The Prosperity Corps: Millions of Americans Selling Products and Services Abroad | Commentary
By John L. Habib On Oct. 14, 1960, President John F. Kennedy made an impassioned plea to University of Michigan students, exhorting them to move abroad and assist nations struggling under the weight of underdeveloped economies. Kennedy was convinced American talent is a unique, effective export commodity.
That speech laid the foundation for the Peace Corps, officially formed in 1961 by executive order. Now, 65 years later, the Obama administration should revolutionize Kennedy’s bold stance by adopting policies that aggressively promote what should be labeled “The Prosperity Corps” — the estimated 6.3 million Americans living and working outside the United States.
This nation of expats represents a job-creation juggernaut, an export-promotion powerhouse.
Serving informally as economic ambassadors, Americans toiling in foreign markets are far from “spoiled fat cats.” Instead, they sustain and grow new and existing companies, while creating valuable business networks for Americans back home who are similarly dedicated to enhancing U.S. business presence in far-flung markets.
Statistics recently trumpeted by the U.S. Department of Commerce show that the sale of U.S. products and services is surging in foreign markets. This is occurring not just in traditional overseas industries such as oil and gas, military defense/aviation and financial services. U.S. workers are prominent and prosperous in many “new economy” sectors overseas as well, such as information technology and software development, and the rapidly evolving renewable energy and energy conservation industries.
The United States directly benefits from domestic manufacturing output that is exported to these countries. For example, United States exports are disproportionately large to the United Arab Emirates, including aircraft, vehicles and electronic and general machinery. The presence of an estimated 50,000 Americans in the UAE has no doubt directly contributed to dynamic growth in bilateral trade volume with UAE, with exports from the U.S. tripling over the past 10 years, yielding positive economic ties and benefits for U.S. workers.
Expat Americans also spur foreign direct investment back into the United States, further creating jobs and prosperity inside the homeland.
Americans abroad organize themselves in many ways to maximize their influence, particularly by their membership in the thriving AmCham business council network which spans across 100 countries. April 20 marked the launch of the annual Washington, D.C., Export Promotion Week sponsored by AmCham Abu Dhabi on behalf of the Regional Council of AmChams of the Middle East and North Africa Region.
When considering tax reform, Congress and the administration are rightfully considering provisions to make American companies more competitive overseas. Sadly, since Kennedy’s inspiring words, our tax system has fallen out of step with our competitors, and we have taxed our overseas Americans in an uneven playing field. The same tax policy approach should be applied to Americans working abroad: tax revenue where it is earned. A more competitive tax code for Americans abroad means additional benefits for our domestic economy.
Another example of U.S. tax policy making it harder for citizens working abroad is the application of inexplicably complex and overly intrusive regulations promulgated under the Foreign Account Tax Compliance Act. FATCA, signed into law in 2010 but fully effective in 2015, is designed to stop tax evasion. This is a worthwhile goal, but the regulatory net applies so broadly that personal and business accounts of law-abiding Americans simply trying to comply with the rules are caught up in its paperwork net — and drowning.
The impact is not just needless hassle. FATCA has made overseas Americans far less attractive as employees or business partners. Policymakers should recognize that if hiring an American as a key executive means subjecting a business to significant costs and intense scrutiny of a company’s accounts, reasonable foreign companies will shy away from the burdens of hiring Americans, placing our citizens at a great disadvantage in foreign employment markets. FATCA needs to be fine-tuned to be more rational and avoid some its negative impacts on honest, hard-working Americans overseas.
AmCham’s Export Promotion Week agenda renews calls for Congressional legislation and Treasury Department regulations that actually treat these hard-working Americans as The Prosperity Corps that they truly represent for the nation’s interests internationally.
John L. Habib is co-owner of a US-UAE joint venture law firm based in Abu Dhabi, and a board member of AmCham Abu Dhabi and AmCham MENA.
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