[edanm]

(not a lawyer or accountant, but know a bit about this)

That depends on the country. Some (I imagine most?) countries have deals with each other when it comes to taxation, to avoid double taxation.

So if you're earning a salary in, say, Israel, then you only have to pay US taxes on money that hasn't already been income-taxed in Israel. Therefore, whether you're paying more taxes than locals depends on whether the tax rate in the country is higher or lower than in the US. If it's higher, then you end up not having to pay anything extra.

That said, these things get tricky and there are lots of individual wrinkles. E.g. freelancers typically have to pay taxes either way here, afaik. Then again, those taxes aren't doing nothing - they're paying for you to have a US social safety net of some sort.

[MrPowers]

Most countries follow territorial / residence based taxation. People that live in the country are taxed in that country. An Italian that lives in Italy pays tax to Italy. An Italian that lives in the US, pays tax to the US.

A couple of countries have worldwide / citizen taxation (i.e. the US). A US citizen that lives in Singapore will pay tax to both Singapore and the US. They pay tax to Singapore and can claim a tax credit on their US tax return. They can also claim the foreign earned income exclusion deduction.

[unishark]

> A couple of countries have worldwide / citizen taxation (i.e. the US). A US citizen that lives in Singapore will pay tax to both Singapore and the US. They pay tax to Singapore and can claim a tax credit on their US tax return. They can also claim the foreign earned income exclusion deduction.

So it ends up working out like residence-based taxation for most people anyway, but with more steps? Except I guess if the country has a lower tax rate than the US, then you'd need to pay the difference?