In This Article
Subscribe to Politics Updates
Ed Ou/AP
Rep. Charles B. Rangel, D-N.Y.
Rep. Charles B. Rangel, D-N.Y.
HEART Act Has Unintended Outcome for Legal Immigrants
July 18, 2008 8:54 AM
by
Anne Szustek
The finances of repatriating Green-card holders are subject to a law steeped in patriotism, yet these legal U.S. residents are under taxation without representation.
Email This30-Second Summary
The Heroes Earnings Assistance and Relief Tax Act, commonly known by its acronym HEART, passed Congress May 22 and was signed into law by President George W. Bush on June 17. The bill guarantees $2 billion in tax relief for members of the U.S. military and their families, including spouses who have not yet received immigrant visas.
Rep. Nancy Boyda, D-Kan., came out in strong favor of the bill on the House floor in November: “Let’s permanently and finally end the Soldier Tax.”
The HEART Act requires employees of U.S. government contractors operating overseas shell companies to pay Medicare and Social Security taxes. “The provision alone is expected to raise $840 million over a 10-year period,” reports Stars and Stripes.
The rule also goes after Americans who renounce their citizenship in a bid to escape the watch of the Internal Revenue Service. But it also ensnares a benign group lacking a vote.
The worldwide financial holdings of those holding green cards for eight of the past 15 years who move back to their countries of citizenship are liable to taxation under the HEART act.
Condé Nast Portfolio points out, “That includes…like…a share of a relative’s business in Bangalore, or a great-grandmother’s pearls kept in a London flat.”
Repatriation entails giving up U.S. permanent residency. The law is only to affect those grossing more than $139,000 a year, but could dissuade employers from searching out foreign talent, or placing foreigners on long-term temporary visas, which prevent spouses from taking up legal employment.
Rep. Nancy Boyda, D-Kan., came out in strong favor of the bill on the House floor in November: “Let’s permanently and finally end the Soldier Tax.”
The HEART Act requires employees of U.S. government contractors operating overseas shell companies to pay Medicare and Social Security taxes. “The provision alone is expected to raise $840 million over a 10-year period,” reports Stars and Stripes.
The rule also goes after Americans who renounce their citizenship in a bid to escape the watch of the Internal Revenue Service. But it also ensnares a benign group lacking a vote.
The worldwide financial holdings of those holding green cards for eight of the past 15 years who move back to their countries of citizenship are liable to taxation under the HEART act.
Condé Nast Portfolio points out, “That includes…like…a share of a relative’s business in Bangalore, or a great-grandmother’s pearls kept in a London flat.”
Repatriation entails giving up U.S. permanent residency. The law is only to affect those grossing more than $139,000 a year, but could dissuade employers from searching out foreign talent, or placing foreigners on long-term temporary visas, which prevent spouses from taking up legal employment.
Headline Link: ‘The (Tax) Law of Unintended Consequences’
The HEART Law passed unanimously in both houses of Congress. Condé Nast Portfolio writes that the law may have the unintended effect of pushing well-paid foreign executives, instead of applying for permanent residency, to opt for “long-term visas, potentially depriving the country of wealthy immigrants.”
Source: Condé Nast Portfolio
Video: ‘Rep. Boyda on Ending the Soldier Tax’
Congresswoman Nancy Boyda, D-Kan., spoke on the House floor in support of the bill. “Over 450,000 of our American troops and their families will pay sharply higher taxes.
Source: YouTube
Background: The Heroes Earnings Assistance and Relief Tax Act
The Heroes Earnings Assistance and Relief Tax Act, passed by Congress on May 22, allocates $2 billion of the federal budget to providing tax breaks to those serving in the military and their families—even foreign spouses who do not have Social Security numbers. "This legislation corrects this injustice to ensure that our active-duty military families are not disadvantaged under our tax laws," said Congressman Charles Rangel, D-N.Y. Military paper Stars and Stripes reports, “The cost of the tax breaks is being offset by three revenue provisions, one of which closes a tax loophole used by some U.S. government contractors.”
Source: Stars and Stripes
Reference: Text of the HEART Act
The full text of H.R. 6081, the Heroes Earnings Assistance and Relief Tax Act, is available online from the Government Printing Office.
Source: Government Printing Office
© 2008 Dulcinea Media, Inc.
