April 1, 2008, Hong Kong – The Asia-Pacific Council of American Chambers of Commerce (APCAC), together with AmCham Hong Kong and several other member Chambers of Commerce in Asia, launched a coalition in Washington today on behalf of Americans living and working abroad. The Alliance for a Competitive Tax Policy seeks to eliminate the unfair taxation of American expatriates against what has been the biggest tax increase on American expatriates in 30 years.

Rep. Meeks (D-NY) and Sen. DeMint (R-SC) are sponsors of legislation to eliminate the unfair taxation of foreign income of U.S. citizens and participated in the launch of the Alliance for a Competitive Tax Policy on April 1 on Capitol Hill. They were joined by APCAC members Tami Overby, who is President & CEO of AmCham Korea, William Oberlin, Chairman of AmCham Korea, and representatives from several prominent Washington based business associations, and the Washington tax and trade firm of Akin Gump.

The U.S. is the only industrialized country in the world which taxes its citizens on income earned internationally. U.S. citizens working abroad are taxed by both the country they live in and by the United States.

The Tax Increase Prevention and Reconciliation Act (TIPRA) of 2006 included several provisions which significantly increased the taxation of Americans working and living abroad.

The current American tax system unfairly penalizes many Americans working overseas. In many cases, as a direct effect of TIPRA changes, American working overseas are often pushed into the highest tax bracket, although their salaries and benefits remain the same. Additionally, higher marginal rates were levied on employer-provided payments reflecting the higher cost of living overseas, and the deduction for housing costs was capped at a lower level.

"Saying current U.S. tax law 'subsidises' overseas Americans, as Senator Grassley and others do, is simply wrong. To be fair and accurate, comparison should be made between U.S. expatriates and those of other OECD countries -- not to the Joneses living in downtown Des Moines or elsewhere in the U.S.," contends Richard Vuylsteke, AmCham Hong Kong's president.

"From a competitive viewpoint, the issue should not be whether taxes on overseas Americans are generous relative to those resident back home. The issue is whether they are punitive relative to other overseas nationals and their companies, with whom the U.S. must compete on a level playing field. Some Americans in Singapore already call TIPRA America's 'Australian Employment Act,' because nearby Australians are quickly filling jobs vacated by U.S. citizens with American companies and others," he adds.

"In fairness, the American in Paris is competing against overseas nationals and their companies in Paris, and helping her or him compete should be the business of the US government," Vuylsteke concludes.

The US tax system harms America’s competitiveness by making it even more expensive to hire Americans relative to hiring Europeans or Australians than previously. Experience has demonstrated that Americans often are the best “salespeople” for American products.

Several studies have shown a direct correlation between citizens working overseas and U.S. exports. A 2005 PriceWaterhouseCoopers study estimated that removing the cap on the foreign earned income exclusion would increase U.S. manufactured exports by US$14.4 billion supporting about 138,000 domestic jobs in the U.S.

About AmCham Hong Kong

AmCham Hong Kong is the largest and most active international business association in the Special Administrative Region, with about 2,000 members, representing almost 800 American, Hong Kong, Chinese and other international companies from over 40 nationalities. Hong Kong imports from the U.S. were US$ 17.78 billions and its exports to the U.S. were US$ 7.95 billions in 2006. U.S. companies are Hong Kong's largest investors in insurance and second largest in financial institutions and the wholesale, retail and import/export trades. The S.A.R. represents the regional headquarters for about 250 U.S. companies. For more information about the AmCham Hong Kong, please visit www.amcham.org.hk

About APCAC

The Asia-Pacific Council of American Chambers of Commerce (APCAC) consists of 25 member AmChams in 19 countries and economies. APCAC AmChams represent the growing interests of over 50,000 executives and over 10,000 businesses in 19 countries and economies of the Asia-Pacific region. The APCAC membership manages trade volumes in excess of US$ 400 billion and direct investments (FDI) of nearly US$ 300 billion.

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For further information, please contact:

Fred Armentrout

Communications Director

AmCham Hong Kong

Tel: (852) 2530-6943

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Toni Lau

Press Affairs Manager

AmCham Hong Kong

Tel: (852) 2530-6915

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Kristen M. White
Communications Manager
Akin Gump Strauss Hauer & Feld LLP
Robert S. Strauss Building
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036

United States
DID: (1) 202 887 4536-
Main: (1) 202 887 4000
fax: (1) 202 887 4288

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