Trump pledges to cut taxes for Americans abroad in latest bid to woo voters, by Reuters

By Kanishka Singh

WASHINGTON (Reuters) – Republican presidential candidate Donald Trump has pledged to cut taxes for U.S. citizens living abroad in his latest bid to woo voters ahead of the Nov. 5 election, in which he is locked in a race tight with Democratic Vice President Kamala Harris.

WHY IT’S IMPORTANT

Both Trump and Harris have made economic pledges in recent weeks to woo voters. Harris said he would try to pass a tax cut for the middle class, while Trump has supported tax cuts for overtime pay. Both candidates supported eliminating tip taxes.

KEY QUOTE

“I support ending the double taxation of Americans overseas,” Trump said in a statement from his campaign. The Wall Street Journal was the first to report Trump’s plans. The statement did not provide specific details on how it would proceed with the policy.

CONTEXT

Americans who live or travel outside the United States are required to file income tax returns, estate tax returns and gift tax returns and “pay estimated tax in the same manner as those who reside in the United States,” according to the Internal Revenue Service of the USA.

The US has tax treaties with a number of foreign countries that already allow for reduced rates and exemptions. Americans living abroad don’t have to pay U.S. taxes on their first $126,500 in earned income and are eligible for some foreign tax credits, according to the IRS.

Claiming the foreign tax credit can allow individuals to effectively reduce their US tax liability and avoid double taxation on the same internationally earned income.

BY NUMBERS

About 4.4 million US citizens lived abroad as of 2022, according to data from the federal Voting Assistance Program. About 2.8 million of them were eligible to vote in their former states.