The Double (Tax) Life Of Americans Abroad
Like hundreds of millions of other Americans, I am currently sweating over my tax returns. Like many other people on expat packages, our deal includes some accountant services. The reason this is often an included perk is that overseas tax filings can be extremely complicated, as you must pay local taxes where you live in addition to U.S. income tax.
If you make less than $85,700 and live abroad, you have to file the usual return but the tax rate is undeniably generous: nothing. Once you're over that threshold, however, the process begins to get very convoluted. While the first $85,700 are tax free, you have the added burden of paying taxes on any benefit received, including housing allowances, moving expenses and kids' schooling.
Sorting all this out can be confusing, but there is one simple, singular truth: The United States of America is the only large Western nation that demands that its residents living full-time overseas pay federal taxes on income earned abroad. Expats who aren't on a corporate package can feel an extreme pinch from this -- especially on the heels of 2006 changes in the tax law, which capped the housing deduction at artificially low rates, among other things.
The impact of the changes wasn't as direct on the many expats on full corporate packages, which often includes tax equalization. This essentially means that the employer will calculate what tax you would have paid had you stayed in the U.S., deduct that and then pay all of the foreign tax you face plus any U.S. tax you owe over and above what you would have paid had you never gone on assignment. But higher corporate costs are passed down the line, often in terms of hiring fewer Americans or shortening their stay abroad. Further, an increasing number of expats don't have such benefits, as many companies scale back packages and more people move overseas on their own.
The double taxation can be particularly vexing for long-term expats, who must pay U.S. taxes year after year without receiving much in the way of benefits. Jim Spear, an American who has lived in China for 22 years, readily admits to feeling some resentment this time of the year, as he dutifully files his tax return.
'I am proud to be a citizen of the United States and paying taxes is a civic obligation,' says Mr. Spear. 'People who don't pay taxes are scofflaws and when there are too many of them, society has a lot of problems, which is something I've seen often in China.'
Still, Mr. Spear thinks the U.S. would promote foreign trade and exports and that the domestic economy would benefit from not requiring citizens to pay tax on income earned outside the U.S. 'That's the rationale other countries use,' he notes.
The current tax policy actively discourages companies from hiring Americans to fill overseas positions, some believe.
'Hiring and employing Americans is much more complex than any other nationalities because the U.S. is unique amongst developed countries in wanting to tax its citizens regardless of residence,' says Geoffrey Latta, executive vice president ORC Worldwide, a management-consulting firm specializing in compensation. 'If you have two candidates for a job [overseas] who are on all other grounds equal and one is American and one is British, the Brit is going to be cheaper because you don't have all that tax cost. Most companies don't want to admit it, but that's what is happening.'
Landis Hicks, who recently finished a term as Chairman of the Asia-Pacific Council of American Chambers of Commerce, says that while the revised law is too recent for hard data to have been accumulated about its impact, there is strong anecdotal evidence that fewer Americans are being retained for international postings.
'The extra cost for compensating employees will simply make Americans less competitive with other nationals, so the number of Americans who are working abroad will decrease in relative number and that has a ripple effect. People tend to use what they know, so procurement, engineering and design will be based on home-country products that are not American,' says Mr. Hicks, an American resident of Singapore. 'Many of us also strongly believe that having Americans working outside the United States is extremely useful in promoting American values and assisting in good relations with other countries, so more than just trade or economics is involved.'
The issues have been exacerbated by changes inserted at the last minute into the 'Tax Increase Prevention And Reconciliation Act of 2005,' which was passed in May, 2006. Section 515 capped the housing allowance that can be deducted, with anything over the prescribed amount being counted as taxable income. There was initially a hard cap of $24,720 a year, but the law included a provision allowing the Treasury Department to make alterations for high-rent locales, which it has done. The caps were initially raised to $49,137 annually in Beijing and $114,000 in Hong Kong, which illustrates how low the initial number was.
A stacking provision was also added, so that if the benefits move you from below to above the excluded income you are taxed at the higher rate. For instance, someone earning $80,000 would not have to pay income tax. If, however, they had $20,000 in housing expenses above the allowed deduction, they would enter at the rate for $100,000 in income.
The changes were largely considered the work of Iowa Republican Charles Grassley, who at the time was chairman of the Senate Finance Committee. However, in an Oct. 3, 2007, letter to The Wall Street Journal, Sen. Grassley wrote, 'The 2006 changes came at the recommendation of the nonpartisan Joint Committee on Taxation after it became clear that U.S. taxpayers living abroad were receiving an overly generous U.S. tax subsidy relative to those living and working in the U.S. ... These changes were a matter of fairness. An American in Peoria can't exclude any salary or housing costs from taxable income. Why should an American in Paris not face reasonable limits?'
