Why are the US and Eritrea the only countries in the world taxing expats living abroad? Although 39.6% is the top federal tax rate that expat Americans have to pay, I am still genuinely curious.<p>I knew about this from an American friend who has been living abroad for many years. But while reading http://www.zerohedge.com/news/2014-09-17/appalling-practice-used-only-two-nations-which-us-one I started getting seriously curious of why the US (and Eritrea) has this policy and the rest of the world does not.
I can tell you the justifications I've heard. They include<p>- it's a sort of insurance, in case things go sour and the US needs to rescue its citizens from a war zone / plague / etc.<p>- it pays for overseas embassy operations for citizens living overseas, including registration of overseas births and renewal of a passport while overseas<p>- it's the price to pay for having one of the most widely accepted passports<p>- Americans living overseas were educated in the US, by the US taxpayers, so they shouldn't have the right to steal all that free education and live somewhere else.<p>- Paying taxes is quite simply an obligation of citizenship.<p>None of these (except the last) make sense to me, and feel instead like post-hoc justification. For example, if the first couple were true then we would also be charging overseas tourists for their trips abroad, should they need to be rescued.<p>For another example, if you are born in the UK, though with a US mother, then by US law you are a US citizen, and consequently are subject to US taxes - even if you have never stepped foot in the US. Yet the UK passport is more widely accepted (visa-free) than the US passport, and the US paid for none of your education.<p>(Should someone in that not-that-hypothetical case want to get rid of US citizenship, the renunciation fee is currently $2350, and likely subject to an exit tax unless that person had been reporting/paying taxes the previous 5 years.)