http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030516/ts_nm/congress_taxes_dc_17 âTo stay within the $350 billion limit set by the Senate, more than $90 billion of its cost to the Treasury would be offset by revenue-raising measures, such as a $35 billion provision that would eliminate tax breaks for Americans working overseas. Senator John Breaux (news, bio, voting record), a Louisiana Democrat who said the tax breaks are needed to encourage Americans to work abroad, failed in an effort to strike it out of the bill.â Holy Tax Bite Batman! Congress must have figured out that expats never vote! Seems the basis for expat tax advantages are out the window Metoox? Tell us it ain't so ... in complete sentences we can understand.
You here what I am hearing; but that is not the only game. The trouble is that the next level is very expensive to work out ...
FYI a friend provided this clarification: "Just to point out, this provision is only present in the Senate version of the bill. It is not contained in the House version. So it is not by any means a done deal. It may or may not fall by the way side when the two bills are reconciled in conference. I suggest that those of you who are concerned by this immediately voice your concern with your respective elected representatives."
Wednesday, May. 21, 2003. Page 1 For U.S. Expats, Tax Break May Stay By Alex Nicholson Staff Writer A late-night meeting between U.S. President George W. Bush and Republicans from the House and Senate is fueling expectations that an $80,000 tax exemption on expatriate salaries will be left in place. The Senate on Thursday voted to drop the exemption as part of a $350 billion tax-cut package, raising fears among many Americans working in Russia that they would have to start paying taxes both here and in the United States. U.S. expatriates who earn $80,000 per year or less currently do not have to pay U.S. taxes, and an end to the Section 911 exemption would create havoc for both the expats and their employees. The United States hoped to raise $35 billion by dropping Section 911. At the Monday night meeting with Bush, however, senators reached a compromise plan under which the repeal would be removed when House and Senate versions of the tax-cut bill are reconciled by a conference committee, The Associated Press reported. "I do not believe this Congress should raise taxes on some individuals and businesses in order to provide tax relief to others," Senator George Allen wrote Monday to Senate Finance Committee Chairman Charles Grassley, a fellow Republican, AP reported. Allen's office was unavailable for comment Tuesday. "Although the elimination of the exclusion was approved by the Senate, ultimately there's a feeling it won't survive the conference," said Peter Reinhardt, a tax partner at Ernst & Young in Moscow. Andrew Somers, president of the American Chamber of Commerce in Russia, said he was aware of reports about the compromise but stressed there was no reason to assume the danger was over. He said he was encouraging AmCham members to continue to send e-mails of protest to Congress. "We're going to keep going until it's a done deal because these things can change overnight," he said. Bill Henry, tax director at Ernst & Young in Moscow, predicted that any decision would come at the 11th hour, just before Congress lets out for the Memorial Day recess Friday. Bush has asked Congress to reconcile the bill by the holiday. "We ought to be able to get it done before we go home," Grassley was quoted as saying by the Bureau of National Affairs in its daily tax report Tuesday. Other senators were quoted as saying that an additional debate on the Senate floor would make it impossible to put the bill on Bush's desk before the deadline. Republican Senator Trent Lott said his fellow legislators worked Monday to find alternatives to dropping Section 911, the Bureau of National Affairs reported. The legislators were considering a mix of tax increases and other measures to replace the $35 billion that the repeal would have been brought in, Lott said. For companies, an end to Section 911 might mean that they would have to boost salaries or consider hiring non-U.S. citizens. But nongovernmental organizations would be particularly hard hit, as most of their employees earn well under $80,000 per year and few have to pay Russian taxes. "In certain cases it is mandated in our grant agreements that a particular position must be held by an American citizen," said Carol Sorrenti, a program director for IREX, an education-research exchange organization. "When these people accepted their jobs, they calculated their income based on not paying American taxes," she said. "I don't know that all of them would leave Russia if they had to pay American taxes, but certainly many of those with more experience would be tempted to go to the private sector, and probably less experienced people would take their places." Joel Ericson, the regional director for American Councils, which organizes education exchange programs, agreed. "For our organization it would be a tremendous blow," he said. "It would be very difficult for us to maintain our current staff." An informal poll of subscribers to Moscow's Expat List, a message board on the Internet, found that most respondents were dismayed at the Senate's bill. But there also were a few exceptions. "Its inclusion at this stage is theater -- to leave the impression that some hard choices are being made, to give the aura of give and take in the government," one American expatriate wrote. "The major corporations in the U.S. would never allow this to happen. It will be negotiated out of the compromise bill, and the Republicans will be celebrated for this small victory," he said. http://www.themoscowtimes.com/stories/2003/05/21/001.html