On May 17th 2006, President Bush signed the inappropriately named Tax Increase Prevention and Reconciliation Act of 2005. This act will significantly increase the U.S. taxation of many Americans living abroad and make thousands of U.S. companies less competitive in international markets. The Act is retroactively effective as of January 1, 2006. We urge all U.S. citizens living abroad to join us in actively expressing our discontent of this issue by joining us in sending faxes from as many people possible to Members of U.S. Congress officials.

There are two adverse provisions in this new law: (1) the exclusion for housing has been limited to approximately U.S. $12,000 per year, and (2) a new "stacking" rule means that you will only be able to deduct any remaining foreign earned income exclusion against the lowest tax rates instead of against the highest tax rates.

These new rules make American companies operating abroad with American citizens massively uncompetitive against companies that employ staff from other countries, and will result in a drastic decline in US exports.

Americans are already the most expensive to hire overseas as it is, and the expected impact of this new legislation is as follows: 1) expendable U.S. citizens will either be sent home or replaced with TCNs (3rd Country Nationals) and 2) U.S. citizens who remain abroad will cost their firms significantly more money, resulting in U.S. companies becoming much less competitive.

There are currently over 3 million U.S. citizens living and working outside the U.S. This is more than the entire population of the state of Iowa or Mississippi without a visible supporter in the Senate, House or any other official representation. Current taxation of U.S. citizens overseas is already out of step with the international norm, as no developed country other than the U.S. imposes any tax on foreign earned income. Some other nations which choose similar paths with the U.S. are Eritrea, North Korea, the Philippines, and Vietnam.

In response to this legislation, the most powerful weapon is a mass response from outraged Americans living abroad; you. Together, we need to let Congress know that we care about this issue very deeply. U.S. citizens all around the world living abroad have begun to contact officials back home. Please join us in taking part in this important movement, your voice will prove to be very significant to this important issue. We are asking Congress to repeal the adverse tax provision that increases the cost of living and doing business for Americans overseas and makes American companies less competitive.

Make Your Significant Voice Be Heard! Here's What You Need To Do:

Since the most effective way to communicate, by far, is by fax, we urge you to fax the 2 attached letters to:

• Senator Grassley from Iowa (chair of the Senate Finance Committee and a big advocate for increasing taxes on overseas Americans) and Representative Bill Thomas (chair of the House Ways and Means Committee).
  
• Your congressman back home and your two senators.

• Letter to Senator Grassley and Congressman Thomas
  
• Letter to Congressmen
  
• Online directory for the 110th Congress
• Phone and Fax Numbers of Senators