As the 2024 elections approach, expats thinking about moving to the U.S. are keeping a close eye on how the results might affect them. Let’s look at some of the implications of a new administration on immigration, taxation and finance for expats.
Visas and Green Cards
Historically, the approach to immigration and the ease of obtaining visas or green cards in the United States has fluctuated significantly depending on the administration in power. If the Democrats were to win in 2024, based on past actions, one might expect efforts similar to those during the Obama era. This could include expansions of visa programs and initiatives to streamline the green card process. For example, President Biden has proposed reforms to the U.S. immigration system that include clearing employment-based visa backlogs, improving access to green cards for workers in lower-wage sectors, and recapturing unused visas.
In contrast, the previous Republican administration took a more restrictive stance on immigration. One of the most notable actions was the attempt to rescind Deferred Action for Childhood Arrivals (DACA), alongside the imposition of a travel ban affecting several predominantly Muslim countries. A Republican win, looking at the precedent set by Trump previously, could lead to tightened visa allocations. For instance, President Trump implemented a series of executive orders that led to increased scrutiny and denial rates for H-1B visas and proposed a shift to a more merit-based immigration system, which could mean prioritizing applicants with higher wages and skills.
Under the previous Trump administration, the Tax Cuts and Jobs Act (TCJA) of 2017 was one of the most significant tax overhauls in recent history. It reduced the corporate tax rate from 35% to 21% and also lowered individual income tax rates across most brackets. The TCJA also increased the standard deduction, which reduced the taxable income for many Americans but scaled back certain deductions, which had a mixed impact on expats depending on their individual circumstances.
Biden, on the other hand, has bought in several changes aimed at increasing tax revenue from high earners and corporations. For instance, Biden’s raised corporate tax rate from 21% to 28% and increased the top individual income tax rate from 37% to 39.6% for those earning more than $400,000 per year. Furthermore, Biden’s administration has been keen on cracking down on tax loopholes that allow profits to be shifted overseas and has pushed for a global minimum tax to curb tax avoidance by multinational companies. Biden’s tax plan also includes provisions to increase the Global Intangible Low-Taxed Income (GILTI) tax rate, which would affect U.S. companies with foreign operations and potentially their expat employees in the U.S. For example, this could impact the tax situation for expats from countries like India or China who are on assignments in the U.S. for companies with substantial overseas operations.
The financial landscape for expats in the U.S. is closely tied to the country’s economic policies, which are often influenced by the party in power. Issues like banking regulations, investment opportunities, and currency exchange rates could all see changes based on the election outcome. A Democratic win might lead to stricter banking regulations and more robust consumer protection laws, while a Republican victory could favor deregulation and pro-business policies. Shifting the focus to the financial landscape and how it affects foreign expatriates living in the U.S. under potential future plans by Trump and Biden, we can draw from their previous policies and stated agendas.
If Trump were to win the election, his administration would likely continue the trend of financial deregulation seen during his previous term. The Trump administration had rolled back portions of the Dodd-Frank Act with the Economic Growth, Regulatory Relief, and Consumer Protection Act, which eased regulations on small and medium-sized banks. This deregulation was aimed at boosting economic growth and could be seen as beneficial for foreign expats who invest in the U.S.
However, it’s essential to acknowledge that while some expats may have found short-term benefits in Trump’s deregulation approach, it brought about significant financial instability for many others. The unpredictable nature of his economic policies, trade wars, and fluctuating international relations created an atmosphere of uncertainty. For expats, this meant that their investments and assets could be affected by sudden policy shifts and trade disputes, making it challenging to plan for their financial future in the U.S.
When Joe Biden took office, his administration aimed to bring stability and predictability to the financial landscape. Biden’s approach focused on re-establishing diplomatic relationships and multilateral trade agreements, which had been strained during Trump’s tenure. This contributed to a more stable international environment and reduced the risk of abrupt policy changes negatively impacting expats’ finances.
Biden also proposed changes to tax policies that were generally more favourable to expats. He aimed to provide relief to Americans living abroad by addressing issues like the Foreign Earned Income Exclusion and the Global Intangible Low-Taxed Income (GILTI) tax, which had been of concern to many expats. These policy adjustments sought to make it easier for expats to manage their finances and ensure they weren’t burdened with excessive tax liabilities while living and working abroad. In terms of the broader U.S. financial landscape, Biden’s administration prioritized infrastructure investments and support for small and medium-sized businesses, which indirectly benefited the economy and potentially created more investment opportunities for expats.
The outcome of the 2024 election in the United States is expected to have a profound impact on the social experiences of expats living in the country. If the Democratic party wins in 2024, stricter laws could be implemented to combat hate crimes and discrimination in various aspects of life, such as housing, employment, and public services. This would create a more secure and equitable environment for expats, reducing the risk of discrimination and xenophobia.
Additionally, a Democratic administration is expected to maintain support for cultural integration programs. Expats can anticipate ongoing funding for initiatives like language classes, cultural exchange programs, and community events that aim to bridge cultural gaps. These programs would facilitate a smoother transition for expats into American society, enabling them to preserve their cultural heritage while also embracing their new home. A Democratic victory might lead to improved access to social services for all residents, including expats. This could manifest in expanded healthcare options, better-funded public education, and enhanced social support systems.
Conversely, if the Republican party secures a win in 2024, expatriates may face a different social environment. A Republican administration is likely to prioritize nationalistic policies, which could create challenges for expats. There might be an increased expectation for expats to assimilate into American culture, potentially diminishing their ability to maintain their cultural identity. Furthermore, a Republican-led government is expected to take a tougher stance on immigration. This could result in stricter rules affecting expats’ ability to enter and remain in the U.S. Visa processing times may become longer, and visa requirements might become more stringent, potentially complicating the immigration process for expatriates.
It is essential to bear in mind that the actual policies and their impacts may vary, underscoring the importance for expatriates to stay informed and actively engage in discussions about potential changes in the social landscape.
The 2024 U.S. elections hold the potential to significantly alter the landscape for expatriates planning to move to America. While Democratic policies might offer smoother immigration processes and potentially higher taxes, the Republican agenda could introduce stricter immigration measures, albeit with the promise of more financial incentives and lower taxes. Expats should remain vigilant about these outcomes, as they not only impact financial considerations but also the social environment.