News & Insights

The Honorable Bill Frist

Majority Leader

United States Senate

Washington, DC 20510

Dear Mr. Majority Leader:

We support and appreciate recent Congressional action providing tax relief and strengthening the U.S. economy.  As you continue consideration of this legislation, we ask that you avoid using revenue offsets that would raise taxes on U.S. businesses and American workers abroad.   

Specifically, we write to express our concern about the proposed repeal of IRC Section 911 included in S. 1054, “Jobs and Growth Tax Relief Reconciliation Act of 2003.”  IRC Section 911 allows U.S. citizens living and working abroad to exclude up to $80,000 in foreign earnings from gross income.  The United States is one of the few countries levying income taxes based on nationality, not residency, potentially subjecting Americans working abroad to double taxation.  IRC Section 911 minimizes that burden.   

The repeal of IRC Section 911 clearly is contrary to the intent of the overall legislation.  Its repeal will result in the shift of tens of thousands of jobs now held by U.S. citizens working abroad to foreign in-country workers and/or significantly increase the financial burden on U.S. multi-nationals, reducing their ability to compete in foreign jurisdictions. 

When Congress last addressed IRC Section 911 six years ago, it increased the exclusion amount to $80,000, thereby recognizing the significance of the provision, in advancing the global competitive position of U.S. companies and in retaining jobs for qualified U.S. workers in important international posts.  These goals are more important now than ever.

We recognize the struggle to finance the tax relief measures in the Senate’s growth package; however, targeting U.S. multinationals and expatriate workers is counterproductive.  We strongly believe that the repeal of IRC Section 911 would send the wrong signal both to U.S. businesses struggling to compete globally and to U.S. workers already coping with the effects of a weaker dollar and a sluggish global economy.  We respectfully request that repeal of IRC Section 911 be removed from the Senate tax bill.

Sincerely,

Organizations

  
American Chemistry Council
American Citizens Abroad
American Council on International Personnel
American Petroleum Institute
Associated General Contractors of America
The Business Roundtable
Coalition of Service Industries
The Financial Services Roundtable
Information Technology Association of America
National Association of Manufacturers
National Foreign Trade Council
Software Finance and Tax Executives Council
U.S. Chamber of Commerce
U.S. Council for International Business