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Thu Feb 11, 2016, 07:44 PM

3 Democrats sound off on residence-based taxation. One surprise within a surprise

Hillary--wishy-washy "studies are needed," in other words, I don't wanna touch this. Bernie--basically the same thing, goes on about billionaires in the Caymans (all 4 of them), avoids the rest of us. Plus Roque de la Fuente.

HUH? Roque de la Fuente? Has ANYBODY ever heard of this guy? I sure haven't. But whoever he is, he DOES take a stand on residence-based taxation, and says so in no uncertain terms. I'm not a complete one issue voter, so I'm not tossing my vote away on him, but he's the only one who was willing to take a stand.

Here are the responses to a Democrats Abroad inquiry:


Hillary:
RBT: Would you support the replacement of the current system of taxing overseas Americans, known as citizenship-based taxation, with a system of residence-based taxation?

I know that most Americans living abroad are just trying to make a living and provide for their families. I believe that we need a broad discussion about reforming our tax code to cut taxes for hard-working, middle class American families living both here and abroad, and to ask the wealthiest Americans to pay their fair share. That means, among other things, closing loopholes that allow many hedge fund managers to pay a lower tax rate than nurses or teachers and supporting proposals like the Buffet Rule. But it also means closing loopholes that create incentives for corporations to ship jobs and profits overseas, and making sure that the wealthiest Americans can’t move overseas to avoid paying taxes. Americans, regardless of where they live, often benefit from American education, infrastructure, legal protections, and trade policies. This is a complicated issue and I will work with Americans living abroad and members of Congress to cut taxes for hardworking, middle class Americans, but also avoid creating any adverse incentives for those looking to avoid contributing their fair share.

FBAR: Would you support reforms to FBAR regulations to address these concerns and inequities?

As president, I will work with Americans living abroad and members of Congress to examine filing requirements with the aim of avoiding redundancies and minimizing unnecessary paperwork and confusion. Any reforms would also need to be scrutinized to avoid weakening government capacity for monitoring illegal activity or tax avoidance facilitated by holding foreign bank accounts.
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In other words, skirt the issue. Very disappointing.

Bernie:
Question: Would you support the replacement of the current system of taxing overseas Americans, known as citizenship-based taxation, with a system of residence-based taxation?

This is something that deserves serious consideration. Other than Eritrea, the U.S. is the only country that I am aware of that requires the filing of two annual tax returns to reconcile complex tax codes of different countries.

In my view, we can provide tax relief to middle-class families living overseas, while prohibiting large corporations and the wealthy from avoiding over $100 billion a year in taxes by stashing their cash in the Cayman Islands and other offshore tax havens.

Question: Would you support reforms to FBAR regulations to address these concerns and inequities?

Yes, I look forward to working with Democrats abroad to address these concerns and make this system more equitable. As you know the FBAR reporting threshold has not been adjusted for inflation since it was first initiated in the early 1970s. We need to look at that. We also need to look at removing the unnecessary duplication in the reporting requirements between FBAR and FATCA.

I am also sympathetic to the concerns raised by older Americans living abroad with the mandatory online reporting requirements that are now in place.

At a time when this country has an $18.4 trillion national debt and so many unmet needs, I do believe that we need to do everything we can to eliminate tax evasion. I also believe that we should be rewarding, not punishing, middle-class citizens living abroad who are following the rules. In my view, we can and we must accomplish both of those goals.
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Same old platitudes. Yes, Bernie, we all know about the Cayman Islands. How about the 99.9% of us who DON'T hide money there (or anywhere else, for that matter)? We know who you DON'T want to help. That is not what the question was. The question was about the other 6 million of us.

Rocky de la Fuente, whoever the hell THAT is:

2. RBT: Would you support the replacement of the current system of taxing overseas Americans, known as citizenship-based taxation, with a system of residence-based taxation?

YES
Citizenship-based taxation places an undue burden on U.S. citizens living abroad. In effect, it imposes dual-tax exposure upon individuals who, other than on a limited basis, do not represent an economic burden on the programs and services that our federal government provides. Residence-based taxation reflects one’s rationale contribution to the programs and services that affect the lives of those who reside in any given country and city. As Democrats Abroad so cleverly implies, unless the United States aspires to become the next Eritrea, it is time to join the rest of the world in recognizing the nexus between taxation and the programs and services such monies are meant to fund.

