Dear Dr. Yellen: Congratulations! You’re probably the next treasury secretary of the U.S. That’ll throw you into daunting policy cauldrons — from financing America’s massive deficits to managing China and taming the tax code. With so much in your inbox, we urge you not to forget about one large group of Americans: us.
We’re U.S. expats, and there are 9 million of us. If we were a state, we’d be the eleventh largest. And we’re suffering from a problem that you can fix.
We ended up abroad because we got a job in Canada, married someone in France or retired in New Zealand. For others among us, “abroad” is actually home, because we’re so-called “accidental Americans” — we were born in the U.S. but never lived there.
No matter how we ended up with U.S. passports, all of us are subject to American taxation, as well as annual bank and asset reporting requirements so onerous and complex that many experts don’t fully understand them. And that’s just the start of our troubles, as we’ve tried to explain before.
The U.S. is the only country in the world that practices citizenship-based taxation. All other nations tax individuals based on their residence. Okay, Eritrea also taxes its diaspora, but that’s not exactly the same thing.