If the Albanese government has the courage of its convictions and makes good on plans to force big tech platforms to pay local media, ex-pats living in the United States could potentially end up having to leave, or return home.
This outcome is also contingent on new U.S. President Donald Trump making good on some of the “America first” trade policy initiatives spit-balled during his first day in office.
Trump has warned foreign companies and nationals that their taxes could double in the U.S. if the government of their home country imposed discriminatory or extraterritorial taxes against American interests.
Here in Australia, the Albanese government’s planned digital platform levy means the likes of Google, Meta and ByteDance would have to pay hundreds of millions of dollars in new taxes if they don’t play dice and agree to pay for Australian news.
Labor’s plans to tax big-tech companies follows comments by Meta last March which suggested the U.S. tech giant was unwilling to sign another multi-year agreement to pay local publishers under the news media bargaining code.
Meantime, Google has been renewing deals with local outlets and is understood to have paid more than $130 million annually in its initial agreements.
Should Trump follow through on this initiative, some wealth advisers are concerned that the 90,000-plus expat Australians living in the U.S. and many thousands of Australian companies operating there may have to leave.
Based on some initial research, an expat earning US$100,000 could end up paying double the current rate of federal income tax US$27,682, up from $US13,841. By comparison the tax bill on a salary of US$200,000 would rise to US$75,076 from US$37,538.
Some wealth industry experts suggest the Albanese government might end up having to drop its big tech levy if Trump follows through on this initiative.
“Ultimately, the focus should be on policies that protect Australian interests without risking unnecessary financial harm to expats and businesses that are already key contributors to Australia’s global footprint,” Atlas Wealth Management managing director James Ridley said.
“I’m sure a number of clients would start to question whether it is financially viable to stay in the U.S. or return home or move to another country depending on their role. Lots of clients’ roles don’t exist in Australia, so returning home would prove challenging to earn the same amount of income commensurate to their experience.”
Responding to media questions yesterday, Treasurer Jim Chalmers claimed the Federal Government was confident it could navigate the right outcome.
“We’re well placed and well prepared to work with American counterparts as the policy agenda changes in the U.S. in expected ways,” he said.
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