Donald Trump has promised to end double taxation for Americans living abroad, targeting the often-overlooked group of overseas voters.
In a statement to the Wall Street Journal, Trump said, “I support ending the double taxation of overseas Americans.”
This is part of a series of tax cuts the former president has promised to implement should he be elected to the White House on November 5. While this tax cut wouldn’t apply to every overseas American, it would provide tax relief to those with investments abroad.
“Fellow Americans living abroad, your vote is more important than ever,” Trump said in the statement to the Wall Street Journal. “No matter where you are, your voice can make a difference.”
As of 2022, 4.4 million Americans live abroad, and about half are eligible to vote from where they live.
What is double taxation?
The United States is known for making citizens living outside the country pay taxes.
Most countries don’t require citizens to pay taxes when living in another country, but the United States does. This means that U.S. citizens living abroad have to pay taxes in both the country they reside in and the United States, which can be a financial burden.
While some Americans abroad have to pay taxes to two countries, many do not need to do so. Whether or not a U.S. citizen must pay taxes abroad depends on their income. U.S. citizens can discount their taxes paid to another country when they file their taxes at home.
Double taxation usually applies to overseas Americans with large investments in the country they are residents in, as the U.S. allows those making less than $126,000 not to pay taxes if they live abroad.
If Trump really implements a policy to end taxation for overseas Americans, this could eliminate a financial burden on many U.S. citizens living abroad. For those with a higher income, this could encourage them to invest further outside of the U.S. and move to tax havens so they could pay minimal taxes in total.
Trump’s tax cuts
As president, Trump has already made many tax cuts and promised to make many more if re-elected. Along with eliminating double taxation, he wants to end taxes on Social Security benefits, tips, and overtime pay.
The tax cut Trump made in 2017 was one of the highlights of his presidency, but the cuts are set to expire in 2025 if whoever wins the 2024 election does not extend the duration of the cuts.
Trump has repeatedly said throughout the election cycle that he would raise tariffs on imports to offset the losses from his proposed tax cuts.
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