Part I – Pure Residency-based Taxation vs. Citizenship-based Taxation With A Carve Out
US @CitizenshipTax AKA #Extraterritorialtax is greater than the self-interest of any one person. It affects you in ways that may not be obvious now. It affects your neighbours. It affects the sovereignty of your country of residence. It affects the future value of US citizenship
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) June 3, 2021
This is a continuation of my post on May 29, 2021 titled “Toward A Definition Of Residence-based Taxation For Americans Abroad“.
In that post I noted that different persons/groups have different ideas of what is meant by residence-based taxation. That someone tells you that they support residence-based taxation does not tell you what they mean. There are different definitions of residence-based taxation. I strongly believe that people must embrace a definition of residence-based taxation that means that US citizens are NOT – because of their US citizenship – subject to the Internal Revenue Code. In other words, the goal should reflect the view that:
The United States should not be imposing taxation and should not be permitted to impose tax on the non-US source income received by people who are tax residents of other countries and do NOT reside in the United States!