A group of American citizens living outside the United States have launched a new global "Tax Fairness for Americans" campaign, with the aim of ending the US' discriminatory tax system for those living abroad.
As the United States tax system is based on citizenship rather than residency, so-called "accidental Americans" must still pay taxes in the US. These are people who acquired American nationality because they were born in the United States, but have no other ties to the country. The system also affects all other Americans living abroad.
"Our mission is to free Americans abroad from discrimination by fighting for Residence-Based Taxation, which is the law of the land in nearly every other country in the world," said Brandon Mitchener, Executive Director of the non-profit organisation.
"American citizens should not have to renounce their US citizenship to avoid discrimination, double-taxation and everyday hassles just for being an American who chooses to live abroad," he added.
Lobbying for change
The "Tax Fairness for Americans Abroad" initiative represents the estimated 9 million Americans living outside the country, for years or permanently. They represent ordinary Americans who moved away, as well as "accidental" ones who were born in the US but only lived there as young children or were born to American parents abroad.
The initiative was inspired by Fabien Lehagre, who was born in California and lived there as an infant. He is now the President of the Association of Accidental Americans (AAA), which represents US citizens born abroad or born to non-US parents in the United States.
"Being American should be a source of pride," he said. "Unfortunately, US legislation and regulations have made being American a financial nightmare for millions of 'accidental Americans' living in other countries."
The US flag and the Belgian flag. Credit: Belga/Eric Lalmand
The organisation intends to collect and share stories of expat Americans' experience with citizenship-based taxation (CBT) and lobby for changes in US law and regulations. More than 1,300 individual Americans abroad have already donated to the cause with donations averaging $65.
"We will call on Congress and the US Treasury to ensure Americans abroad are treated fairly and not treated as second-class citizens simply because they choose to live abroad," Mitchener said. "Contrary to popular belief in the United States, the vast majority of the estimated 9 million Americans who live abroad are ordinary Americans – no richer or poorer on average than their counterparts in the US."
Americans move abroad to study, to work, for love, for retirement or lots of other normal reasons, for years or permanently, the press release said. "Many were born abroad or grew up outside the United States and do not even speak English."
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The tax and financial discrimination against Americans abroad results from the 18th Century policy of Citizenship-Based Taxation (CBT). This sees Americans being taxed on their worldwide income – even if they already declare income in the country where they live.
This CBT system can be highly complex for Americans living abroad, as it requires them to navigate both the US tax code and the tax laws of the country where they live. "That often means expensive professional tax advice and high compliance costs, usually for little or no US tax liability at the end of the year."
