US to tax overseas workers

The US Senate has passed a US$350 billion tax cut.

But the package eliminates $80,000 income tax exclusion for Americans who work abroad.

That means we now have to pay taxes on our overseas income.

We still get to deduct the value of our local taxes paid, but because US taxes are high we end up paying more in the long run.

This is bad news for every US worker overseas.

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.

Good idea to get a form letter to send to our representatives; I’ll do it if I can find a good one.
However, US taxes are not anywhere close to the highest in the world, so I would leave that sentence out, as it will probably nullify the rest of the argument.

Let’s hope it doesn’t pass. This is all due to wonderful Dubbya’s tax cut; it’s easy to cut taxes if you start taxing more people (us…).

[quote=“littleiron”]
Let’s hope it doesn’t pass. This is all due to wonderful Dubbya’s tax cut; it’s easy to cut taxes if you start taxing more people (us…).[/quote]

it has already passed inn the senate and I quote from NY times (not a jayson Blair article :wink: )

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.

lets hope so. Write your letters to ensure it gets knocked down harder then Jiang and his lost the mandate of heaven crap.

Chou