On January 17, Patrick Gleason, Director of State Affairs for Americans for Tax Reform (ATR), spoke about the continuing and highly-disputed policy of taxing U.S. citizens living and working abroad and why this policy was omitted from the most recent tax reform laws approved in December 2017. Before an audience of more than 70 members of the AIC, American Citizens Abroad (ACA), and guests gathered at the Ritz Carlton’s Hotel de la Paix, Gleason addressed the ATR’s plan for eliminating this controversial issue from U.S. tax law within the coming years.
A product of the Reagan Era, Americans for Tax Reform was founded in 1985 by economist and former U.S. Chamber of Commerce speech writer Grover Norquist. It remains the most well-known (and controversial) player in opposing federal and local efforts to raise taxes on individuals and businesses. ATR’s lobbying efforts have been influential in numerous tax reform laws that have been passed over the past thirty years. Known for its conservative agenda, Norquist and Gleason are frequent guests on media outlets as well as participants on countless public and private seminars and symposia, and numerous state and federal congressional hearings on the subject.
Gleason opened with a quick review of the major elements of the December 2017 tax reform plan, including reducing the U.S. corporate tax rate from 35% to 21%, and offered examples of how the reduced rates had encouraged more than 170 coupons in the U.S – from giants like Walmart to many far smaller companies -- who were passing on the savings to their workers in the form on year-end bonuses of $1000 or more.
This drew some negative responses from a crowd more interested in hearing what the on-going efforts were to address the foreign taxation issue than to hear a trumpeting the success of the recent and still controversial tax overhaul. Among the major grievances cited were the 3.8% tax imposed for the Affordable Care Act in 2009 and long-standing argument against paying taxes for which expats receive no benefits.
Gleason staved off the criticisms and added that the Trump tax plan would result in wage increases for American workers and that the U.S. tax corporate tax rate had gone from the most expensive in the world to around 20th place because of the December 2017 revisions.
Returning to the subject at hand, Gleason said the Trump Tax Plan ended double taxation for U.S. corporations and that the same logic should be applied to individuals, too. Some audience members advocated surrendering their American passport to counter the overseas tax rules, which allow multiple layers of taxes in certain scenarios, but this was met with concerns about future Social Security allowances by some. Others cited the difficulty in working with Swiss banks to secure even basic accounts in many instances.
An advocate for ending the US’s overseas taxation policies, Gleason added that 2018 would be a year to prepare wide-ranging education initiatives aimed at federal and local congressional staffs – many unaware of the overseas tax rules to begin with, and with select members of the Senate Finance and House Ways and Means committees. He also sees the largely, public misperception of expats as tax dodgers and cheats needed to be addressed. These are the ATR’s key strategies for eliminating the foreign taxation statutes in 2019 ahead of the 2020 Presidential election.
Before taking questions from the feisty audience, Gleason closed his presentation by noting three areas of concern with regard to future tax revisions:
a) how state tax codes are being affected by the Federal tax code revision,
b) the amount of $3-5 trillion in “unfunded pension liability, and
c) how the 2018 and 2020 elections and future votes on tax legislation are almost certainly to be affected by ongoing redistricting (gerrymandering) of legislative districts.
Special kudos to ACA President Roland Crim and AIC Executive Committee member Francis Pribula for orchestrating the event, and to volunteers Isabel Montagne and Jing Pillet for their staffing and support.