How U.S. Expatriates will impact the 2020 Presidential Election

How Important is the Expatriate Vote?

There are currently at least 2.9 million U.S. citizens living outside the U.S. that are eligible to vote in the 2020 federal election. This is more registered voters than are present in Colorado, Alabama, South Carolina or Kentucky to mention only a few.

Data collected by the Federal Voting Assistance Program (FVAP) has found that stateside U.S. citizens are over 13x more likely to vote than those living abroad. However, despite the comparably low voting activity of Americans overseas, research has found that expats are just as interested in U.S. politics as those living within the US.

Following on from this Bambridge Accountants surveyed a sample of U.S. Expats to assess whether there will be a higher portion of U.S. expatriates voters this year. The survey found that 45% of eligible voters, who had not voted in the 2012 or 2016 election, will 'definitely' be voting this year. This, combined with the growing U.S. political activism seen online brings weight to believe that expatriates will vote in record numbers this year.

This would not have been the first time that U.S. expatriate has had a decisive vote in the U.S. election. In the 2000 presidential election, the overseas ballots put George W. Bush narrowly ahead when the Florida recount was stopped by the Supreme Court.

The graphs show the approximate figures of eligible U.S. expatriate voters VS the amount that actually vote. As we can see, the number of active voters increased between 2012 and 2016 by 60%, while the eligible population only grew by 6%. These figures show how a larger proportion of expats are utilizing their right to vote. This trend would suggest a higher proportion of overseas voters can be expected in towards the 2020 presidential election. Julia Bryan, the Global Chair of Democrats Abroad, supports the foreseeable increase in votes telling VICE 'We are very on track to double the abroad vote'.

What are the trends in Expat voting?

Both Democrats Abroad and Republicans Overseas has reported a rise in demand this year. When comparing website traffic in 2016 with the traffic in 2020, democrats abroad cited a 260% rise.

Historically, Americans abroad have voted for the Democrats. There are indications that this may not be too dissimilar this year, with the UK Chair of Democrats Abroad, Inge Kjemtrup stating that there has been an 'unbelievably strong determination to get rid of Trump'. In a survey of U.S. expat opinions, 84% of expats said they did not agree with how the U.S. Government have handled Coronavirus. This widely shared opinion is likely to have lost Trump a large portion of votes during the election

However, this is not to say there is not a large following for the Republicans Overseas. Mr Senson, an American living in London, told The Independent of how he had been delightfully "surprised" over how President Trump has governed and stated he will be voting for the Republicans this year.

Which party is the most U.S. Expat friendly?

The Democratic party has proposed a much more radical tax plan than previous years. Biden has pledged to raise taxes and spend the additional revenue on social programs. These tax rises will not only affect corporates but also individuals.

Plans include raising the top rate income tax rate from 37% to 39.6%. Capital Gains Tax is also set to rise from 20% to match ordinary income tax rates.

Americans overseas will generally not be affected since many expats pay higher tax rates in their country of residency and so can claim Foreign Tax Credit (FTC) or the Foreign Earned Income Exclusion (FEIE).

However, Bidens policy will not include a deduction for Expats with a foreign-registered corporation that is a subsidiary of a U.S. firm. This means that the expat will no longer be able to deduct half the tax on profits, essentially rising the GILTI tax from 10.5% to 21%.

The Republicans have not yet announced their tax plans in detail. Therefore, no changes to income tax, corporation tax or GILTI are likely to be announced any time soon. Trump has however announced he would like to reduce taxes for low and middle-income earners.