The US is the only developed country to tax citizens living permanently overseas on their worldwide income. This rule was created at a time when the income tax applied only to the rich and when some of the rich moved overseas to avoid the draft. We do not have a draft any more, the income tax applies to the middle class, and many more US citizens live permanently overseas for non-tax reasons. In a globalized world, citizenship-based taxation is an anachronism which should be abandoned.
Taxation-Federal Income | Taxation-Transnational | Tax Law
Date of this Version
Reuven S. Avi-Yonah, "The Case against Taxing Citizens" (March 2010). University of Michigan Program in Law and Economics. Working Paper 12.