This is not quite so clear cut. Yes, as an American working and living abroad you've got the privelege of forever dealing with the IRS/FBAR, some banks who simply won't talk to you because you're American, and probably an expensive tax professional to sort it all out for you so you avoid the devastating penalties for screwing it up.

But, most people won't actually be paying anything to the US government. I'm strongly opposed to taxation by citizenship, but let's not give the impression that everyone who lives abroad is paying twice.

There are few countries where the taxes are lower than the US Federal ones. Thus though you will have to file a tax return, in most cases you won't owe any additional taxes.

What makes the US more expensive is all the non-tax fees that are included in those foreign countries' taxes (e.g. medical costs). So you still save.

Perspective: not a US citizen through currently living in California.

There are almost no countries in the world that milk their citizens that way.

Two exceptions I know of:

    - USistan
    - Eritrea

That is false for US citizens; the US taxes you on your worldwide income, even if you don't live or work in the US.

Soooo if your US passport expires you no longer have this tax?

I would have thought it was based on US citizenship not travelling on a US passport.

Yes it is honestly. The US is the only G7 county (and one of the only countries worldwide) to engage in extraterritorial taxation.

It is absurd. If you are gaining from services in that country, you should pay taxes to that country. If you have moved abroad and aren't gaining from any services if that country, you should not. Because you are effectively not a member of that community anymore and should be contributing your taxes to another society. To even have to handle the double taxation accounting is ridiculous. It's that simple.

Does someone gain benefits of being an American even when not living in America? Potentially, but many of those benefits could be connected to more targeted taxes than simply worldwide income tax.

This is clearly not about justice and is instead about the long arm of the IRS seeking their pound of flesh anywhere they can get it.

I know Americans who left the US 40 years ago and have lived and become fully integrated citizens of other countries. Yet simply to retain the right to return the US at some point, they must pay taxes every year in the middle? And trying to give up their citizenship isn't that easy either.

If we want to prevent tax havens, I'm totally fine with that. Force sensible global tax regimes and prevent countries from being havens. But the solution isn't extraterritorial taxation.

Right... so these two points might be related, as the people renouncing might be the people who do owe additional tax. Personally, I would feel a bit put out if I'd permanently moved to another country and had Uncle Sam looking to take a piece of my income.

Except, unless I'm mistaken, US citizens don't even have that freedom. Unless you renounce your citizenship, you pay US taxes wherever you live, unless there's a tax treaty of some kind in place between the US and your country of residence.

Thank you for this comment, I thought I was the only one on HN with that opinion.

As long as you maintain a passport and citizenship, how do they not have such a right?

That’s the price you pay to have the most powerful country in the world as a destination to which you can always retreat.

Yes on citizens, but not true about green card holders.

Well to be fair, once you move back in you will already start paying taxes again. This "benefit" is already paid for by you paing taxes when you effectively become resident again after moving inside the country again. Exactly like it works for any other country right now. This is questionable as a benefit while you're not living there.

> You also get the benefits of the US legal system if you maintain ties, investments, etc.

You get those benefits even if you just do some business in US as a foreigner. By this logic, should US also tax worldwide income of anyone who does any business in it and relies somehow on its legal system? Cmon this is a huge stretch. Also if you maintain ties, investments, this means that you are already helping the country by either supporting business or outright keeping your capital in the country and helping it by investing in it. You are ALREADY helping the country. And by this logic the country is supposed to tax you further to what puniush you for helping it?

Most is an understatement. Last I checked, it was all countries, except the US and the two bastions of freedom that are Eritrea and the Soviet Union (when it existed).

> The US doesn’t have such a system, but the way it works most expats won’t end up paying any taxes if they leave the states. Though they’ll still need to file a return.

Won't end up paying any taxes on earned income you mean. For any other income, it's a damn nightmare.

Which is pretty expensive, and you still get taxed for ten years afterwards.

>Do you mean people who will in the future need to pay taxes, and expatriate in order to avoid future obligations?

Yes, I mean the latter. If you rack of legal debts (of any sort) as a citizen, IMO you should pay. Part of the naturalization process in most countries is a check to see that you're not some kind of criminal and that you've tied up all the financial loose ends in the country of your birth. My problem is that Congress assumes jurisdiction over your actions and finances if you were ever a citizen.

It used to be widely recognized in international law that the laws of a country only applied on the soil of that country and on ships traveling in international waters under that country's flag. If you traveled to a different country you were under the jurisdiction of that country's laws. So as a citizen of the US, if I moved to Germany, say, even though I was a US citizen I could do things that are illegal in the US as long as they're legal in Germany. And I couldn't do things that were illegal in Germany even if they're legal in the US.

This all seems like common sense.

But it's changed in recent decades, as countries are punishing citizens for things they do elsewhere, e.g. Swedes, who are breaking Swedish law if they patronize a prostitute even in another country where it's perfectly legal. I think this kind of overlapping jurisdiction is a terrible idea, but whatever.

The idea you fall under a country's law even if you become a citizen of another country and renounce the citizenship of your birth is a bridge too far. As far as I know most countries won't extradite a citizen (even a naturalized citizen) for that sort of thing.

The US government presumes to tax your (new) income for ten years after you've renounced your citizenship, even if you had no outstanding tax debt at the time of renunciation. There's also a one-time 40% tax on assets held in the US, which I find less objectionable but still pretty damn objectionable.

You realize that US citizens have global tax liability, even if they've never lived in the US, right? (Certain countries' taxes count as credit, and you get some exemption, but US persons are supposed to report all foreign assets and pay taxes.)

Also because the US government will not allow you to renounce your citizenship if you are doing so for tax reasons.

Only for the US (and Eritrea). Your country should not own you and make extra-territorial claims on your income or wealth due to an accident of birth. Recently, the US has also made it harder and more expensive to renounce citizenship. Even if you have paid all back-taxes owing (and paid a large fee), it will not agree to release you from bondage, if it thinks your motivation (thought crime) is to avoid excessive future extra-territorial taxes!