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Wednesday, February 3, 2016

An American Abroad Looks at the US Presidential Race

Do home country national elections matter to emigrants/expatriates who live outside their countries of citizenship?

Some countries allow their diasporas to vote in national and even local elections.  The French abroad, for example, can vote in French elections from their host countries, and Article 24 of the 1958 Constitution establishes the right of the French living outside of France to have direct representatives in the French Senate.

Having the franchise, however, does not guarantee that any national community abroad will exercise it.  Mexicans abroad have had the right to vote in Mexico since 2005 and there are millions of Mexican citizens all over the world.  But as of 2012 there were only 61,000 absentee ballots requested from over 100 countries.

So it's not enough to simply have the franchise in the home country, migrants/expatriates must also have the means to exercise that right and, I argue, a good reason to do so.  Motivation really matters here.  If there are no compelling issues that stir interest in a community abroad then they won't bother to register or send in their ballots.

With that in mind, let's look at the US presidential elections.  In the latter part of the 20th century Americans abroad gained the right to vote with the Overseas Citizens Voting Rights Act of 1975 and  The Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) passed in 1986.  Since that time the two major political parties in the US have worked to encourage voter participation in the US communities living outside the United States.

But as Dr. Claire Smith showed in her 2010 article for the Overseas Vote Foundation, only 374,955 civilians requested ballots from abroad for the 2008 elections and only 59.2% of those ballots were actually submitted.  Problems with the voting process?  Absolutely.  And yet the number of overseas citizens who tried to vote was not that high to begin with given that there are, according to the US State Department, around 7 million US citizens living abroad.

Why might that change in 2016?  I would argue that Americans abroad do have a keen interest in this election - a personal dog in this fight that might encourage Americans abroad to vote in higher number than in the past.

The issues are the Foreign Account Tax Compliance Act and citizenship-based taxation - a deadly combination that is wreaking havoc in American communities all over the world.  FATCA  was passed in 2010 and requires banks in the host countries to report the accounts of US citizens and US Persons to the US government which has led banks in the host countries to close the personal accounts (checking, savings and retirement) of many Americans abroad, and declare all Americans persona non grata at their banks.

Citizenship-based taxation, US law that says that the incomes of US citizens/US Persons earned outside the United States are taxable by the United States government, has been around for many years but was not enforced until very recently (about 2008).

Americans abroad are not only furiously angry and deeply bitter about what they see as the hostile acts of their home country government, but some feel they have no choice but to renounce their US citizenship. That is the reason that renunciations of US citizenship have soared in the past few years.

For many, if not most, Americans abroad these are THE issues that trump (no pun intended) everything else.  I call it the American Diaspora Tax War because I have never seen so much resentment and, strangely enough, solidarity on the part of Americans abroad.  This situation has united angry Americans from many different countries around the world against the anti-emigrant policies of the US government.

This is the prism through which I see the upcoming US presidential elections and I don't think I'm alone here.  The question, however, is whether or not  the candidates will speak to those issues.  To motivate Americans abroad to vote I think it is not enough for these issues to be mentioned as part of an overall party platform;  they need to be addressed by the candidates directly.

So far I am not seeing that.  Ted Cruz, Marco Rubio, Hillary Clinton and Bernie Sanders have a lot to say about domestic issues - gun control, the national debt, immigration - but after parsing the Issues sections of their websites, I don't see anything that speaks even indirectly to FATCA and citizenship-based taxation, their impact on Americans abroad,  and what they plan to do about them.

The Democrats do at least nod in our direction and acknowledge our existence. Clinton has a special link for Americans abroad who want to contribute to her campaign.  Sanders talks about tax reform (the super wealthy, corporations, and the use of tax havens) but seems oblivious to the existence of middle-class Americans living abroad who might need a little tax justice, too.  (And I found that to be a real pity because I kind of like Sanders.)

Am I missing something here?  You tell me.  I invite the advocates of these candidates to come forward and direct me to whatever information is available that clarifies their position on what is happening to Americans abroad right now.

Do I and other Americans abroad care about the issues and the upcoming elections?  I can't speak for anyone but myself but my answer is:  Of course I do.  I have family in the US and things like gun control, healthcare, US immigration and the national debt impact the people I love.

That said, the only issues that have a direct impact on me are:   foreign policy (because when that goes badly, Americans abroad are on the front lines)  and US government policies toward its diaspora - the 7 million or so Americans living outside the United States.

If I believe that my issues are being ignored, or that candidates might actually make things worse for me and my compatriots abroad, not only will I not vote for those candidates, I probably won't vote at all.

