Only for higher income individuals. We get a Foreign Tax Credit for taxes already paid where we live/work.
Looks like the limit last year was $120k. Only 17% of Americans make more than $100k/year. Only ~5million Americans living abroad, or 1.5% of the population.
I'm sure those numbers are correlated, but I'll bet its under a few hundred thousand of people who are burdened with the tax. Even then, the benefits also are pretty nice.
As someone who is burdened with several thousands in filing costs every year (not tax, I mean the cost of paying an accountant to deal with the filing, which is required for all US citizens), because I have a non-US business, please fill me in on the benefits.
Also more and more non-US banks won't take US citizens as customers because they don't want to deal with the US's FATCA requirements.
No other developed country has these sorts of requirements for non-resident citizens.
No, all Americans who make money abroad have to file taxes. Yes, there is the Credit and the Exclusion, which will often reduce your burden to often zero but still requires all the paperwork.
Try owning a stake in a foreign company (CFC) though, that's a nightmare with often unavoidable significant taxes.
Looks like the limit last year was $120k. Only 17% of Americans make more than $100k/year. Only ~5million Americans living abroad, or 1.5% of the population.
I'm sure those numbers are correlated, but I'll bet its under a few hundred thousand of people who are burdened with the tax. Even then, the benefits also are pretty nice.