MAGA Republican launches bid to abolish income tax on Americans living overseas

By GEOFF EARLE, DEPUTY U.S. POLITICAL EDITOR

Published: | Updated:

A prominent House Republican has filed a bill to meet Donald Trump‘s call to end income tax for Americans who live abroad.

Proposed legislation by Illinois Republican Rep. Darin LaHood would allow expatriate Americans to pay taxes in the country where they live, without having to file tax returns in the U.S.

Trump pitched the idea in October while appealing for the votes of Americans living overseas.

‘You have to make sure that you are registered and you are going to vote because I’m going to take very good care of you,’ Trump pledged in a video posted by a group called Republicans Overseas. 

‘Once and for all, I’m going to end double taxation on our overseas citizens. You’ve been wanting this for years, and nobody has listened to you. And you deserve it. And I’m going to do it,’ he said.

‘It’s the right thing to do and no American leader has ever been able to,’ said Trump.

‘I’m going to get this done for you – it’s a big one,’ Trump said. 

It was one of several tax cut proposals that Trump threw out during the campaign.

Others included ending taxes on tips, on Social Security benefits, and making car loans tax deductible.

Donald Trump called for ending U.S. income taxes for American expats during the campaign. He also called for ending taxes on social security benefits and for making car loans tax deductible

The bill introduced by LaHood, a member of the powerful House Ways and Means Committee, would end the requirement that Americans pay income tax in the U.S. no matter where they live.

The U.S. has agreements with some countries that can ease the burden on expats.

There is also an income threshold that excludes the first $126,500, protecting lower income earners abroad. American expats would still have to pay taxes on U.S.-sourced income.

‘There’s fundamental unfairness in the way this is currently done, so it’s exposing that, reminding people this is being done and letting people know there’s a clear remedy,’ LaHood told the Wall Street Journal.

Americans also can receive foreign tax credits for forms of overseas income.

The bill would have to be reintroduced in the new Congress, and must pass the Republican-controlled House and Senate and get signed by Trump to become law. There was no immediate cost estimate. 

Rep. Darin LaHood (R-Ill.) introduced legislation taxation of Americans living abroad

Trump pitched the idea in a video he posted seeking the votes of Americans living overseas

Solomon Yue (to Trump’s left), CEO of Republicans Overseas, has been touting the idea

Wealthy Americans worth more than the estate tax cutoff of $13.61 million would have to pay a ‘departure tax’ if they enter a new system under the bill, according to the Journal’s analysis. 

Any tax legislation to emerge must make it through a very narrowly divided House, and would have to potentially overcome a Democratic filibuster in the Senate, giving the minority a seat at the table, unless Republicans try to move it under special protected ‘reconciliation’ procedures. 

LaHood, whose father is former Rep. Ray LaHood, a longtime House member and former Transportation Secretary under Barack Obama, is a conservative Republican who has backed Trump’s tax cut plans, although he voted to certified the electoral votes that made Joe Biden president. 

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