DeMint Bill Would End Double Tax on Americans Working Abroad
Today, U.S. Senator Jim DeMint (R-S.C.) introduced S.3496, the Working American Competitiveness Act, legislation that would eliminate the cap on income Americans working abroad can earn without being double taxed.
"America is the only industrialized nation in the world that forces its citizens to pay double taxes while they compete in the global marketplace," said Senator DeMint. "If we want to create the best jobs in the world, we've got to become the best place in the world to do business. We're not going to encourage global companies to locate in the United States if we continue to double tax their employees who work overseas."
Section 911 of the U.S. tax code only allows Americans working abroad to protect $82,400 of their foreign earnings from U.S. taxes, but every other developed nation allows their workers to protect all of their foreign income. Our competitors understand that they are already taxed by the nations where their citizens live and work, and that their companies would have a harder time competing in the global economy if their citizens were taxed by two countries. DeMint legislation would eliminate double-taxation on the foreign income of U.S. citizens. Other nations would continue to tax that income, just as the United States taxes the income of foreigners who live and work in America.
"This is a small change, but it will help put U.S.-based companies and their workers on a level playing field with the rest of the world," said Senator DeMint.
Daniel Mitchell, senior economist at The Heritage Foundation, commended Senator DeMint's proposal saying, "America's worldwide tax policy creates a perverse competitive disadvantage for American companies, a policy that reduces jobs and exports. Removing the cap on Section 911 and instead relying on the common-sense principle of territorial taxation would boost America's position in the global economy."