Because the right to vote means nothing if you feel that the candidates aren't listening and that you don't have a voice deemed worthy of being heard.


magpiemom said...

I agree that revision of FACTA is important. I am fortunate in that I have not (yet) been affected by it. I have no assets in the US or abroad (you can call that fortunate or not, depending on how you look at it), I am married to a citizen of the country that I reside in, and banking hasn't been an issue. However, I am sympathetic to those who are affected by it, and agree whole-heartedly that it needs to be addressed and changed.

That all being said, I am actively supporting my candidate of choice regardless of whether he has addressed FACTA. The problems at home affect so many more people, and if implemented (a long shot, I'm afraid, but worth hoping for), it will provide such a widespread benefit to my children and grandchildren. My thought is that if we can elect a good, honest, balanced candidate to office, then we can start to make noise about our issue. I think that once the facts are presented, he can see the need to assign resources to amend FACTA so that it will do what it is supposed to do (especially since the ones hiding money in tax havens are his target).

Obviously, it is no secret that my candidate of choice is Bernie Sanders. I think he is, overall, the best candidate, the best hope for a better America in the future. Others may disagree, but that is my opinion, and it is worth exactly what I charge for it (nothing). :)

Anonymous said...

Our issues have to do with living outside the United States as Americans (i.e. the extended arm of the US government) and they do not have to do with living inside the United States. The "homeland" issues about which we should be concerned are those in our respective countries of residence. Our "homeland fellow comrades" certainly do NOT care about us.

Unknown said...

@Michelle Pelkonen's comment does not sound genuine or perhaps without good grasp of implications of the US tax and compliance laws. Certainly if one has no assets in the US or abroad then there should be not issue with tax and compliance laws. Will this always be the case in regards to no assets and income? What if you inherit from your husband, then you are into it and then obliged to report accounts to the Financial Crimes Enforcement Network, as you probably should be doing already with any joint accounts. I suggest reading this summary:

No need to worry if one's kids and grandchildren live/shall live in the US, otherwise they must face the overlay of the 74,000 page US tax code on top of the tax code of one's country of residence. The US compliance requirement, cost, and potential penalties become unfathomable, and decidedly place them at a disadvantage in their non US country of residence compared to all other nonUS persons in those countries including all other citizens of other OECD countries. All while one might think that US citizenship should be about the greatest liberty in the world. Myth vs. reality.

As Bernie Sanders is very much about raising taxation in the US this will no doubt flow through tax treaty gaps to punish US persons living overseas, all for no services in exchange.

Unknown said...

"Am I missing something here?"

1) FATCA/FBAR Lawsuit backed by Republicans Abroad
2) Plank in Republican Party Platform: Repeal FATCA
3) Plank in Republican Party Platform: Repeal CBT
4) Rand Paul as plaintiff of FATCA/FBAR Lawsuit.

Where you definitely are not missing:

Inspite of 1-4 above no mention by Republican candidates on public websites etc of CBT issues. While Rubio, Cruz, Paul talked with expats on these issues then why not on public websites etc. I believe Rubio is public on end of US extraterritorial tax for companies and US persons - let's hear this
loud and clear. No Democratic candidates talking about Same Country Exception. While Democrats Abroad did a nice survey and address evils of FATCA, we have not heard from Clinton or Sanders on these issues, and no planks in the Democratic Party Platform about them.

Not missing: Only issue, trumps all others, party lines to be disregarded to support candidate(s) out to end CBT.

DL NELSON said...

As a renounced American I can no longer vote...but with all the problems in the US FATCA and CBT are minor in comparing the issues in the US. Would I get rid of FATCA if the entire water supply was like Flint's for example. What about Black Lives Matter? Union busting?

My daughter still lives there. If I could vote should I vote her issues or mine?

I look at the candidates and I see liars, idiots, fanatics. And then I think it isn't the president, it is the owners of the congressmen that count.

Pretty depressing.

Ellen said...

The matter of should I vote for the candidate I believe will be for the greater good of most Americans or for the candidate that is most likely to address my personal concerns is something I'm dealing with. I still feel I should vote.
The French do have the right to vote when they live abroad, but the have to go to the consulate they've been assigned to, which might not be the most convenient, and in many cases, involves traveling and expense. Someone in the midlands of the UK might find it easier to get to London on a Sunday election day, but is assigned to go to Birmingham. We Americans can vote from home, and send the ballot in.

Unknown said...

