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US offers to pay social security taxes back to Indians who work in the US for at least 4-5 years

Indo-US talks resume on forging a Totalization pact.

By Sujeet Rajan

NEW YORK: After five years, the US and India are back to the negotiating table on the contentious issue of a Totalization pact, which would entail giving back social security contributions to Indian workers who work temporarily in the country, and then return back to India.

In all, four previous rounds of talks have taken place over a decade, with no results.

Indian professionals contribute more than $1 billion each year to the US social security system through taxes, and get no benefits from it if they were to return back to India. In all, it’s estimated that Indian professionals have contributed a total of $25 billion in social security taxes alone in the past decade.

Social Security is the largest social welfare program in the US, accounting for 37% of the government expenditure and 7% of GDP.

The Economic Times, which reported the new development, said a US government delegation met Indian embassy officials in Washington earlier this month. An Indian team will follow up on the talks with a visit to Washington next month.

The issue was also taken up during the trade policy forum meeting in November last year, co-chaired by commerce and industry minister Nirmala Sitharaman and her US counterpart Michael Froman.

The Times report, quoting an unnamed Indian government official, said the US have suggested a pact based on returning social security taxes collected from Indian workers who stay in the US for at least four-five years, before returning to their home country.

The US delegation also sought details of similar universal benefit schemes in India to decide on the course of negotiations, the report said.

The Indian delegation, however, rejected the proposal by the US delegation on minimum stay requirements. Instead, they have asked for social security contributions to be returned to all Indian citizens who return back to their home country.

The US has entered into a Totalization pact with 24 countries.

“Both India and the US have entered into similar agreements with countries including Denmark, Belgium, Germany and Canada, and there is no reason why such an agreement cannot be concluded between India and the US,” the Indian official was quoted as saying by the Times.

A pact to return social security taxes would be a big blow to the US given the large number of Indian professionals who work for short durations in the US.

If the pact does indeed come through, then the US would also be forced to take a hard look on how to reform the immigration system to induce skilled professionals from India to settle down permanently in the country, which would point to a more expedited way to push through Green Cards, primarily.

It’s also interesting that the US would offer to return back social security taxes to skilled workers who return back after 4-5 years. It is more than the length of time that an H-1B visa is granted for the initial period of three to four years. It’s likely that the US reckons that after that, not many Indians would want to return back to India, thus curbing the economic damage.

Anyway, a Totalization pact would be great for all professionals from India, who decide to settle here or not.

 

19 Comments

  1. Social security taxes -morally and ethically must be returned or benefits given.
    H1 and L1 people pay federal and state taxes- no problems with that. However, social security and medicare taxes are paid with an understanding that benefits for such payments would be made in future. If no benefits can be paid because of citizenship status, then it is simply wrong by SUSA to gobble up the money.

    All those who commented on education and living and etc are totally irrelevant comments for this discussion.

  2. Indians Only

    Stupid “Freedom1958” “…..Working for a wage that is many times greater than they could earn….” Do you know that, (1) Medicines and Medical Treatment even at Worldclass level in india is “Many many many times” cheaper than U.S.? (2) Food, housing and everything is far less costly than US. You do not even know what and how to compare. You belong to a lot where 98% people do not even know what the world is like beyond their own town or state. First educate yourslef.

  3. Indian professionals contribute more than $1 billion each year to the US
    social security system through taxes, and get no benefits from it if
    they were to return back to India.

    No Benefit? They are working for a wage that is many times greater than they could earn working in their home country. Is that not a benefit?
    They are getting access to knowledge and resources that are very difficult to come by in India. Is that not a benefit?
    If they impress the right people, they might get sponsored for a green card. Isn’t even a chance at a green card a benefit?
    By working in the USA, they become much more attractive to the opposite sex in their own country. Is that not a benefit?
    Why complain about paying taxes to a country that has given you so many benefits at the expense of its own citizens?

    • Ritesh Tiwari

      Thats called compensation and not benefit. And if we get more, we spend more too. Person cleaning ur house charges Rs 7000 for 2 hours. India, you would be paying this a month. So salary comparable. I think this is a right move.

    • mad fellow… social security is additional payment done in addition to federal and state taxes. it is like your PF in india. they are asking to return their PF money as is it their savings.
      dont talk rubbish like more salary than india. the qualification and job output gives them that kind of salary. if you are not qualified or not getting such salary, dont envy others. not only indians get these, other country people also do get paid

      • Well, if you don’t like paying the tax, you can simply stay in India. The only people here who will miss you are the companies that exploit you.

        • No dude, Indian professionals come to US as US does not have enough skilled people from there, they get ones like you. They help AMERICAN COMPANIES who otherwise will go bankrupt, and make America a failed state. So feel blessed that Indians are in the US. Moreover, international treaties allow Indian workers to work in the US, and US companies to sell in the India. For every worker denied, India can kick out one American company, then you will come crying to India.