The Americans Abroad Caucus believes that the main difference between Sen. Grassley's theoretical Americans is representation; the American in Peoria knows who to lobby for change while the American in Paris does not. The group is trying to change that. Founded in 2007 by co-chairs Carolyn B. Maloney (D., N.Y.) and Joe Wilson (R., S.C.), the caucus now counts 10 Democrats and five Republicans as members. 'This is a significant step forward toward effective representation for overseas Americans on Capitol Hill,' says Andy Coyne, executive vice president of the Association of Americans Resident Overseas. 'Without it, we have virtually no voice in Washington.'
The number of Americans living overseas is unknown, but estimates range from 4 to 7 million. Our representation on Capitol Hill is diluted by the simple fact that we vote in our last place of residence in the U.S., so no one senator or representative is obliged to be responsive to unique expat issues. 'Though we are millions strong, we can be overlooked or disregarded in a way that could never happen to a state of 7 million citizens,' says Mr. Coyne.
Next week, Mr. Coyne will be in Washington for Overseas Americans Week, a lobbying trip by AARO and its sister organizations American Citizens Abroad and the Federation of American Women's Clubs Overseas. They will be focused on promoting legislation to make it easier for overseas Americans to participate in U.S. elections and to 'level the taxation playing field with workers from other nations.'
They will encourage Congress to pass Sen. Jim DeMint's (R., S.C.) Working American Competitiveness Act, which would do away with the limit on the foreign earned income exclusion. Mr. Coyne believes that the change is necessary to allow American companies doing business abroad to maintain their competitive edge in the global economy. 'American citizens working abroad are competing against people from other nations who are only subject to taxation in the country in which they work and not back home,' he says.
In the meantime, we'll all keep puzzling over our tax returns, and I for one will celebrate the fact that expats still have one other welcome perk, regardless of our corporate package: an automatic extension to June 15.
跟其他千千万万的美国人一样，我现在也在忙活自己的纳税申报。跟许多外派人员一样，我们也可以享受一些会计服务。之所以有此类福利，是因为在海外报税极其复杂，除了要缴纳当地的个人所得税外，还要缴纳美国的所得税。
如果你在海外生活，年收入低于85,700美元，虽然也要照常填写税单，但税率之低是无庸置疑的，因为什么都不用交。不过，一旦超过了这个限额，报税的过程就开始变得极其麻烦。虽然前面的85,700美元是免税收入，但你还有额外的负担，要为所有福利津贴交税，例如住房津贴、搬家费、子女的学费补贴等。
要把这一切算清楚可能会麻烦透顶，但有一个简单的事实：美利坚合众国是唯一一个要求在海外生活的国民为海外收入交纳联邦税赋的发达国家。这项制度让那些没有享受公司优待政策的海外侨民更加捉襟见肘，尤其是在2006年税法修订之后。税法的修订将房屋扣减限定在极低的额度，还有其他一些变化。
