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7 Issues American Expats Need to Be Looking Out for This Election

by Monica Williams Jun 24, 2016

1. The rest of the world’s image of Americans

In the years following Bush’s term, it was okay to be American again. Overseas, calling yourself an American often elicited a smile, thumbs up, or an “O-bah-ma!” Tell a foreigner you’re from the United States now and the first thing they want to talk about is Donald Trump. Everyone has heard of him and everyone has an opinion. From China to Colombia, all eyes are on the U.S. election.

It’s rare for foreign officials to weigh in on American politics publicly but some are minding our political business. German Economy Minister Sigmar Gabriel branded Trump a threat to peace and prosperity. Others have something to say, too. Officials from Europe, the Middle East, Latin America, and Asia reportedly have repeatedly complained about Trump’s anti-immigrant and anti-Muslim rhetoric. It isn’t exactly clear on whose diplomats are doing the talking, but it is said that folks in at least India, South Korea, Japan, and Mexico are talking.

Unsurprisingly, Chinese officials have weighed in, urging U.S. voters to take a rational and objective approach regarding the two countries’ relationship when heading to the polls. Trump has proposed that tariffs on imported Chinese goods be increased to 45 percent and asserted that China has waged “economic war” against the United States by taking American jobs and money.

And then there’s the row with London. Trump challenged Sadiq Kahn to take an I.Q. test after the newly elected mayor attacked the billionaire for being “ignorant” about Islam. Trump has also warned that he may not have a good relationship with Prime Minister David Cameron if he’s elected to the White House.

After Obama’s exit, cocktail parties or discussions over the water cooler in Hong Kong may not be the same for expats. At a time of increasing Middle Eastern conflicts, American expats need a leader who bolsters world peace and our image abroad, not someone who is going to destroy it.

As a former secretary of state and senator, Clinton already has relationships and standing in the international community. Her record isn’t squeaky clean but on foreign affairs, she has the upper hand.

2. Immigration

The largest American expat community in the world lives in Mexico, with an estimated population of about 1 million. As a populace, that’s more voting power alone than that of six states and the District of Columbia.

The United States’ neighbor to the south took center stage in this presidential race after Trump began his campaign with a declaration that Mexicans were “rapists.” He then promised to build an impenetrable wall at the border to thwart illegal immigrants. Recently though, he’s softened his stance. The billionaire’s position on H-1B visas is even shaky and it’s unclear where he really stands.

Expats’ take on immigration may come from their experiences as emigrants. For most of them, Trump’s rhetoric comes off as racist and xenophobic. Expats who marry and have children abroad might pause before voting for a candidate with anti-immigration stances. This electorate might be better off going for a Democrat. Both Democratic candidates believe the United States needs to aid the millions of people eligible for U.S. citizenship.

3. Gun control

You don’t have to live abroad long to recognize America’s obsession with guns. The United States leads the world in mass shootings, with 372 in 2015 alone. No other developed country comes close when it comes to gun violence.

In fact, the likelihood of dying by gun violence in South Korea is about the same as an American’s chance of being crushed or pinned to death by an object. When examining U.S. statistics compared to other developing nations, living abroad can seem like a much safer option.

Though Trump advocated for a ban on assault weapons and a longer waiting period to buy guns in his 2000 book The America We Deserve, he seems to have switched gears a bit since launching his candidacy. His 2016 presidential platform pushes to preserve Second Amendment rights and even goes so far as instituting a national right to carry. But since the attacks in Orlando, Trump has said that people on the terror watchlist should be barred from buying firearms.

Clinton has long been an advocate for gun control and seeks laws to curtail gun violence. She’s urged a ban on assault weapons and stronger background checks. After the Orlando massacre, she urged Congress to pass legislation that would ban assault weapons and prevent individuals on the FBI’s no-fly list from buying them.

“It’s not complicated — the gun lobbies scare the heck out of elected officials and makes it a voting issue,” Clinton said in an interview Monday on NBC’s Today show. “It is no longer acceptable that elected officials at every level of government will not recognize the pain of the thousands of people [affected by gun violence].”

