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SEAT Working Papers Series - Extraterritorial Taxation #7: Unlocking the Complexities and Discrimination of Citizenship Taxation Laws

January 31, 2024 - Participants include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)

SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.

Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.

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SEAT Working Paper Series #2023/7

Extraterritorial Taxation #7: Inherently Suspect

The U.S. extraterritorial tax system is subject to strict scrutiny – the highest level of equal protection scrutiny. As such, it is “inherently suspect,” in violation of 14^th Amendment equal protection.

Available at: https://ssrn.com/abstract=4465558.

The following description has been generated by AI ...

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Welcome to Episode 7, a pivotal part of our comprehensive dialogue on citizenship taxation, hosted by John Richardson. In this enlightening episode, we delve deep into the law of equal protection and examine how citizenship taxation interplays with this fundamental principle.

Our conversation focuses on the role of nationality, race, and alienage in deciphering whether laws exhibit prejudice and antipathy. Laura brings forth critically acclaimed cases that throw light on why discrimination based on nationality and the country of origin is deemed unlawful without a strong justification. The episode further scrutinizes the U.S. Extraterritorial Tax System's potential bias effects depending on an individual's nationality.

Sit back and join us as we explore the law's specific terms, the pressing government interests, and the dissimilarities between a general assumption of equality and concrete reasons justifying the present situation. Listen in for a better comprehension of inherently suspect laws, including nationality-based discrimination.

This academic discussion dissects historical rulings and current opinions about citizenship-based taxation from various courts of justice, including the Supreme Court of Canada and the Federal Court of Canada. We also probe into how citizenship-based taxation transformed from a mere prerequisite for employment eligibility into a governmental tool for behavior control.

Moreover, we examine how taxation, a topic primarily associated with revenue generation, intertwines with justice, fairness, and societal organization. Finally, we touch on the controversy surrounding nationality-based taxes in the US and the financial implications of the American extraterritorial taxation policy on overseas American citizens, stimulating thoughts on a need for policy reform.

Catching Up With Amy From Sydney - Unraveling US Taxation and Voting for Expatriates

January 28, 2024 - Participants include:

 

Amy Purcell - @Amy_From_Sydney

 

John Richardson - @ExpatriationLaw

 

Note the following description was generated by AI - this will be interesting.  AI describes this podcast as follows ...

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In this captivating episode, John Richardson engages in a revealing conversation with Amy from Sydney, a dual US-Australian citizen, about the knotty issues of taxation, citizenship, and financial concerns faced by US citizens living overseas. The dialogue dives deep into the intriguing debate about the definition of a 'US Person' and the trials implicated by dual citizenship.

The episode proceeds to demystify citizenship taxation, challenging common conceptions and shedding light on hidden terms and misconceptions. As the conversation unravels the complex realities of the US worldwide taxation system, it emphasizes the need for much-needed reforms to alleviate the challenges faced by dual citizens.

Further into the discussion, we delve into the compelling concept of a potential 'Great Australian U.S. Citizen Buyback Program,' exploring the advantages and drawbacks that come with it. Also, the revolutionary idea of shifting from citizenship-based taxation to residency-based taxation is examined as a potential ground-breaking solution. This episode encapsulates the grave dilemmas dual citizens encounter and discusses potential practical solutions.

We also touch upon political elements, like positions of different candidates on relevant topics such as residency-based taxation, and delve into controversial issues like overseas voting, and potential foreign interference in US elections. The episode explores the paradoxes and complexities faced by overseas voters who are misinformed about the US voting system whilst being subjected to its electoral laws.

The episode concludes with gripping real-life narratives and a controversial shared take on the divided perspectives on US expatriates' voting rights. Join us as we navigate the labyrinthine landscape of global citizenship, taxation, and offshore voting through engaging discussions and stimulating dialogues! Tune into this episode especially if you are a US expat wrestling with taxation and citizenship issues, or simply eager to comprehend the complexities of global citizenship and voting.

SEAT Working Papers Series - Extraterritorial Taxation #6: No Compelling Governmental Interest

SEAT Working Paper Series #2023/6

January 15, 2024 - Participants include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)

SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.

Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.

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Extraterritorial Taxation #6: No Compelling Governmental Interest

This paper confronts the rationales for U.S. extraterritorial taxation with the reality of the system in place today and explains why the United States does not have a compelling interest in taxing overseas Americans in the manner it does.

Available at: https://ssrn.com/abstract=4465450.

SEAT Working Papers Series - Extraterritorial Taxation #5: Refuting the Rationales

December 18, 2023 - Participants include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)

SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.

Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.

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SEAT Working Paper Series #2023/5

Extraterritorial Taxation #5: Refuting the Rationales

This paper summarizes and refutes the most commonly offered rationales for the taxation by the United States of the worldwide income of overseas Americans.

Available at: https://ssrn.com/abstract=4465327.

