Repeal the overseas exemption of $80,000

Business Money
1

The following is very important for all AMERICANS who live and work overseas. You are about to lose your USD80,000 tax exemption on your income earned here in Taiwan unless you act now.

The latest news

“The bill would repeal the law that let American workers overseas exempt $80,000 of their income from taxation. An effort to delete this provision was rejected, 51 to 49, but senators said there was an understanding it would be knocked out of the bill in the conference committee.”

If you need any of the documents mentioned in the AM Cham message below please send me a PM and I will forward to you.

[quote]Dear AmCham Member,

As you may have already heard, the U.S. Senate
Finance Committee recently approved a tax bill
that includes a provision eliminating the US$80,000
exclusion on foreign earned income and housing
expenses. If this bill becomes law, it may result in a
significant increase in your personal tax liability.

It is urgent that you make your objection to this action
heard now, as the full Senate is expected to begin
discussing the bill within the next 48 hours. I therefore
encourage you to write to your Senators and Congress-
persons immediately on this important issue. (Congress
should be included because, should the full Senate
approve the bill as written, it will be considered by a
joint House/Senate committee.)

To facilitate your actions, please find the following
attachments:

  1. A basic letter addressed to both a Senator and a
    House member explaining the reasons the overseas
    exclusion should not be repealed. Please feel free to
    modify (and shorten as appropriate) this letter.

  2. An Excel file with the fax numbers for all the
    Senators and Members of Congress.

  3. A one-page memo from the U.S. Chamber with
    Section 911 “talking points” for your information.

  4. A shorter “target list” of key Senators and
    Congresspersons because they are important
    and should know better than vote for this bill.

Please note that AmCham Taipei is working closely
with APCAC (the Asia-Pacific Council of American
Chambers) on this issue and also with the U.S.
Chamber of Commerce in Washington.

Your fax (not letter–it will not be in time) or email
IS important!!

Please take a few minutes, download the information
you need, and send off communications ASAP.
We are talking about a real tax problem that could
have financial impact on you and your family.

If you have any questions, please contact me by
email. Thanks. [/quote]

2

This just applies to Americans, right?

3

Correct. This only affects American’s. My apologies for leaving that out. I will go back and edit.

Chou

4

That’s quite a coincidence as I just started making much less money :sunglasses:

5

Durin’s Bane, not related to SARS, is it??? Your school still open?

6

No ma’am, it is not SARS related. Schools’ open and doing fine. The amount of money I make is dependent on how honest I want to be.

7

So should we send the emails and faxes directly to the senetors or also to AmCham?

8

Sent this letter to my Congressman:

I’m very angry about the tax cut bill that was passed this week in the Senate. Here’s why: For me, it’s not a tax cut, but a tax rise. Currently, US citizens living overseas do not pay taxes on their first US$80,000 of income. But with the recent changes, we will be required to pay taxes on that portion of our income. In addition, we must pay taxes to our local government (in my case, this is Hong Kong). While I may be able to take a deduction against taxes paid to the Hong Kong government, the end result is I end paying more because US tax rates are higher (amongst the highest in the world).

In addition to my paying taxes, I and many of my fellow Americans working overseas may now end up losing our jobs. This is because many US multinationals use tax equalisation policies, footing the bill for excess taxes that their employees incurred by living and working overseas. Cutting the exemption would drive up the costs of doing business for corporations. They are now more likely to hire locals than they are US citizens!

I find it ironic that these tax cuts – which have been described as a job creation bill – will mean less jobs for overseas workers.

9

To the senators, cogressmen not to Amcham.

Chou

10

That’s what I thought. Thanks

11

If this new law passes would the following be true? An American living abroad in a foreign country that makes only US$36,000 per year, and never sets foot on USA soil all fiscal tax year would still have to pay say 30% of his foreign salary in taxes to the USA government?

