SEAT – The Acronym For “Stop Extraterritorial American Taxation”
What is pure residence-based taxation and why should be the only goal that matters?
What the United States calls “citizenship-based taxation” is actually:
The United States imposing worldwide taxation on individuals, on the non-US source income of individuals who do not live in the United States and are tax residents of other countries.
In other words, if you are a US citizen you are subject to the full force of the Internal Revenue Code (tax and reporting) even when you live outside the United States. This is unfair to the affected individuals and to the countries where those affected individuals reside. Through citizenship-based taxation the United States has created a “fiscal prison” which makes it very difficult for US citizens to live productive and financially viable lives outside the United States.
SEAT was formed to provide education and advocacy in support of replacing US citizenship-based taxation with pure residence-based taxation. Pure residence-based taxation is the standard that used in almost every other country in the world.
SEAT is committed to the principle that the goal should be pure residence-based taxation. To put it simply, citizenship should not be a sufficient condition for being a tax resident of the United States.
Cira December 2018 – Congressman Holding (A Republican)
My response in 2018 …
The End of The Beginning: @RepHolding introduces "Fair Taxation For #Americansabroad" – What does this mean 4 #expats in an #FBAR + #FATCA world? Join Jim Gosart @jgoshksk Olivier Wagner @1040Abroad Solomon Yue @SolomonYue John Richardson @ExpatriationLaw https://t.co/r71Xrf3B6J
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) December 21, 2018
In 2018 Congressman Holding (a Republican) introduced the “Tax Fairness For Americans Abroad Act“. Although a step forward, the Holding bill did NOT propose pure residence-based taxation. Rather the Holding bill (1) retained US citizenship-based taxation and (2) proposed expanding the forms and amounts of non-US income that would be excluded from US income for tax purposes. This was done by expanding the 911 Foreign Earned Income Exclusion. In other words, the Holding bill proposed retaining US citizenship-based taxation while providing an enhanced “carve out” for non-US source income. In other words, a practical help but not an end to the problems. The Holding bill did NOT receive sufficient support and was not reintroduced.
My 2018 thoughts are reflected in this post.
November 2021 – Congressman Beyer (A Democrat)
My thoughts in 2021
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 21, 2021
My current thoughts and analysis of the bill are reflected in this post.
The Holding Bill and the proposed Beyer bill are actually the same
In both cases the proposed legislation is NOT to end citizenship-based taxation, but rather to simply expand the FEIE (“Foreign Earned Income Exclusion“). Legislation that fails to end US citizenship-based taxation is not a long term solution and is therefore not acceptable. The US must stop defining as US tax residents individuals who do not live in the United States.
To date the response of both Republicans and Democrats has been to retain citizenship taxation and enhance the FEIE.
The response of ALL Americans abroad should be to withdraw support from ANY political party that does not publicly support and advocate for pure-residence based taxation!
Pure residence-based taxation is the ONLY solution that solves the problem for ALL people ALL the time!