To Renounce Or NOT To Renounce: The Problem is HOW To Make The Renunciation Decision

December 13, 2023 - Participants include:

Vance - @MyLatinLife

John Richardson - @ExpatriationLaw

 

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This is the "tail end" of a podcast that I did today with Vance @MyLatinLife AKA MyLatinLife.com

It was a very interesting discussion about dual citizenship and the tremendous benefits of dual citizenship from birth (the potential avoidance of "covered expatriate" status) if one is considering renunciation of U.S. citizenship. The complete podcast will be released in January 2024 on the My Latin Life Youtube Channel.

There are many people who are tortured by the decision to renounce. Here are some of my thoughts on:

"How To Make The Renunciation Decision".

Additionally, we discussed whether other countries (including Canada) might adopt "citizenship taxation".

Although the future can never be predicted, I suspect that:

Canada will NOT follow the United States and adopt "citizenship taxation".

 

 

 

 

 

 

 

 

 

Moore v. United States -December 5, 2023 - The Argument Before The Court

Moore v. United States - December 5, 2023

Audio of the actual hearing:

This podcast is an audio of the actual argument that took place before the court. The relevant link to the Supreme Court site is:

https://www.supremecourt.gov/oral_arguments/audio/2023/22-800

Significantly a transcript of the argument is available at:

https://www.supremecourt.gov/oral_arguments/argument_transcripts/2023/22-800_9ol1.pdf

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SEAT President Dr. Laura Snyder attended the hearing. A fascinating podcast discussing her observations (right after the hearing ended) is available here.

https://prep.podbean.com/e/december-5-2023-debriefing-the-moore-case-what-happened-at-the-hearing/

SEAT along with AARO authored an amicus brief which explained the how the 965 transition tax impacted Americans abroad.

IRS Medic hosted a podcast both before, during and after the Supreme Court hearing. A link to that podcast is here:

https://twitter.com/ExpatriationLaw/status/1732254619860893932

 

 

 

December 5, 2023: Debriefing The Moore Case - A View From Inside The Courtroom - It’s All In The Snyder Report

December 5, 2023 - Participants include:

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

On December 5, 2023 the Supreme Court of The United States heard the Moore transition tax appeal. SEAT President Dr. Laura Snyder was present in court to hear the oral arguments and observe the Justices.

The oral argument can be heard here.

More than 50 blog posts discussing the US transition tax may be found here.

 

 

 

 

SEAT Working Papers Series - Extraterritorial Taxation #4: Why Nothing Changes

December 3, 2023 - Participants include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)

SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.

Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.

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Extraterritorial Taxation #4: Why Nothing Changes

This paper describes the obstacles to change of the U.S. extraterritorial tax system.

Available at: https://ssrn.com/abstract=4465208.

 

 

The Ron Wyden ”Billionaires Tax Act” - The Future Of US Taxation And Income Realization

December 3, 2023 - Participants include:

 

Virginia La Torre Jeker - @VLJeker

John Richardson - @Expatriationlaw

On November 30, 2023 (on the eve of the US Supreme Court hearing in Moore), Senator Ron Wyden (along with other prominent Democrats) introduced the "Billionaires Tax Act".

Further information is available here:*

https://www.finance.senate.gov/chairmans-news/wyden-leads-democratic-colleagues-in-introducing-billionaires-income-tax

Join John Richardson and Virgina La Torre Jeker in this podcast which includes a discussion of:

 

- why the Billionaires Tax Act is an attempt to enact the Biden Green book proposals

- why the proposed legislation includes people who are NOT billionaires

- why an "applicable taxpayer" under the Billionaires Tax Act is similar to a "covered expatriate" under the 877A Exit Tax Regime

- how the Billionaires Tax Act treats all the assets of "applicable taxpayers" as PFICs 

- how the Billionaires Tax Act makes the expatriation rules at least twice as punitive as they already are

- why for those who want the possibility of living outside the United States, expatriation is the best financial investment one can over make

- why it's better to pay 23.8% now rather than 49% later

- and more ...

 

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*NOVEMBER 30,2023

Wyden Leads Democratic Colleagues in Introducing Billionaires Income Tax

Legislation cosponsored by 15 Democratic Senators would close loopholes in the tax code that let billionaires avoid paying their fair share

Washington, D.C. – Senate Finance Committee Chairman Ron Wyden, D-Ore., today led colleagues in introducing the Billionaires Income Tax Act, legislation to ensure billionaires start paying their fair share in taxes.

Wyden is joined by U.S. Senators Debbie Stabenow, D-Mich., Bob Casey, D-Pa., Sheldon Whitehouse, D-R.I., Elizabeth Warren, D-Mass., Brian Schatz, D-Hawaii, Mazie Hirono, D-Hawaii, Tammy Baldwin, D-Wis., Sherrod Brown, D-Ohio, Bernie Sanders, I-Vt., Jeff Merkley, D-Ore., John Fetterman, D-Pa., Tina Smith, D-Minn., Peter Welch, D-Vt., Jack Reed, D-R.I., and Ed Markey, D-Mass., in introducing the bill.

