Interesting discussion about the role of tax."The Price of Democracy: The Revolutionary Power of Taxation in American History" between @heatherrichardson.bsky.social and @vanessawilliamson.bsky.socialTaxation is American and America is taxation!heathercoxrichardson.substack.com/p/american-c…
— John Richardson (@expatriationlaw.bsky.social) 2026-04-20T01:43:12.212Z
F. Scott Fitzgerald of “The Great Gatsby” fame once wrote:
“Let me tell you about the very rich. They are different from you and me.”
For many years various “Americans Abroad” groups have been trying to have a rational conversation with American politicians and the general public about ending citizenship taxation. The discussions are very difficult. The difficulty is largely rooted in how Americans view taxation. I guess I could say:
“Let me tell you about how Americans view taxation. They are different from you and me.”
It has become painfully clear that America is about taxation and taxation is about America.
And speaking of the role that taxation plays and has played in American history and democracy, it’s worth listening to this fascinating conversation between Heather Cox Richardson (no relation) author of the substack “Letters From An American” and Vanessa Williamson of the Brookings Institution.
Their discussion is about Ms. Williamson’s new book: “The Price of Democracy: The Revolutionary Power of Taxation in American History“.
Incidentally, Professor Heather Richardson is leading the opposition to the Trump administration. Whether you are to the left, to the right or an independent, I recommend her Substack. She does an amazing job of putting current events in historical perspective.
Professor Heather Richardson’s videos and podcasts, along with her writings are absolutely fantastic!
Our feelings, thoughts on equity, justice, form legal policy which can get written into law. Rule of law has been the best method of self governance. She helps readers, listeners, and viewers, understand some of the complexities and reasons for the degradation of rule of law, what it means for democracy, and how that translates into economics.
This post makes a good point about how I think an incremental approach would be more likely to pass Congress than full-on RBT. As I mentioned in another recent post here on TIBS, it’s not lower- or middle-class Americans expatriating that the public objects to nor are accidental Americans (although both groups have been caught up in the policies enacted that are designed to catch wealthy Americans leaving the US not because they culturally want to live somewhere else but rather move for financial convenience).
One such incremental approach would be to change the most egregious and/or disparately impacting aspects of the current US tax code but keep the fundamental premise of CBT. For example expand the types (but not the amount other than indexing for inflation) of foreign income that can be excluded under the FEIE, allow American expats to use the currency of their country of residence as the functional currency for local transactions (addressing the “phantom income” that often arises with loan repayment for example), allow non-income foreign taxes to be deducted under the same rules as state and local taxes for US residents, raise the threshold where foreign bank accounts need to be reported, etc. Also make it where if your IRS liability is zeroed out by the expanded FEIE you don’t have to actually file a return (with the possible exception if you’re in the US for more than a certain number of days the following year, when the disparate impact argument wouldn’t apply since you could visit a US tax professional in the US during your stay).
There is also the debate on whether the US should stick to a “country-neutral” approach where expats would get the same relief regardless of where in the world they live, or if “whitelisting” countries with similar or higher (overall, not just income) tax burdens would be appropriate where expats living in such countries would be presumed not to have moved for tax reasons (and would not have to file while maintaining a full tax residence* in such a country) but expats living in “tax havens” would have to continue to file (and pay if applicable) to the IRS.
*If I were writing such a law to address expat tax issues, one universal qualifier I would have for any relief (other than the “disparate impact” issues or the same foreign tax credits that US residents can claim on foreign income) would be that you have to be a “full tax resident” of another country, meaning that you have the same liability for all taxes that any ordinary resident of the country would have with no preferential treatment by virtue of your local alien or US citizenship status. (This would avoid “have your cake and eat it too” scenarios like some US citizen digital nomads currently enjoy where they qualify for the FEIE based on physical presence outside the US but aren’t full tax residents of any country.)
One other item of relief I’d include in such a law would be to allow a “provisional renunciation” where minors and the incapacitated who can’t renounce, who have non-US-taxpayer parents/guardians/caregivers and are dual citizens of another country, can allow them to be treated as non-US-citizens for tax purposes as long as they don’t and haven’t ever claimed any benefits from the US government. (In the case of minor children, once they became adults they’d have the choice to either take on the applicable US tax responsibilities or formally relinquish their US citizenship, which would also apply in the case of a military draft should conscription be reinstated.)
@Kelly
Both the:
1. Holding bill of 2018
https://citizenshipsolutions.ca/2018/12/20/as-2018-draws-to-a-close-congressman-holding-introduces-fair-taxation-for-americans-abroad-act/
2. LaHood bill of 2024
https://seatnow.org/2024/12/22/seats-response-to-rep-lahoods-request-for-feedback/
propose many of the ideas you suggest.
Both bills retain citizenship taxation as a general rule but provide “carveouts” for certain people in certain circumstances.
My personal view is that most of what is proposed in either the Holding bill or the LaHood bill can be achieved by regulation as described here:
https://citizenshipsolutions.ca/2021/01/27/a-simple-regulatory-fix-for-the-problem-of-us-citizenship-taxation/