signed the petition I spent some time on their website and discovered that there are some disagreements between RO and Americans Citizens Abroad (ACA). RO does not appear to support ACA’s RBT (residence-based taxation) proposal.

Since both organizations are working on behalf of the 8 million Americans abroad, it seems to me that we, the people being represented, should be aware of their respective positions and we should think carefully about which proposal most accurately reflects what we want. Then let these organizations know what you think.  The time to speak up is now.

The ACA residence-based taxation proposal is here.

The RO proposal is here.

Bonne lecture.

The American Diaspora: Outreach and Organization

It’s been awhile since I wrote about what I call the American Diaspora Tax War. Yes, I took some time off to think and observe and to get some distance from a cause that I feel very strongly about.  As a recovering alcoholic, I have to be very careful about things like “justified anger,” resentment, and frustration.  When the world isn’t going my way, is the answer to become angrier and more outraged? Or is it to calm down, think, and try to determine the best way to move forward?

What was particularly helpful was spending time in countries other than my adopted country, France.  Over the past few years when an occasion presented itself I asked my fellow Americans about what they thought about it all.  Their answers gave me new insights and a greater appreciation for the difficulties we face in organizing around the issue of citizenship-based taxation and FATCA.

Today, I thought I’d share with you some of my observations.  They are in no particular order and you may not agree with all or any of them.  Feel free to make this a conversation in the comments section.  Here goes:

The Triangle:  It’s useful to think of the relationship triangle that diasporas/migrant communities are in when they seek to act politically and transnationally.  There are three sides:  the home country government, the homeland citizens and media, and organizations that could be allies or enemies;   the host country governments, local citizens and media; and finally the migrant/expatriate communities themselves which could be organized in various ways, both locally (in the host country) and transnationally (with the home country or with other migrant communities in other countries.)

For Americans abroad fighting CBT/FATCA keeping this triangle in mind is vitally important. On the one hand we have possibilities that are not available to our fellow citizens in the home and the host countries; there are two places we can act and not just one.  On the other hand we are, I think it’s fair to say, the weakest side. In neither the home or the host country are Americans abroad any more than a small minority.  Our issues are generally not very high on anyone’s political agenda.

So a first step for all of us is to acknowledge the complexity of the triangle relationship and our relative lack of power within it. Does this mean we should just throw up our hands and give up? I don’t think so.  I just think we need to be a lot savvier about where we sit, and a lot more knowledgable about the local and home country political arenas.

Not to mention that, in my opinion, we still have not reached a level of organization and solidarity that would allow us to be taken seriously.  There is work to be done on our side of the triangle – to make it stronger and more credible:  international organization and outreach.

Spreading the word:  Want to know how many Americans I encountered in my travels who were not aware of FATCA or had only a hazy notion of the implications of citizenship-based taxation?  A lot.  Most even.  For those of you who are living and breathing the nightmare this may come as a surprise to you.  And I only met one person in Japan who was aware of the Japan/US FATCA agreement.  For those of you who belong to an American Abroad organization, you might be even more surprised how many people have never heard of AARO or ACA.  None of this is on their radar.  Our task is to get it there and we have not done a good enough job of finding them so we can make our argument and earn their support.

American communities have very different circumstance depending on the host country. In some places there are so few Americans and they are so scattered about the country that finding them (presuming they wish to be found) is hard.  But it’s not impossible.  They can be located, for example, in trade or professional organizations or in migrant groups that call themselves “international XXXX.”  One way to go about making contact is “snowballing.”  Find a few Americans locally with a lot of time in the country and good networks.  Get their support and ask them to go out and convince others and so on and so forth.

This is important because even though we may share a nationality local people are almost always more credible than outsiders.  The Americans I met in Japan were very pleasant people but I was an American abroad from France and how could I possibly understand the American in Japan perspective?

Organization:  We have a cause but we don’t, in my opinion, have a satisfactory organization.  What we have is a lot of committed people doing what they can individually or through different organizations like AARO, ACA, RO, DA, Brock and many others. Why is this not enough?

Not enough people for one thing.  We just can’t get huge numbers of people to sign petitions, write letters and so on. When the word goes out to support some initiative, it goes out to a relatively small number of people in the know  (or on the mailing or FB list) and doesn’t spread beyond that.

Some Americans abroad are fearful and don’t want to hand over their names and contact information to any organization lest the US government get that information for their own purposes.  Others are put off by the location, perspective or affiliations of some groups:  they don’t like the commentary at Brock; they wouldn’t join any organization with Republican or Democrat in the name; they look and see that one organization is based in France and the other in the US and they live in India.  Membership dues are also an issue for many.

And finally all these organizations don’t necessarily agree with each other on how to go about fighting CBT/FATCA.  The different proposals can be very confusing and to someone who is already leery about joining any movement, the arguing itself is a reason for some to pass on the whole business.

Something I became aware of in my travel is that quite a few people are DIYing their own personal strategies for dealing with FATCA/CBT which may be imperfect but still makes them feel that they aren’t compelled to join anything or participate in anything.  Those folks are a tough sell and all of the above things tip them to the side of hunkering down and staying out of sight.

I think the time has come for us to think about alliances and federation.  I think we need an organization devoted to the fight against FATCA/CBT which has no dues, no political affiliations, and is organized at the country level or below.  All Americans abroad would have the option of joining anonymously.  This organization would not take a stand on any particular FATCA/CBT proposal but could include the work of all organizations working on the issue and their efforts at outreach.  A single website would gather together all the links to different initiatives, news reports and perspectives.  It could include country reports by local American communities so that we can all better understand what is going on outside our own little corner of the world.  Hopefully, this would encourage different organizers in different countries to form their own alliances.   Ideally, it would promote the broadest circulation of ideas.

And above all, no forums.  Look, there are plenty of places out there where we can write to our heart’s content about how we feel about all of this.  The focus here would be different:  outreach, alliance, information exchange.  Think of it as a simple federation where we are united by the fight against FATCA/CBT and the devilish details and disagreements can be taken to email.

The ultimate goal of this umbrella organization would be to strengthen our side of the triangle, no more no less.   I think that’s something worth doing.  I can’t see how we will achieve anything without it.

Your thoughts?