Extraterritorial Taxation #14: Revenue Neutrality Makes No Sense
SEAT Working Paper Series #2023/14 (June 5, 2023).
19 Pages Posted: 5 Jun 2023
Date Written: June 5, 2023
This is the fourteenth in a series of sixteen papers about the U.S extraterritorial tax system.
Conditioning the end of the U.S. extraterritorial tax system on revenue neutrality is nonsensical and a barrier to genuine reform.
In seeking to end the U.S. extraterritorial tax system, organizations purporting to represent overseas Americans engage in communications with members of Congress and other policymakers. During these communications, it is the duty of those organizations to not submit to the artifice of revenue neutrality.
Instead of submitting, such organizations must seek to effectively communicate to members of Congress and other policymakers the true nature of the U.S. extraterritorial tax system. They must seek to effectively communicate how the system is not merely “unfair” – but that it violates multiple constitutional and other fundamental rights. Ending the system is not a “tax cut,” but is the much-needed – and only true – remedy to these violations.
If any organization does not fulfill these duties – if it insists upon revenue neutrality – its insistence will become a self-fulfilling prophecy. That organization will doom its efforts as well as the efforts of other organizations and individuals seeking to achieve genuine change.
Keywords: Extraterritorial Taxation, Revenue Neutraility, PayGo, Residence-Based Taxation, Modern Monetary Theory, Advocacy
JEL Classification: D63, F62, H24, H30, H60, K34
Suggested Citation: Suggested Citation