Quote: (06-23-2013 08:53 AM)Icepasian Wrote:
IIRC, the USA also taxes based upon citizenship, not residency like most nations do, so you can be double taxed abroad even if you never intend to return. The IRS has been kind enough to realize the problems inherent with double taxation abroad so they have a form where you can write off up to ca. $100,000 of overseas income if you reside in a foreign country. But if you earn anything above that amount, you will be taxed by both the IRS and the country where you reside. This can be quite a large problem if you live in a very high tax nation like those in Western Europe where making over $100k per year could lead to paying over 100% of your income above the limit in combined US/European taxes.
TL;DR The US government thinks that all Americans need to pay "their rightful share", even if they have no intention of returning to the USA.
That is why we have tax treaties.