3. FBAR: Would you support reforms to FBAR regulations to address these concerns and inequities?

YES
In our federal government’s zeal to create agencies and promulgate regulations, it often fails to do due diligence with regard to redundant and conflicting regulations. The overlap between FACTA and FBAR is an example of such failure. Both address aspects of tax evasion, and while FBAR’s reach may be more comprehensive, a single regulatory approach would be more effective and efficient and far less burdensome with respect to law-abiding citizens living abroad. I would suggest thinking beyond implementing reforms to FBAR and FACTA and explore how a more focused, consolidated approach might be enacted to concentrate on the actual activities that are intended to be policed while eliminating redundant reporting requirements and facilitating alternative forms of filing so as not to unduly burden law-abiding citizens abroad.
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WTF???????????? WHO THE HELL IS THIS GUY? I've never heard of him until just now, when I read the positions on the Democrats abroad page. Whoever he is, he's the only one who had the guts to come out and say YES. With my luck, he'll be in outer space on every other issue, but he's taking a stand here, and it's on our side.

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Reply 3 Democrats sound off on residence-based taxation. One surprise within a surprise (Original post)
DFW Feb 2016 OP
Recursion Feb 2016 #1
DFW Feb 2016 #2
davidpdx Feb 2016 #3
DFW Feb 2016 #4

Response to DFW (Original post)

Thu Feb 11, 2016, 08:14 PM

1. I did a GDP post about de la Fuente that I now can't find

He is on the Democrats Abroad ballot (remember our Global Primary is on Super Tuesday) and to the extent that anybody does seem to talk about expat issues, it's him. Unfortunately, he's also a very conservative "business-friendly" Democrat (not that there's anything wrong with being actually business friendly, but I get nervous when people say that first).

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Response to Recursion (Reply #1)

Thu Feb 11, 2016, 08:36 PM

2. Yeah, that's the impression I got, though I didn't have much time to delve. It's 1 AM here now

And I still have 90 minutes worth of paperwork to do.

Business-friendly is OK as long as that's not the major focus. If he's a one-trick pony, than whatever sympathies he may have for our plight, in the major scheme of things, it won't help the country any. So--no matter how thrilled I am to hear SOMEONE take a stand, the fact remains that the person I see as our next president (i.e. either Bernie or Hillary) continues to duck the question with an eye toward ignoring us altogether (once again) once they get that "-elect" title before their name on the 11 o'clock news.

Saying "studies are needed" or lumping us all in with tax-evading "billionayahs" are about as much help as "I don't give a rat's ass," and are far less honest ways of saying so (at least someone told Bernie about Eritrea, and he remembered it).

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Response to DFW (Original post)

Fri Feb 12, 2016, 10:46 PM

3. Both gave disappointing answers

Which leads me to believe that getting anything done is going to be next to impossible. FBAR and FACTA need to be reformed so that expats don't have to go through the paperwork. I had to file for FBAR for this last year and just pray I did it correctly. My account slipped over the limit once triggering the need for me to fill out that paperwork. What a damn pain in the ass.

Now I don't make a hell of a lot of money, but the cost of living here is not high. So I am fortunate enough to be able to save. But if I want to save money my hands are tied. Yesterday I had a delivery that helped solve that problem. Now I have plenty of room under the cap so I won't have to file the paperwork for this year.

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Response to davidpdx (Reply #3)

Sat Feb 13, 2016, 12:13 AM

4. I was extremely disappointed as well

I make decent money, but Germany is expensive to live in, and the paperwork for normal mortals is already overbearing. The lost time, accountants' fees, and huge tax burden (until the two sides can reach agreement) are punishing.

The evasive, de-facto "I don't know, and can't be bothered" answers of both Clinton and Sanders are insulting to the 99.9999% of us that are not billionaires, and don't have secret money stashed away in some offshore tax haven. I would have preferred to hear "you know, I am not informed enough on the subject to give you a coherent answer."

I know, I know, this is what politicians do. It's not new. Back in the Nixon era, when unfavorable press led Nixon to contemplate a government news channel (a young Roger Ailes was with him at the time, so you know where Fox Noise was germinated), so that the Nixon Administration could generate--and control--their own news. The Washington press was, understandably, appalled. My dad, a DC journalist, called up Mike Mansfield, who was the Democratic Senate Majority leader at the time, and no friend of Nixon's. Expecting him to denounce the suggestion as something akin to Göbbels' "Propagandaministerium," , my dad was shocked at Mansfield's response. He said that it was an interesting concept, and needed to be studied before giving an opinion. My dad was furious that Mansfield needed even a second to condemn the idea.

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