这些变化对许多享受公司优待政策的外派人员而言没有太直接的影响，因为优待项目中通常包括税务平衡。其实就是雇主会将外派后在海外缴纳的税费和因为外派而在美国缴纳的额外税费补偿给你。但公司已经在缩减高昂的成本，通常是减少雇用的美国人，或是缩短他们派驻海外的时间。此外，越来越多的海外侨民享受不到这些福利，因为许多公司减少了优待政策，还有更多的人出于个人原因到国外生活。
对于长期旅居国外的人来说，双重课税尤其让人恼火，他们必须年复一年地向美国纳税，但却享受不到什么好处。已在中国生活了22年的美国人吉姆•斯皮尔(Jim Spear)爽快地承认自己每年这个时候老老实实地填报税表时，就会觉得愤懑不已。
广告斯皮尔说：“我为自己是美国公民而自豪，交税是公民的义务。不交税就是违法，如果不交税的人太多，社会就会出现很多问题，我在中国就常常碰到这种情况。”
不过，斯皮尔认为美国应当促进外贸和出口，给予海外收入免税的优待对美国国国内经济有利。他强调说：“那是其他国家所采用的基本原则。”
一些人认为，现行税收政策极大地阻碍了美国人在海外求职。
薪酬咨询公司ORC Worldwide的执行副总裁杰弗里•拉塔(Geoffrey Latta)说：“雇用美国人比用其他国家的人复杂得多，因为美国在发达国家中独树一帜，无论其公民身处何地，都要对之课税。如果一个海外职位有两个其他条件完全一样的候选人，而一个是美国人，另一个来自英国，雇用英国人的成本会低些，因为没有那么多税费。大多数公司都不愿承认这一点，但事实就是这样。”
不久前卸任美国商会亚太理事会(Asia-Pacific Council of American Chambers of Commerce)主席的兰蒂斯•希克斯(Landis Hicks)说，虽然税法修订时间太短，仍无法收集到能说明其影响的硬性数据，但坊间已经有许多证据，有力地显示出在海外任职的美国人减少了。
居住在新加坡的美国人希克斯说：“在跟其他国家的人竞争时，为员工提供补偿的额外成本肯定会降低美国人的竞争力，因此在海外工作的美国人人数会相对下降，并会引发连锁反应。大家喜欢使用自己所熟知的产品，因此采购、工程技术和设计都会用本国的，而这时候美国就只能靠边站了。我们许多人还坚信，让美国人去国外工作能极大地宣传美国的价值观，并促进与其他国家的友好关系，因此这不光牵涉到贸易或经济。”
2006年5月通过的《2005年增税预防和调整法案》(Tax Increase Prevention and Reconciliation Act of 2005)在最后关头的变化更加剧了上述问题。该法案第515条规定了可减免的房屋补贴限额，超出指定额度的部分都将作为应税收入。最初的限额仅为每年24,720美元，但该法案还有一条规定，允许财政部变更房租过高的地点的限额，财政部也这样做了。最初，北京的限额提高到了每年49,137美元，香港提到了114,000美元，这样的数字充分说明了原先的限额有多低。
还有一个累加条款，这样，如果加上福利以后，你的收入超出了免税所得的门槛，就得按高一级的税率纳税。比如说，年收入8万美元的人无需缴纳所得税，但如果他们在免税收入之外又获得了2万美元的住房补贴，就必须按年收入10万美元的标准纳税。
许多人认为这些改动是时任美国参议院财政委员会(Senate Finance Committee)主席的艾奥瓦州共和党人查尔斯•格拉斯利(Charles Grassley)的“杰作”。然而，格拉斯利在2007年10月3日致信《华尔街日报》称：“2006年对税法进行的修订是出自无党派的美国国会税务联合委员会(Joint Committee on Taxation)的建议，因为海外的美国纳税人获得的美国税收津贴明显远高于在美国国内生活及工作的人......修订税法是为了公平起见。既然皮奥里亚的美国人不能从应税收入中刨除任何薪金或住房成本，那巴黎的美国人凭什么能回避合理的限制呢？”
美国海外侨民事务议员团(Americans Abroad Caucus)认为，格拉斯利说到的两类人，区别在于后者有没有自己代言人；皮奥里亚的美国人知道游说的对象是谁，而巴黎的美国人就不具备这个条件。该团体正致力于改变这种情况。这个议员团由纽约民主党人卡罗琳•B.马隆尼(Carolyn B. Maloney)和南卡罗莱纳州共和党人乔•威尔森(Joe Wilson)共同创立于2007年，现在已有10名民主党和5名共和党成员。美国侨民联合会(Association of Americans Resident Overseas)的执行副主席安迪•科因(Andy Coyne)说：“这是一个意义重大的举措，让海外侨民找到在国会的代言人又迈进了一步。如果没有自己的代言人，我们就无法在华盛顿表达自己的意见。”
虽然不清楚美国海外侨民的确切数目，但据预计在400万至700万之间。由于我们只能按自己在美国的最后住址投票，这个简单的事实令我们无法在国会争取到自己的代言人，因为没有任何一位议员有义务为侨务说话。科因说：“虽然我们有数百万之众，但却受到忽视，而一个有700万选民的州绝不会受到这等待遇。”
下周，科因将赴华盛顿参加AARO及其姐妹团体American Citizens Abroad和Federation of American Women's Clubs Overseas组织的游说活动“海外美国人周”。他们的重点会是推进立法，为海外侨民参加选举提供方便，以及修订税法，让美国劳动者在同等条件下与其他国家劳动者竞争。
他们会敦促国会通过南卡罗来纳州共和党参议员吉姆•德铭特(Jim DeMint)提出的《美国劳动者竞争力法案》(Working American Competitiveness Act)，该法案主张取消对海外收入纳税减免的限制。科因认为，要让美国公司在海外开展业务、保持自己在全球经济中的竞争优势，上述调整是有必要的。他说：“在海外工作的美国公民要跟其他国家的人竞争，后者只需要在所工作的国家纳税，不用向本国纳税。”
与此同时，我们都在对着自己的纳税申报表抓耳挠腮，不过值得庆幸的是，不管薪酬如何，海外侨民还享受另一项福利，即纳税申报时间自动延后至6月15日。