TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, November 10, 2013

Kirsch: The Tax Treatment of Citizens Abroad

Florida Tax ReviewMichael S. Kirsch (Notre Dame), Revisiting the Tax Treatment of Citizens Abroad: Reconciling Principle and Practice, 14 Fla. Tax Rev. ___ (2014):

In an increasingly mobile world, the taxation of citizens living abroad has taken on increased importance. Recent international administrative developments — most notably, the weakening of foreign bank secrecy and expansion of global information sharing norms — have further raised the profile of this issue. While U.S. law traditionally has taxed U.S. citizens living abroad in the same general manner as citizens living in the United States, a number of scholars have proposed abandoning the use of citizenship as a jurisdictional basis to tax. In its place, they would apply residence-based principles — i.e., exercising full taxing rights over U.S. citizens only if the citizens reside in the United States. Citizens residing outside the United States would be taxed in the same limited manner as non-citizens residing outside the United States.

This Article examines the impact of the recent international administrative developments on proposals to eliminate citizenship-based taxation and replace it with residence-based taxation. It also discusses a number of substantive concerns with the residence-based taxation proposals. While the Article concludes that the United States should retain its citizenship-based taxation regime, it acknowledges that a number of practical steps could be taken to ameliorate unnecessary burdens faced by overseas citizens.

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Kirsch's fallacious logic for justifying the taxation of people (expats) who consume NO US public goods or services and have ZERO congressmen or senators to represent their interests is exactly why so many Americans abroad are bitter with the US and renouncing their citizenships.

America's founders did it in 1776, todays expats are doing it now.

Posted by: FromTheWilderness | Nov 12, 2013 3:12:48 AM

Kirsch's paper "Revisiting the Tax Treatment of Citizens Abroad: Reconciling Principle and Practice" is a deeply flawed, skewed, incomplete and shallow analysis of the issue it attempts to address. The consequences of the implementation of the short-sighted policies promoted by this author will be catastrophic for the US and the global economy.

Posted by: KingOfTheRoad | Nov 12, 2013 5:05:34 AM