On May 13 the Center for Freedom and Prosperity criticized the Senate Finance Committee for raising taxes on Americans who live and work overseas. By eliminating the so-called "Section 911 exclusion," the Finance Committee tax bill will force many Americans to pay a second layer of tax to the IRS on incomes under $80,000 --- even though that income is earned --- and subject to tax --- in other nations.
Andrew F. Quinlan, president of the center, stated that, "It is bad policy to tax Americans who live and work overseas. Unfortunately, instead of fixing the problem by protecting all overseas income from double-taxation, the Senate Finance Committee has made the tax code less competitive by eliminating the protections afforded by Section 911."
Heritage Foundation tax expert Daniel J. Mitchell commented that, "The United States is the only industrialized nation that taxes its overseas workforce. Even countries like France and Sweden don't make this mistake. By making the law even more punitive, the Senate Finance Committee will increase unemployment, reduce American exports, and make it more difficult for US-based companies to compete in the global economy."
Veronique de Rugy of the Cato Institute added, "There is a reason why almost no governments tax citizens who live and work in other nations. Taxing overseas income is fundamentally inconsistent with sound tax policy. Gutting Section 911 puts America in the same category as Jamaica and the Philippines."
The Center for Freedom and Prosperity also announced that it has launched a major initiative to defeat the Senate's misguided Section 911 legislation. According to Quinlan, "The Coalition for Tax Competition will be beating down doors on Capitol Hill to explain why the Finance Committee proposal is bad news for America."
The Center for Freedom and Prosperity is a conservative Washington DC think tank that focuses on tax and economic issues, with special attention to efforts by the United States and the OECD to apply the policies of high-tax countries to so-called "tax havens" such as Panama.
Editor's note: After a whirlwind lobbying effort by American groups and individuals around the world this proposal was killed (for now) in the House-Senate joint reconciliation committee. The issue remains timely because the US budget deficit is up and during the debate members of Congress noted that few of their constituents or contributors were concerned about the proposal. Thus the elimination of the exemption for income earned abroad remains one of the less politically risky ways that the US government might raise taxes when faced with a continuing budget squeeze.
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Jackson, Mireya's ban on investigating corruption
Gutman, School of the Americas was THAT bad
Girvan, The Greater Caribbean This Week
HRW, Ashcroft attacks human rights law
