Amy in Australia faces a brick wall of double taxation and FATCA-led financial exclusion

“Banks and the U.S. government treat me as if I were a billionaire tax cheat simply because I’m American.”

— Amy in Australia

Dear Congress, 

I am an Australian-American dual citizen. My mother was from Florida, but I was born in Australia. Now 44, I have always lived and earned in Australia. I am an average income earner – in the property business – and not some billionaire tax cheat. But banks and the U.S. government treat me as if I were, simply because I’m American.

I have been refused service by a number of Australian financial institutions due to the reporting requirements placed upon them under FATCA. Essentially, thanks to FATCA, I am disadvantaged as a result of being a U.S. citizen abroad.

Filing an American tax return is complicated. For this reason, I need to pay a tax specialist AUD$1,000 (about USD $685) a year to file my U.S. tax return for me. As I am an average income earner, this extra expense hits me hard.

The Australian government imposes mandatory retirement savings on Australian citizens and residents. This is called superannuation. I understand that when I draw down on my superannuation in my old age, the U.S. government will tax this because they incorrectly believe superannuation is a foreign investment vehicle rather than retirement savings. This is unfair and unacceptable because all of this money is Australian-earned!

The U.S. government has the right to tax the capital gain on the sale of my home in Australia. I am aware that they only tax it if the capital gain is over a certain level. However, many cities in Australia are super expensive. Increases in property values in these locations will easily place a person over the threshold for the U.S. capital gains tax. To add insult to injury, the tax paid to the U.S. government reduces the funds available to purchase another property to live in. There is no valid reason why U.S. government has any business taxing an Australian property. Yet, the existence of this tax is a constant weight on my mind because Sydney, where I live, is among the most expensive cities in the world.

Many U.S. citizens abroad have been told that we should pay taxes to U.S. government because of services they give us. All of the services I receive are paid for by the Australian government. Therefore, this argument appears to be invalid.

The only way to prevent people like myself from being unfairly punished like this is for U.S. government to adopt residence-based taxation. Please support the Residence-Based Taxation for Americans Abroad Act when it crosses your desks – hopefully soon but not soon enough!

Sincerely,

Amy in Australia