[felipe]

Your assumption on #2 is not correct. Americans living abroad get a tax credit (almost $100k currently), so in practice average-income US professionals living abroad are US tax-exempt. Above that, there are many rules designed to prevent double-taxation.

Also, US citizenship is not a "trap" in Eduardo's case. It was his choice to become an American citizen in the first place.

[hnwh]

We're exempt on tax on "Earned Income" up until a certain level (and yes, there is a highly technical definition for the type of income that qualifies for this). As one of the other commenters mentioned, we still have to pay full on Social Security, Medicare, Self-Employment taxes

[_delirium]

If you live in one of the 24 countries with a social-security totalization treaty (which is most of Europe, plus Japan and a few other countries), that's not true. I don't pay any U.S. payroll taxes as an American expatriate.