During his 2024 campaign, Donald Trump promised to eliminate double taxation for American expats, stating, "I support ending the double taxation of overseas Americans!" as reported by The Wall Street Journal.
This move could be a huge win for American expats. Americans living overseas have been subject to stringent reporting requirements that force them to file (and often pay) taxes no matter where in the world they live—also known as worldwide taxation. For Americans living overseas, this can mean a heavy financial burden even if they take advantage of tax credits and exclusions.
Many of my clients are American, and the bulk of my work with them involves their tax liabilities, helping them get second passports and, in some cases, renouncing their citizenship.
Trump’s bold proposal could be a game-changer. But if he gets elected, will he actually keep his promise? Or is it all political discourse? In this article, we’ll briefly go over what this policy would mean for American expats and why you may want to remain cautiously optimistic.
The U.S. is a unique country in many ways, including taxation. While most countries in the world tax based on residency, the U.S. taxes their citizens on their worldwide income. This policy means that if you’re American, Uncle Sam will go after your money no matter where you live. That’s exactly what Trump has vowed to change if he gets elected.
The effects of double taxation are a true behemoth. While Americans living abroad can use tax credits and the Foreign Earned Income Exclusion, there’s still room for Uncle Sam to get a chunk of their money. Moreover, the headache of filling out the required forms to report your income and offshore bank accounts shouldn’t be taken lightly.
Without the headache of dealing with both foreign and U.S. authorities, expats would have fewer barriers to living abroad and operating their businesses. It’d be nice if this draconian worldwide taxation policy gets changed with the stroke of a pen, but only time will tell if it will happen.
While I would undoubtedly favour this move, you’ll have to forgive me for being a little skeptical. Trump was in the White House for four years, but he didn’t move to address double taxation during that time. Even with the significant reforms of the 2017 Tax Cuts and Jobs Act, the global taxation issue stayed the same. Why didn’t he propose this policy shift during his presidency?
Perhaps he just didn’t have as much political momentum at the time as he had mass media and the establishment against him. Trump has spoken about issues that many regular Americans understandably care deeply about, such as illegal immigration and the state of the economy, but he was demonized day in and day out.
Fighting against all of this is not easy. Moreover, the complex U.S. tax laws may have made it difficult for him to end double taxation, or he may have chosen not to play that particular card during legislative negotiations.
If nothing changes, the U.S. will continue to tax its citizens no matter where they live. So, in any scenario, it's better to have the option of obtaining residency in a more tax-friendly environment
I’m certain that every one of my American clients would endorse Trump’s proposal to end double taxation, but what if it’s just a campaign promise—a way to draw in voters without a serious, detailed plan for implementation? Think of his idea of eliminating taxes on tips, which would benefit thousands of workers, but to this day, we don’t know any details of how it will be implemented.
If Trump wins the election and pushes to end the double taxation of Americans abroad, he’ll probably have a hard time getting it through Congress. Any major changes in the tax code would require support from both sides of the aisle, and there’s a good chance that even his own Party wouldn’t sign off on this at the end of the day or that it would just be another forgotten campaign promise that citizens of any country are no stranger to.
My advice for expats is simple: be hopeful yet skeptical. Promising tax reforms on a campaign is one thing, but it’s another to navigate the bureaucratic machine of Washington and make this idea a reality.
I have helped a number of my American clients renounce their U.S. citizenship entirely to get out of the thumb of the invasive U.S. tax regime. Others may remain in the United States until they get a second passport or residency and build out their Plan-B. They understand that putting their eggs in one basket is a huge mistake.
For Americans living abroad, let’s consider the two possible scenarios that could arise if Trump gets elected:
If double taxation ends, it’s great news for expats. The U.S. would adopt a residency-based taxation system, which would reduce the tax burden for expats. They could just move to low-tax countries and benefit from the numerous financial and personal advantages of living abroad.
What if it doesn’t happen? The U.S. will continue to tax its citizens no matter where they live. This will oblige them to incur compliance costs and lots of headaches.
So my advice is quite simple: get yourself a second passport or residency as soon as possible. Under either scenario, you’ll be better off having the option to get a residency in a more tax-friendly environment. Whether Trump delivers on this promise or not, it’s not under your control. But what you can control is finding ways to protect your wealth, mitigate tax liabilities and secure a new life abroad.
While the potential elimination of double taxation is great news, it's wiser to take control of your future now, before it's too late
Trump’s promise to end double taxation for American expats could be a game-changer if it happens. But we still don’t know whether he’ll be elected or if he’ll keep his promise. What we know for a fact is that trusting politicians, regardless of their ideological leaning, is a recipe for disaster and disappointment.
While the elimination of double taxation would be excellent news, it’s smarter to take control of your future now, before it’s too late. Regardless of election outcomes, exploring offshore options is the best way to secure your wealth and freedom. If you are serious about securing your new life abroad, read this important letter.