Should Overseas Americans Be Required to Buy Their Freedom?

Snyder, Laura; Alpert, Karen; and Richardson, John, "Should Overseas Americans Be Required to Buy Their Freedom?" 172 Tax Notes Federal 223 (2021).

17 Pages Posted: 28 Jul 2021

See all articles by Laura Snyder

Laura Snyder

Taxpayer Advocacy Panel (TAP); Association of Americans Resident Overseas (AARO)

Karen Alpert

University of Queensland - Business School; Financial Research Network (FIRN)

John Richardson

Citizenship Solutions; Stop Extraterritorial American Taxation (SEAT)

Date Written: July 12, 2021

Abstract

The United States is the only developed country to practice a system of extraterritorial taxation that treats the tax residents of other countries as simultaneously subject to U.S. worldwide taxation based on citizenship. This extraterritorial tax system is a separate and more punitive tax system than that applied to U.S. residents and imposes unwarranted restrictions on the right of U.S. citizens to live where they choose. For these reasons, the taxation of nonresident citizens must end.

Among the impediments to ending extraterritorial taxation is the widespread assumption that any legislative solution must be revenue neutral. This assumption is, for the most part, unchallenged. This belief, however, leads to a trap from which there is no escape. Further, it misconstrues the problem as one of mere payment of tax rather than of fundamental immorality and injustice, and it demonstrates a misunderstanding of the purpose of taxation and of how the U.S. federal government is funded.

The U.S. extraterritorial tax system appears to have been conceived and continues to exist only to discourage Americans from living outside the United States — a human right — and to punish those who dare to do so.

It is imperative to challenge the belief that revenue neutrality is a condition for ending extraterritorial taxation. Not to do so is to doom efforts to move the United States to a more just tax system for all its citizens.

Keywords: Revenue Neutrality, Extraterritorial Taxation, Citizenship-Based Taxation, Residency-Based Taxation, Morality, Modern Monetary Theory, Department of Treasury, Internal Revenue Service, Citizenship, International Taxation, Human Rights, Taxpayer Bill of Rights

JEL Classification: E42, E50, H20, H24, H30, H31, H50, H60, H61, H62, K33, K34

Suggested Citation

Snyder, Laura and Alpert, Karen and Richardson, John, Should Overseas Americans Be Required to Buy Their Freedom? (July 12, 2021). Snyder, Laura; Alpert, Karen; and Richardson, John, "Should Overseas Americans Be Required to Buy Their Freedom?" 172 Tax Notes Federal 223 (2021)., Available at SSRN: https://ssrn.com/abstract=3893051

Laura Snyder (Contact Author)

Taxpayer Advocacy Panel (TAP)

1111 Constitution Avenue
Washington, DC 20224
United States

Association of Americans Resident Overseas (AARO) ( email )

4 rue de Chevreuse
Paris, 75006
France

Karen Alpert

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

John Richardson

Citizenship Solutions ( email )

Box 19602, Manulife P.O.
55 Bloor St. W.
Toronto, Ontario M4W 3T9
Canada
6478607737 (Phone)

HOME PAGE: http://www.citizenshipsolutions.ca

Stop Extraterritorial American Taxation (SEAT) ( email )

Box 19602, Manulife P.O.
55 Bloor St. W.
Toronto, Ontario M4W 3T9
Canada

HOME PAGE: http://www.SEATNow.org

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