Former President Donald Trump has spoken out in support of lowering taxes on American citizens living outside the United States, adding to his growing list of proposed tax cuts. Under the existing system, US citizens living abroad are subject to tax burdens from both the American government and their country of residence—a system of “double taxation” employed by no other major country in the world.
“I support ENDING the Double Taxation of overseas Americans!” Trump said in a statement first reviewed by the Wall Street Journal. “Let’s put America First, together. Register to Vote, and vote Republican.”
The former president did not provide additional details about how he would enact this policy, but it would most likely require congressional approval.
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The unusual American tax system for citizens residing outside the country was enacted in the 1860s when the federal income tax was implemented to fund the Civil War. Since that time, foreign-dwelling citizens are still required to file tax returns with the Internal Revenue Service in addition to any taxes put in place by their country of residence, unless a tax treaty exists.
According to the Internal Revenue Service, “for tax year 2023, the maximum foreign earned income exclusion is the lesser of the foreign income earned or $120,000 per qualifying person. For tax year 2024, the maximum exclusion is $126,500 per person.” Taxes paid to another government can also be deducted from the US tax bill.
In response to the proposal, critics have suggested that this policy could encourage the wealthiest Americans to relocate to foreign tax havens. However, the policy has been welcomed by organizations like Republicans Overseas, who have long advocated for tax relief for expatriates. Data from the Federal Voting Assistance Program indicates that about 4.4 million US citizens were living abroad as of 2022, with 2.8 million of them eligible to vote in their former states.
Trump’s proposal is part of a broader strategy to appeal to specific groups of potential voters by promising them uniquely tailored tax cuts. Other proposals include ending taxes on overtime pay, Social Security benefits, and income made through tips.
Vice President Kamala Harris is also campaigning on reduced taxes, promising to pass a tax cut for the middle class and adopting a no-tax-on-tips policy soon after Trump announced his proposal.
Connor Walcott is the lead writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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