That means that every American abroad, no matter how much money they make will have to pay US taxes, regardless if they are not residents of the US any more. So all Americans in Taiwan would now have to pay taxes no matter how much they make. Unlike before when only those that made over $80,000 per year had to pay taxes on the amount above US$80,000?

12

I saw an article on this in USA Today a few weeks ago.

Motherfuckers.

A big part of the reason I live overseas is because I was taxed at an effective rate of 52% back home. Add to that the cost of medical insurance, and you’ve got like, nothing left over.

I’ve written all kinds of letters, to congressmen, to Bush, to Cheney. The American dream, thanks to our fat-cat Congressional reps, has become a goddamned nightmare.

You grow up thinking that honesty is the best policy, until you get ass-raped one too many times by your own government.

Every friend I have back home is neck-deep in debt thanks to this economy and congressional tax policies. It’s just about time for another revolution. These guys have no fucking idea what it’s like to be an Average American.

Yeah, I’m pissed off.

13

the more things change the more they remain the same.

folks, we are seeing politicians in their true glory as they practice the number one rule of american politics: pick on those least likely to put up a fight. how many overseas americans vote in elections? ironically, the first proponent of this cut is a Republican! who claimed that this $80,000 tax exemption favored the rich corporate executive working overseas and that the American taxpayer should not subsidize such corporate luxury? Hmmm, so when did a Republican all of a sudden begin preaching about social justice? Obviously, this person should come to Taiwan and see many Americans trying to make a living by teaching english at NT$550 an hour. More ironically, it was a Democrat who proposed a bill in the senate to keep the $80,000 exemption. Is any of this making any sense. If this exemption really favors the rich overseas executive, then why is a Democrat coming to his rescue.

If the exemption is cut (which I think it will), Americans working abroad will have to pay their local tax to the local government (Taiwan here) and might be able to claim such payment of local tax as a tax credit against their US tax liability (assuming that even this tax credit is not cut…).

Somebody has got to pay for all those cruise missiles the USA fired into Iraq… and it certainly will not be those USA oil and construction companies dividing up the spoils of the Iraqi war, they will be laughing all the way to the bank along with their politicians with your tax money.

Welcome to democracy. :smiley:

14

hey, whilst all you lads are writing to your congressmen, how about you include something along the lines of…

"by the way…
Impeach Bush!!!
"

maybe ‘we’ can do something about getting rid of that little sod Blair, and the world will be two giant steps closer to sanity… :sunglasses:

15

I’d have to agree Tomas, they don’t know what it’s like and it pisses me off as well. I have written sevearl letters myself and am just finishing more up now. I cannot believe they would even consider this, or I guess I shouldn’t be surprised.

16

By the way, did you guys know that the Unisted States of America is the only nation in the world that taxes it citizens even if they do not live there and have residency somewhere else. The only country now they want to make it even tougher, you would think they would make it easier.

17

Not a huge condolence, I’m sure, but Canada taxes its citizens on overseas income as well (if you have “ties” such as bank accounts, safety deposit boxes, houses, cars and the like, anyhow…).

I guess they don’t think that our 6% tax over here is adequate to fund THEIR road construction and other et ceteras…

18

What makes me even more angry is that taxes for everybody else are being cut (which I have not enjoyed because I am not rich) and now my are being raised to pay for it!!!

19

Did you know that if you do not earn US dollars in the US you cannot add money to your IRA? I found this found this our sevearl years ago when the IRS contacted me said if I don’t pull it out I’ll not only be taxed on it, but there would haev been some legal issues as well. In the letters I wrote today to the US gov’t I also talked about this. Not only may I lose my tax free benefits but the fact is I cannot even put money towards an IRA as it is. I even wrote another letter to the speaker of the house. If nothing else it annoys them to get lots of faxes, I suggest all of us do the same to bury them in paper for a few days while more people write to them.

20

I am still waiting for someone who knows the answer to respond to Hobart. I find it unbelievable that there will be no exemption for living overseas. What is the truth here? The 80 is gone to be replaced with nothing? That sounds specious to me.