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Donald Trump has said he will end “double taxation” for millions of Americans living overseas if he wins the US presidential election next month.
“I support ENDING the Double Taxation of overseas Americans! Let’s put America First, together. Register to Vote, and vote Republican to, MAKE AMERICA GREAT AGAIN!” he said in a statement.
The announcement, part of the former president’s broader pledge to slash taxes, is an effort to court overseas Americans in the razor-close race for the White House.
Jim Gosart, the vice-president of Republicans Overseas, a body that advocates for the party, said Americans should only pay income tax in the countries where they live, work and earn.
“Ending the double taxation of overseas Americans, a move that will be life-changing for millions, is a testament to president Trump’s commitment to economic freedom,” he said.
The Department of State estimates there are up to 9mn Americans living or serving overseas. But this does not exempt them from filing US tax returns.
Garrett Watson, senior policy analyst at think-tank the Tax Foundation, said: “The US taxes citizens without regard to where they live worldwide, which is distinct from most other countries who use residency-based taxation.”
Watson said that while most Americans living overseas pay no US tax, filing returns can be a complicated process and for those who live in a jurisdiction that has no tax treaty with the US, it may mean paying tax twice.
Brussels-based Brandon Mitchener, executive director of Tax Fairness for Americans Abroad, an advocacy group, said: “We welcome any political support for bringing the United States into line with the global standard of residence-based taxation.”
Mitchener said there is bipartisan support to change the tax law, which dates back to the civil war, and was designed to prevent citizens fleeing to avoid paying for the war effort.
Mitchener said his organisation had received “no response” from the campaign of Democratic candidate Kamala Harris on whether it supported a change in the regulations.
“What has been lacking is political will,” he said. “It’s great news that presidential candidates and their staffs are finally talking about the issue, which makes life miserable for millions of Americans abroad.”
But London-based Rebecca Lammers, chair of the Democrats Abroad Taxation Task Force, said while their members also want double taxation scrapped, “it seems they [Republicans] are pandering for overseas votes at the eleventh hour”.
Lammers said Trump recently posted that Democrats were using the overseas vote to “cheat”, which he described as “foreign interference”.
“This week, Republicans Overseas supporters are offering a promise they didn’t keep when Trump was in power in 2017,” she added.
Overseas votes could make all the difference for Trump and Harris, who are running neck and neck in the swing states that will decide the election.
A report on the 2020 presidential vote by the US Election Assistance Commission showed that roughly 1.2mn ballots were sent to eligible overseas voters, and more than 900,000 were returned and submitted for counting.
Ottawa-based Georganne Burke, Canadian representative of Republicans Overseas, said details about the tax change would emerge after Trump was elected.
“They are not micro-detailed policy statements,” she said. “Look at what Trump is trying to do: lower taxes, less government, less interference, more business.”
Jonathan Garbutt, a tax lawyer at Dominion Tax Law in Toronto who works with US expats in Canada, said Trump’s pledge would be a “significant” change. If he follows through on his promise, it “would solve a lot of issues for US expats” and it would end “useless paperwork”, he said.
Burke admitted that achieving the tax goal would be “complicated.”
“He [Trump] knows he has to work with Congress as it will be amending the Tax Code but he wants to get this done,” she said.
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