US taxpayers, heed President Obama’s 24 February speech

by Andy Sundberg

Andy Sundberg is a long-term US resident overseas and founder and director of several overseas American organizations

If you read the speech that President Barack Obama addressed to the Congress (Ed. note: video at the end of this post) yesterday, it will take a bit of an effort to try to find any mention of Americans who live and work abroad. But there are some and I have highlighted a couple of these for you.

Okay, okay, we are only about 4 million, or just a bit over 1% of the total U.S. population, so we should exercise our long familiar self-restraint and humility in any such quest.  And, of course we also have to accept the sad fact that we have long been ignored or even suspected of perfidy for having chosen to live away from our home country.  But, at least from our own perspective, many of us actually do believe that we fill a rather unique and very positive role in our nation’s and the entire world’s economy, so our curiosity as to where we might fit into the latest initiatives of our new government are certainly legitimate.

Some might have assumed that there would be at least a minimal recognition and encouragement to those of us on the front lines of our country’s private sector interface with the other peoples of the world.  Alas, nada.  Or almost.

What was mentioned, in keeping with a standard mantra of the last four decades, is the following:

“We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.”

WOW. But that is not only silly but also dangerous.  In almost all cases this was never the principal reason for U.S. companies to invest abroad.  They do so to compete directly on the ground to open up world markets so that exports of finished U.S. products and services as well as raw materials and fabricated components from U.S. origins can also play an important role in these markets.

And just pause for a moment to think of all the foreign investment in production facilities in the United States.  Should foreign governments now also seek to emulate our bizarre attitude and impose heavy tax penalties on their overseas entities and investors too to indulge in this unique U.S. proclivity to vigorously tip the level playing field against its own citizens?   Has anyone in Washington ever sought to understand the rules of the trade game in the world today, or even talk about them with its own citizens who live and work abroad?  If not, why not?

So such condemnations of alleged tax breaks are not indications of sound new policy choices at all but instead just more manifestations of the curious but classic American dislike for having to face up to the realities of competition in world markets and what it takes to survive in the face of ever changing strategies and legal and financial obstacles that define this world marketplace.

On the other hand the promises that the President made in the following statement should also be kept carefully in mind too as you fill out your overseas American tax return this year:

“In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans.

But let me perfectly clear, because I know you’ll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut – that’s right, a tax cut – for 95% of working families. And these checks are on the way.”

So checks soon in our mailboxes too?  Maybe, in which case a hearty Hip Hip Hoorah after all.  But also make sure your tax advisor is aware of this vibrant and enthusiastic Presidential promise. This could turn out to be a very interesting year indeed!

Video from the White House, President Obama’s speech (Adobe 10 needed to view: (download) allow streaming time to load)

Comments

  1. Once again, I’m truly inspired, exhilarated & confident in our President ; at last one who speaks to the people, for the people, which gives us not only motivation but empowerment & joy to take on responsibility, to take on what I & we can do for our country with great enthusiasm, no matter how hard the task, for it’s somthing that stirs up the passion within ,to roll up our sleeves, dig in and achieve even once so called “impossible things” when we know we have a great leader to lead us into the light at the end of the tunnel – in other words to re-make and reform America for all of us. God bless him !and America !