4. FATCA, FBAR, and foreign finances

The word “taxes” is always on the lips of the 8.7 million Americans who live overseas. And there’s a primary focus on the F-words: FATCA and FBAR. Since 2010, the much maligned FATCA, or Foreign Account Tax Compliance Act, has required Americans abroad to report assets overseas that exceed certain amounts. The act also stipulates that foreign banks and financial institutions must report on the accounts of their American clients and those clients’ spouses. The law was created to stop Americans from hiding their money in offshore bank accounts, but it’s a game-changer for every expat.

Taxpayers who don’t file the required forms face stiff penalties, even if they don’t owe taxes. FATCA’s additional reporting requirements have also led many foreign banks to refuse to take American clients, and some are even closing the accounts of existing ones, complicating life for expats, who have called for overhauls. Expats also have been denied credit cards and have had difficulty obtaining mortgages. In fact, most expats surveyed in a Devere Group poll said they have considered or explored renouncing their U.S. passport due to FATCA.

The Republican National Committee has begun a campaign to repeal FATCA, arguing that it violates Americans’ right to privacy, which Republican candidate Donald Trump has supported. Under a repeal, for example, an American who is a legitimate resident of Japan would no longer have to report her Japanese bank accounts on the Form 8938 and quite possibly the extensive FBAR form, or Report of Foreign Bank and Financial Accounts. Bernie Sanders supports regulatory reform of FATCA while Hillary Clinton has stopped short of calling for a repeal.

Given that the number of Americans renouncing citizenship has reached an all-time high and continues to spike, the next president needs to take FATCA into account, or possibly see more Americans renouncing their citizenship.

5. Citizen-based taxation vs. residence-based taxation

Speaking of taxes, most of the time those working abroad must report and pay tax where they live. However, under the current citizen-based taxation laws, Americans abroad also have to report to the IRS in the same manner as resident Americans. Other countries don’t tax their citizens living abroad and American expats don’t believe they should be double-taxed either.

Expats attempting to report overseas income to Uncle Sam almost always require an accountant who is well-versed in expat taxation. Because the rules are so confusing and filing is so cumbersome, expats say they’re often taxed unfairly, paying the IRS and their home country on the same income. Although most expats aren’t tax evaders, the candidates have stopped short at saying how they would support residence-based taxation.

6. Passport revocation

If all the tax talk is confusing and you haven’t filed a return in a while, you might want to do so now. A new passport-revocation rule, which made its way into a transit bill signed by President Obama, complicates things even more for expats abroad. The FAST (Fixing America’s Surface Transportation) Act allows the United States to snatch the passport of (or deny renewal to) any American whose tax debt exceeds $50,000, including interest and penalties. While that might seem like a lot of money, it isn’t much considering many Americans abroad don’t know they have to file returns and haven’t been doing so, accumulating interest and penalties rapidly.

Critics of the new regulation say restricting travel is unconstitutional and the IRS isn’t always accurate, and may mistakenly revoke the passports of those who aren’t, say, trying to skip out on a tax bill. Any expat knows communication from home or the IRS sometimes goes missing. None of the candidates have said they would repeal FAST but both Hillary Clinton and Bernie Sanders have said they would ensure taxpayers are given ample time to respond to IRS notices before facing penalties. Now more than ever, it’s imperative that expats carefully review any correspondence they recieve from the IRS and contact the Internal Revenue Service with questions.

7. Voting rights

American citizens living abroad often face challenges when voting in local, state, and national elections. They’ve got to master the complicated and varied requirements in each territory and often their ballot isn’t even received until after the deadline has passed. To complicate matters even more, voters now need to register and request a ballot every election year, since ballots are no longer automatically sent to overseas voters at their previous address on file. In addition, voting in some state or local races may be considered an element potentially justifying liability to state taxation.

In the Democratic primary abroad, Sanders bested Clinton with 69% of the vote from Americans overseas. But only Democrats are allowed to vote in primaries, as Republicans don’t allow Americans overseas to participate in the nominating process. Perhaps if candidates were more actively paying attention to the concerns of Americans abroad, more Americans might not be leaving home in the first place.

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