'Tax reform' is useless to Americans abroad
As politicians make noises about tax reform, with media outlets following suit, literally millions of Americans around the world are looking for one simple change in the world's most onerous, punitive tax system. You can read the news and listen to politicians until your eyes fall out and your ears fall off, and you will find not one word about it.
We are looking for the abolition of America's absurd and larcenous practice of demanding taxes from its citizens living abroad.
Much is made of the reform's repatriation of international corporate profits, and one can even hear the term "territorial tax system" uttered now and then, but on the individual side, there is no mention of liberating 7 million Americans – plus their families, business partners, various visa holders, and others considered "U.S. persons" – from the worldwide clutches of the IRS.
If you are one of these many people, and you do not live in the United States – indeed, even if you have never been to the U.S. – the IRS requires that you nonetheless file American tax returns, along with a copy of your tax return from your country of residence, plus all your banking and investment accounts and the values thereof. Moreover, if it is deemed that you would have paid more under U.S. tax law, you are required to pay the difference.
This is the very definition of taxation without representation.
To those of us affected, this outrage is nothing new. But to listen to journalists and politicians banging on about "tax reform," it is as though we do not exist.
In a dozen years advocating on this issue, I have encountered precisely one politician who understands it: former congressman Mick Mulvaney (R-S.C.), who currently serves as President Trump's budget director.
Senior as Mulvaney's position is, the OMB director does not write legislation.
Certainly, after I explain the problem, politicians have expressed generic concern. But, for all the action I have seen, I just get rolled into the amalgam of their made-up grocery store guy.
Every quarter, a new record is set for the number of Americans renouncing their citizenship. The reason we know this is that the U.S. Treasury Department publishes these people's names in a petty attempt to shame them for opting out of an unjust system.
The institutional assumption is that these former Americans have done something ignoble that should be brought to light. In fact, the opposite is true: it is unbecoming a nation that styles itself the "land of the free" to make financial prisoners of its citizens.
Until it liberates millions of people who neither live in America nor make use of its services, and who have already paid their taxes elsewhere, this supposedly simpler, fairer tax reform is nothing of the kind.
Theo Caldwell is a dual American-Canadian citizen living in Toronto. Contact him at firstname.lastname@example.org.