Americans living overseas face being taxed twice. Donald Trump wants to change that.
Donald Trump has proposed a raft of tax changes ahead of November’s presidential election.
Americans living abroad shouldn’t be taxed twice on the same income by two different countries, Donald Trump said.
“I support ending the double taxation of overseas Americans,” the former president told The Wall Street Journal in a statement.
The Republican presidential candidate appeared to endorse residence-based taxation over citizenship-based taxation. The US lays claim to its citizens’ global income even if they live and work in another country, whereas most developed countries tax income depending on where it’s earned.
The unusual policy dates back to the 1860s, when lawmakers introduced it to fund the Civil War.
Trump has dangled a variety of tax changes to drum up votes as he vies to secure a second term in office by winning the November 5 election. He’s suggested eliminating taxes on tips, overtime pay, and Social Security benefits. He already plans to extend his 2017 tax cuts, many of which are set to expire in 2025.
US tax policy is an annoyance for many Americans living overseas, who can wind up owing US taxes in addition to those they pay in their country of residence.
It’s worth noting people don’t owe anything to the IRS on the first $126,500 they earn abroad, and can receive tax credits for some payments they make overseas. They also have the option of renouncing their citizenship.
A shift to taxing Americans based on where they live could spur some wealthy citizens to move to low-tax countries — similar to British and other European expats relocating to places like Dubai or Monaco.
Tax policy has become a key talking point in the presidential race, with Vice President Kamala Harris, Trump’s Democratic rival, promising tax credits for new parents and first-time home buyers.
There were about 4.4 million US citizens living overseas in 2022, and about 2.8 million of those were eligible to vote, according to the latest figures from the Federal Voting Assistance Program.
“Fellow Americans living abroad, your vote is more important than ever,” Trump told the Journal.
