This is post is based on one of two submissions that I submitted in response to Senator Hatch’s request for submissions regarding tax reform.
Responding to Senator Hatch’s request for Feedback on Tax Reform
July 17, 2017
Why is the United States imposing full U.S. taxation on the Canadian incomes of Canadian citizens living in Canada?
The Internal Revenue Code mandates that ALL “individuals” EXCEPT “non-resident aliens” are subject to full taxation under the Internal Revenue Code. The word “individuals” includes U.S. citizens regardless of where they live and regardless of whether they are citizens and residents of other countries where they also pay tax. This means that, by its plain terms, the United States imposes full taxation on the citizens and residents of other nations, because they are also (according to U.S. definitions) U.S. citizens. The United States is the only country in the world that has such a broad definition of “tax residency”.
The United States is “making noises” about “tax reform”. Senator Orrin Hatch requested submissions from “
steak stake holders” on what should be included in tax reform. He has clearly received (as did the Ways and Means Committee in 2013 and the Senate Finance Committee in 2015) many suggestions advocating the repeal of “citizenship-based taxation”.
As noted at a site compiling the submissions of those affected by U.S. extra-territorial taxation: