General Discussion
In reply to the discussion: We should tax wealth apart from income...and put a backstop to prevent capital flight [View all]Spider Jerusalem
(21,786 posts)Americans, almost uniquely in the world, are taxed on the basis of citizenship rather than residency. Giving up American citizenship is very hard. American citizens who renounce their citizenship, and who have tax liability in excess of $145K per annum for the previous five years, and who have assets in excess of $2 million, are subject to an exit tax. All of their worldwide assets are treated as if sold on the day before expatriation and taxed, with an exemption on the first $627K.
And honestly, the US system of taxing on the basis of citizenship and not residency is already nonsensical; why should an American citizen who lives and works in the UK or Japan or Switzerland be liable for any US income taxes at all? (There are over five million Americans living abroad; by population, "abroad" would be the 22nd most populous US state. Relatively few of those five million are rich.)