Trump Woos American Expats by Promising to End Double Taxation

GOP presidential nominee Donald Trump is attempting to woo another group of potential voters ahead of next month’s election by promising them more economic advantages.

This week, the former president said he would end “double taxation,” something that affects many Americans who live in other countries. This follows in a long line of economic promises that Trump has already made, including not taxing Social Security payments that seniors get, tips or overtime.

In a statement, Trump’s campaign said:

“I support ending the double taxation of overseas Americans.”

Any U.S. citizen who lives in another country must pay taxes on all of their income, even if that income was earned outside of America’s borders. At the same time, the country where the person earned the income might also require them to pay taxes, which could result in their income being taxed twice.

The IRS says that all U.S. citizens must file income, estate and gift tax returns and “pay estimated tax in the same way as those residing in the United States.”

Americans who live in another country, though, don’t have to pay taxes to the U.S. government on the first $126,500 they earn per year. They’re also eligible to gain some tax cuts in their foreign country.

The U.S. does have treaties with some countries that allow expats to receive tax exemptions and reduced tax rates. In this way, it’s possible for some U.S. citizens living in other countries to use these tax credits to reduce how much they owe to the U.S. government, which could in turn actually have them avoid being double taxed in the first place.

Still, Trump wants to make sure that expats know he has their piggy banks in mind.

The Federal Voting Assistance Program estimated that there were roughly 4.4 million American citizens living in another country as of 2022. Of that total, roughly 2.8 million still were allowed to vote in the former U.S. state in which they lived.

The Wall Street Journal issued a report after Trump made those statements saying that the former president made this announcement to specifically encourage U.S. citizens who are living in Israel to vote for him.

Double taxation typically only applies to people who earn a lot of money per year, or who have a lot of retirement income or investments.

The Association of Americans Resident Overseas is a group that has been pushing for a similar tax policy to the one that Trump proposed this week. The organization released a statement this week that said:

“A complete tax system, unique in the world, unfairly burdens American citizens abroad. It imposes significant costs on tax preparation and reporting, often where no tax is due and many times leads to double taxation.

“To address these issues, our organizations advocate ending citizenship-based taxation and aligning the United States with the universal practice of residency-based taxation.”