Virginia: could you clarify what 59.2 means in the fourth paragraph. is it a percentage?

Unknown said...

People who live in America do not and will not vote for Americans living abroad, since their local stateside issues are and will always be more important to them. As such, if Americans living abroad are ever granted the opportunity to impact change to their advantage, then they should not let that opportunity pass away, even when such means voting on issues which won't help people living in America.

Anonymous said...

Bernie Sanders wants to END the FEIE (Foreign Earned Income Exclusion)

Source: Outsider in the House, by Bernie Sanders, p. 207-8 , Jun 17, 1997

"Repeal housing and wage exemptions for US citizens working abroad: increased income--$7.2 billion."

Please spread the word to the clueless expats out there who haven't bothered to seek out this information.

I already pay a higher marginal tax rate in a socialist European country than anyone in my low bracket in the U.S. Sanders thinks I can pay taxes twice in both countries. Obama raised the price of renunciation from $0 to $2350 to prevent lower income expats such as myself from leaving the plantation. So, for those people who say 'just renounce', maybe you should offer to pay our renunciation fee.

People stateside don't want to know about the mountain of paperwork we have to fill out to run a small business abroad (gross revenue under $30,000 a year). The form 5471 says that it takes a certified accountant 80 hours to learn how to complete it... and another 40 hours to fill it out. To hire a pro typically costs $1500 in compliance even when you owe nothing. I already have to pay an accountant in this country and no foreign accountant understands U.S. tax law.

The 5471 is just one form out of a huge pile of paperwork expats face that would make your head spin. Don't believe me? Check out the instructions on the IRS website.

Not to mention that unemployment, pensions, etc. are not 'earned income' and are taxed from the first dollar.

As an expat you lose the right to invest in mutual funds in the U.S. or abroad (due to PFIC reporting) and thus building a retirement fund is virtually impossible.

I was turned down by two banks recently for a standard checking account because I'm have toxic American citizenship even though I've been living in this country for 20 years.

Sanders would be great for homelanders in the U.S. but a DISASTER for Expats. For the first time in my life, I will vote Republican. I don't even care who the candidate is at this point. I'm voting Republican because they have come out in support of RBT. There are 7+ million of us living abroad... and anecdotally, I can assure the DNC that we're pissed.

I was invited to a Democrats Abroad dinner this year and told the organizer that I could no longer support a party that treats it diaspora this way.

Want our votes? Ditch 'Citizen Based Taxation'... and adopt 'Residence Based Taxation'... which is the International Standard. Do you pay income taxes in two states if you change residence? No, you don't. We should pay taxes in our country of residence.

If the U.S. tax system were applied by all nations, Obama would have to pay taxes in Kenya. Yes, he's a U.S. citizen (I'm not a birther). But the U.S. system requires kids born to its expats to pay U.S. taxes. I only wish the shoe was on the other foot so he could understand what we're going through.

Don't need us? Tell that to Al Gore who lost Florida in 2000 by about 500 votes. The DNC learned its lesson and actively courted our votes for Obama (I voted for him twice and sent money to his campaign)... who stabbed us in the back with all this FATCA nonsense.

Obama didn't initiate this mess, but he certainly exacerbated it... and Sanders seems to think we're all Fat Cats who should pay for services we don't use. No, the Marines don't rescue expats (except in Hollywood fantasy)... Yes, we pay for consular services through fees...

Kind of pointless stating the facts since every comment section always gets the U.S. based blowhards who know nothing of the situation (who probably live in their mothers' basements) yet always claim we're 'dodging taxes', or spout some other America 'love it or leave' it tripe.

Fine... piss off 7+ million voters... I hope you'll get that Al Gore surprise that's coming to you.

Bitter... HELL yes!

larryc said...

Lots of anger and passion coming thru with the earlier comments.

For myself, not yet living outside the US of A, I can offer this: the candidates can tout their domestic platforms. How much effort outside the US has been invested to advertise to the leading candidates about FACTA? About what matters to those 7 million citizens outside the US? Do you take it for granted that the candidates "SHOULD" know about FACTA?

There's an old saying which remains true...we don't know about what we aren't aware of.

Victoria FERAUGE said...

@Michele: A very principled position and one I respect. As a Saunders supporter is there any way that you and others could get him to say something on the subject?

@Joe Citizen: That's exactly what I see; the Republicans have expressed their support for our efforts against FACTA and CBT but I have not seen the candidates talk about it. I'm waiting for it. Will I wait in vain?