          Getting the social security back is matter of years, they will get it back through the efforts of Indian government. Also, people like you are called c-h-u-t-i-a. Google it, but I think people already save your number in that name.

        • No dude, Indian professionals come to US as US does not have enough skilled people from there, they get ones like you. They help AMERICAN COMPANIES who otherwise will go bankrupt, and make America a failed state. So feel blessed that Indians are in the US. Moreover, international treaties allow Indian workers to work in the US, and US companies to sell in the India. For every worker denied, India can kick out one American company, then you will come crying to India.

          Getting the social security back is matter of years, they will get it back through the efforts of Indian government.

        • No dude, Indian professionals come to US as US does not have enough skilled people from there, they get ones like you. They help AMERICAN COMPANIES who otherwise will go bankrupt, and make America a failed state. So feel blessed that Indians and others are in the US. Moreover, international treaties allow Indian workers to work in the US, and US companies to sell in the India. For every worker denied, India can k!ck out one American company, then you will start chestbeating like women.

          Getting the social security back is matter of years, they will get it back through the efforts of Indian government.

          • Yeah, you’re an IT heavyweight, alright!
            You replied to this post 3 times!
            BTW: American companies might not like getting out of India, but America can get along just fine without you.

          • Nah..those are the day dreams. You clearly have not been to any of the big/small companies of US. 70% workforce is Indian/Chinese. Whom do you think are running Google/MSFT/Amazon/Facebook/Apple/etc? Behind the veil of ‘white leadership’, legions of engineers/workers/suppliers are from India/China. You just keep smoking the legal cannabis, go to the bar and brag that you are somehow superior.

            And no, I am not IT guy. I’m a Consultant advising world governments/corporates about various socio-economic investments. Regarding the three comments, I kept modifying my comments as the message said “your comment awaiting moderation”.

          • I’m afraid you’re the one with the superiority complex. If Indians were so great, they would be able to build world class software on their own soil with their own resources. They might even be able to provide running water and toilets for their own people.
            Face it. There is only one reason you are in America at all. You are cheap.

          • We are getting there, only 68 years after Britishers took world’s richest country and looted it till we had the chronic poverty. Getting there, as I said..watch out!

          • You already had the chronic poverty when the Britishers got there, and the only reason you have anything of value to sell today is because of the schools set up by the British.

          • ROFLMAO!!! You made my day. And this also shows you know nothing about nothing about nothing. Britishers came to India with wine and women speaking in chaste Hindi begging for trade permissions and licences. Even America was discovered because European were looking for a sea trade route to India. India’s share of world’s GDP was 23% when Britishers arrived in India, and when they left it was less than 3%. Make no mistakes, you’d be speaking in every dialect of Hindi (and other Indian languages) by now if Britishers had not come and looted India for 150 years.

            The schools that Britishers built were later, when they needed cheaper staff for their services in a hot/humid country. Similarly, the railroads they built were to take the loot and raw materials to the ports from our hinterland. Our needs were incidental.

          • And BTW, Britishers destroyed our universities and industries, and took our raw material to export them back as finished products. All of Britain’s rise were funded by Indian’s torture/maiming/massacre/religious-racial persecution for 150 years.

          • 80% of Americans are nothing beyond ordinary High School (which they are laughably called High School GRADUATE) that is why immigrants are acutally brought rather than they walking in across the border to America. Do not bash, discriminate, abuse, exploit, attack and even kill Indians who have been given green cards and Citizenships. Indians are boon to America. If America do not want immigrants why not STOP immigration and see how far it can go. If US has population as much as India, it will go bankrupt next day in spite of 3 times larger land and resources and just 25% of population that of India.

          • Funny you would bring up education level when 28% of the people in your own country are illiterate.
            Let’s do a little math:
            The current population of India is 1,345,703,927.
            Multiplying that number by .28 gives you around 376,797,100 people who can’t read or write.
            The current population of the United States is 325,473,605.
            That means there are more illiterate people in India than there are PEOPLE in the United States.
            Still want to brag about how smart Indians are?
            America is about to try an experiment with H-1b workers. Trump is working to force employers to pay H-1b workers at the same or higher level than their American counterparts.
            Currently, 90% of H-1b workers make substantially less than the Americans they are displacing.
            If you are right about Indian’s superior skills, it will be a boon for your people and your country, but the demand for H-1b workers is already dropping based on the threat of a price hike.
            My thinking is that, by the time H-1b workers achieve cost parity with American workers, there will be very little demand for H-1b workers.

    • there is no doubt that Indians get benefited a lot in US and they also serve US companies well , but not all get resident permits or citizenship. Those who return have to cope up with high cost of living , negligible support from govt and low salaries. For the social security benefits which they will never enjoy, taxes collected for SS may be returned back to them as compensation.
      Why US companies calling Indians, there are economic reasons or shortage of skilled labor issues, that should not be linked to social security.

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