“America’s tax code is riddled with loopholes that allow the ultra-wealthy to get away without paying their fair share, while working families have to play by a different set of rules and pay taxes out of each paycheck,” Wyden said. “You can only have a successful economy if you have a tax code that treats everyone fairly. My Billionaires Income Tax will make that a reality by ensuring those at the very top start paying their fair share, just like the rest of us.”

The Billionaires Income Tax Act would, for the first time, end one of the most prominent, legal ways that billionaires avoid paying taxes known as “buy, borrow, die.” Buy, borrow, die works as follows:

Buy: A billionaire uses their wealth to buy assets that appreciate in value (real estate, stocks, artwork, collectibles).

Borrow: The individual then borrows against that asset’s growing, untaxed value to fund their extravagant lifestyle, purchasing yachts, luxurious vacations, expensive art deals, and more. All the while, the assets continue to go up in value without paying a dime in tax.

Die: When the individual dies, their assets are passed to their children or other beneficiaries, often entirely tax-free, and the cycle continues.

The proposal would only apply to taxpayers with more than $1 billion in assets, or more than $100 million in income for three consecutive years. 

“Teachers and firefighters shouldn’t be paying higher tax rates than the ultra-wealthy.  It’s that simple,” said Senator Whitehouse. “Our legislation will level the playing field by closing tax loopholes to ensure the highest earners pay their fair share in taxes.”

“It’s common sense that billionaires should not pay lower tax rates than teachers, mechanics, and firefighters,” said Senator Stabenow. “The wealthy need to pay their fair share – plain and simple. And this legislation will help make it happen.”

“The wealthy hide their money in everything from stocks and real estate to yachts and expensive art – saddling the rest of us with the cost. This is a commonsense step to close one of the most exploited loopholes that the wealthy use to get out of paying their fair share,” said Senator Brown.

“For too long, billionaires have rigged the rules to cut their taxes to the bone, all while working families struggle to make ends meet. We should be investing in American families, not letting billionaires off the hook – and the Billionaires Income Tax takes an important step to make our tax system fairer,” said Senator Warren.

"Plain and simple, the system is rigged to benefit the ultra-rich and it’s time we level the playing field. I am proud to join my colleagues in introducing legislation to finally make sure that billionaires at the top pay their fair share and bring some fairness to our tax system,” said Senator Baldwin.

“For too long, our country’s tax code has rewarded wealthy individuals, enabling them to get away with paying lower tax rates than working families,” said Senator Hirono. “The Billionaires Income Tax Act would close loopholes in the tax code to ensure billionaires pay their fair share in taxes, while raising hundreds of billions of dollars to fund critical programs like Social Security and Medicare.”

“It is unacceptable that the wealthiest people in this country have all sorts of loopholes and cutouts in our tax code, while working Americans play by a different set of rules,” said Senator Smith. “We need to level the playing field so that folks at the very top are treated the same as everyone else. This legislation will help close loopholes and create a more fair and equitable tax code so that those at the top finally start paying their fair share.”

“Billionaires have rigged our tax system so that many contribute virtually nothing,” said Senator Merkley. “This is fundamentally unfair, undermining the legitimacy of the entire tax system. This has to end. And this bill is the way to end it.”

“While millions of Americans pay taxes directly from their paycheck each month, billionaires are able to shield their wealth from taxation and pay a lower tax rate on their earnings and wealth than the typical, hardworking family.  Our bill ends this disparity and ensures that billionaires pay their share of taxes just like everyone else.  This is about restoring fairness to our tax code,” said Senator Reed.

“Billionaires have gotten away for far too long with paying next to nothing in taxes – all while their bottom lines have continued to go up. This bill would make sure they finally pay their fair share, just like working Americans have been doing all along,” said Senator Schatz.

The Billionaires Income Tax is also endorsed by over 100 supporting organizations. A letter of endorsement with the full list of supporting organizations can be found here.

Today’s introduction closely follows a series of investigations by Wyden and his staff on the Senate Finance Committee to shed light on the various ways that ultra-wealthy Americans legally avoid paying their fair share in taxes. Earlier this month, Wyden also chaired a hearing during which members heard a firsthand account of how billionaires exploit loopholes in the tax code to avoid paying tax. 

A one-page summary of the Billionaires Income Tax can be found here.

A section-by-section summary of the Billionaires Income Tax can be found here.

Legislative text can be found here.

Twas The Night Before Moore - SEAT Members Discuss What They Expect In Moore Hearing

December 2, 2023 - Participants include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

John Richardson - @Expatriationlaw

SEAT members Dr. Karen Alpert, Dr. Laura Snyder and John Richardson discuss their predictions on how the Supreme Court will grapple with the difficult decisions in Moore. The SEAT/AARO amicus brief is here.

Prologue:

Twas the Night before Moore Poem

Twas the night before Moore, when all through the court
Not a justice was stirring, not even a clerk.
The issues were hung in the briefs with care,
In hopes that the justices soon would be there.

The tax profs were nestled all snug in their beds,
While visions of fake-income danced in their heads.
And Kathleen in ‘kerchief, and Charles in cap,
Had just settled their brains for a retroactive tax.