@Donna, Yes, that another issue - the quality of the candidates. And I like your point about those other issues. I think about them too. As Michele said - what about my children and their children should they choose to live in the US?

@Ellen, My mother made an excellent point when I was Seattle last year. Watching the news, she said, she sees Americans who vote for a candidate because he/she has a program they like for America as a whole and then they discover after the election that their water is poisoned and they can't get healthcare. Nothing wrong with figuring out your best interests and voting for someone who supports them. Voting against your own interests is, well, kind of suicidal. :-)

@James, that should be 59%. Thanks for catching that and I'll fix it.

@Daniel, There will always be more of them than there are of us. I'm starting to see why Americans abroad organization don't try to influence public opinion - it's a lost cause. Our interests aren;t theirs.

@anonymous. He does? Oh my. Well that certainly simplifies things for me. No way would I vote for him. The FEIE isn't much but it sure helps - especially for those abroad who earn lower to middle-class salaries. So he wants the au pair, the English teacher, the part-time student to have to sit and figure out how to apply foreign tax credits? That's just crazy. I'll look into it further and I will even do a post if I can. Thank you.

larryc, Oh yeah and the people who've commented here are actually remarkably restrained and polite. You should hear the conversations (and you have probably had a few yourself) that are off the record. I like your point about the candidates being clueless but if they really are than what the hell are Dems Abroad and Republicans Overseas doing? Is their job just to get our votes (and our money) or do we expect them to educate those candidates? I think before they can lay claim to the first, they better get cracking on the second. And if they aren't doing that, then what good are they?

Janet said...

Looks like I previewed but didn't post my message. In case it comes twice, please delete one Victoria.

I haven't yet researched the presidential candidates positions on FATCA and CBT. I will start writing them emails to inquire where they stand. In the past few years I have written so many letters to politicians regarding FATCA and CBT. I always get the same answer - FATCA is essential to combat tax evasion. I have never received an answer concerning replacing CBT with RBT.
CBT is the root problem of all US persons living outside the homeland. All the problems caused by FATCA would disappear under RBT. Like Joe Citizen, I strongly urge you to read (and hopefully support)

The Democrats Abroad have organized a Global Presidential Primary. Read
for complete information

Anonymous said...

I agree with Michele. However the blatant unfairness in taxation (double taxation above a certain income, no recognition of IRA equivalents or the possibility of IRAs definitely need to be addressed. Let's get those emails out yo our candidates of choice!

EmBee said...

You may have missed it but how the 3 Democratic candidates stand on this issue have been partially addressed here:
I have no vote (not American), just an opinion. I like Rocky De La Fuente's answers the best.

bubblebustin said...

This is not exactly on topic - I think previous comments have pretty much covered it all, including (most importantly) EmBee's link to the Democrat candidate's recent official positions on the various issues that affect Americans abroad.

I would just like to express how lucky we are to have you, Victoria, doing what you're doing at such an important time in the history of the American diaspora. I really believe that we represent the last American emigrants who actually believed (however wrong we were) that we were free to leave America, and had all the support that any other citizen of any free country has in choosing to follow their dream/love/passion/career...

Good luck with your studies, and may you stay happy and healthy through what's surely to be a significant era in US history. Thank-you for being here to express so thoughtfully what many of us can't. With your help, we may just prevail.

Victoria FERAUGE said...

Thank you all for passing along the Dems ABroad interviews with the candidates. They also contacted me via twitter. I'll post today about that.

@Janet, It is very frustrating to send those letters and to get back those kinds of responses. Honestly I don't think they will change CBT to RBT anytime soon but I agree that it's what we want. And we should make that very clear.

@Bubblebustin - I think we are living in interesting times. :-) Waking up and realizing the US government has a very long reach has been something of a shock. On the other hand, we got to meet each other and how cool is that? :-) Because of FATCA/CBT I started writing on a regular basis and doing things (like crashing OECD tax meetings) that I never thought I'd do. :-)

bubblebustin said...

Yes, life is full of surprises, and sometimes that bad ones have their blessings, such as the connections we make with those in the same boat along the way. I somehow don't think that will be the last meeting of that nature you'll be crashing, perhaps you'll even be invited! I never would have dreamed a few years ago that I'd be reading 40, 50, 60 page papers on tax issues, but then I never would have dreamed that the IRS would want to set their sights on me either.

Anonymous said...

I emailed Rep. Adam Schiff, "my Congressman" (I haven't lived in the US for 30 years, and I certainly wasn't born there) and he didn't even bother to respond.

That's how much we matter to those people.