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Will Holding's Tax Fairness Act for Americans Abroad Hold On?
A new Congress means the bill will need to be re-introduced
Prior to the Holidays, much of the conversation among Americans living overseas was the highly anticipated bill from Congressman George Holding which put forward proposals to move from a Citizenship Based Taxation to a Residency Based Taxation. The proposals would offer relief for US Citizens residing in the UK and overseas, as well as Accidental Americans, who are currently required to file tax returns to the US regardless of their residency or place of income.
Although anticipated by many as an early Xmas treat, and a much needed spotlight on the issue of taxation of US Citizens living abroad, the adjournment of the 115th Congress means that the bill will not automatically progress into the 116th Congress, which was formally sworn in on January 3, 2019.
The onus is now on Rep. Holding, or other members of Congress, to re-introduce the bill which would allow it to proceed through legislative procedures. Without being re-introduced, the Tax Fairness Act for Americans Abroad will not proceed.
When the Act was formally introduced on December 20, 2018, a number of organizations used the opportunity to highlight the importance of the proposals. AARO (The Association of Americans Resident Overseas) President Neil Kearney commented that "AARO has been working for years with other organizations for relief for Americans abroad from the US citizenship-based taxation regime. A move to a residence or territorial-based taxation system will be a large part of our advocacy work in 2019. We are heartened by the introduction of Congressman Holding's bill and will study it carefully in the days to come. It is our hope that this bill will not only raise awareness of the harm citizenship-based taxation has caused Americans abroad, but that it will be a catalyst for bi-partisan territorial/residence-based taxation legislation in the next Congress via collective action by AARO and other organizations."
The bill also received support from both Democrats Abroad and Republicans Overseas. In a blog posted on December 21, Democrats Abroad welcomed the bill, whilst pointing out that "coming on the eve of adjournment, it cannot be given serious consideration or debate. That said, it is a milestone for advocates of a switch from the current US system of Citizenship Based Taxation to the globally-accepted norm of Residency Based Taxation (RBT), and raises to attention important issues that Congress must address with hearings in the 116th Congress." Solomon Yue, Vice Chairman and CEO at Republicans Overseas, also welcomed the Act, Tweeting his support of end to Citizenship Based Taxation (below).
Thank you Grover for your support of #TFFAAA. It is truly historical. When it is enacted, it replaces this 155 years old citizenship based taxation regime (#CBT) with #TTFI to end double taxation for 9 million overseas Americans. https://t.co/OEjRLvaGoT— Solomon Yue (@SolomonYue) January 3, 2019
Despite bi-partisan support from groups which advocate on behalf of US Citizens abroad, the Act's introduction prior to the adjournment of the 115th Congress means that those seeking to campaign for the end of Citizenship Based Taxation must continue to make their case as the 116th Congress settles in. Perhaps not the Christmas Present many Americans living overseas were hoping for, but the introduction does continue to ramp up the coverage of the situation US Citizens and Accidental Americans face when living abroad, which is never a bad thing.
Time to start writing to your Representative ...