Reception, taxation and the Americans Abroad Caucus

Wednesday and Thursday were very productive days for Overseas Americans Week. As on the other days, we met with about fifty offices each day – about as much as we had seen in an entire week during previous OAWs.

Wednesday culminated with a reception in the evening for the Americans Abroad Caucus. In attendance were current members and potential members and staffers from numerous offices. We also had press attending the event, including our old friend Brian Knowlton of the International Herald Tribune and our new friend Tai Aguirre, who produces a radio show on ABC Networks called “The Expat Show.”

For those of you who aren’t familiar with our issues, here’s the overview of what we’re trying to accomplish this year at Overseas Americans Week:

Our three main objectives at OAW this year are (i) building support for voting legislation, (ii) building support for tax legislation and (iii) increasing the size of the Americans Abroad Caucus. I’ve already told you about the voting issue, so I thought I’d bring you up to speed on taxes and the Americans Abroad Caucus.

Taxes:

The United States is the only developed country that taxes its non-resident citizens on their worldwide income. The only other countries that do this are North Korea, Eritrea and Vietnam (until recently, that list also included Angola, but the Angolans have apparently recently seen the light).

This means that we are taxed by the United States and by the country where we live and work. The end result is that the Treasury gets to raise a little revenue at our expense, but they also make it much harder for American companies to send people overseas to promote their goods and services, putting a dent in an already dented export policy. In short, it’s not just bad for us; it’s bad for jobs back in any district that cares about generating exports of American goods and services by opening up foreign markets. Our competitors don’t have this problem. A German, French or Japanese company can freely send its employees overseas without having to shoulder this tax burden.

Americans Abroad Caucus:

Since there are somewhere around 6-7 million Americans abroad, we constitute, on average, about 2% of any given Senator’s or Representative’s constituency. We vote in the last state and district where we lived in the US, so we are literally represented by 100 different Senators and 435 different Representatives. This diffuse representation means that we are often overlooked on legislation that affects our interests. Just one quick example: the Tax Increase Prevention and Reconciliation Act (which one would assume would prevent tax increases) actually raised taxation of overseas Americans. If we had been a state of 7 million residents, that could never have happened to us. But as 2% of the average constituency of a member of Congress, we shouldn’t be surprised that TIPRA just prevented tax increases for the other 98% and raised taxes on the 7 million of us.

In creating the Americans Abroad Caucus, Carolyn Maloney (D-NY) and Joe Wilson (R-SC) (who represents my hometown of Hilton Head Island) took a very important step in rectifying that problem. The purpose of the AAC is to keep an eye out for our issues on the Hill and look out for us. Being a member of the Caucus does not necessarily mean that a Representative will vote the way we would like on any given legislation, but it does mean that they will at least be there to hear us out – to help give us a voice on Capitol Hill.