I suspect that the U.S. taxing its citizens abroad has a lot to do with it being the world's richest country and not wanting people (billionaires and such particularly) to be able to easily escape their tax burden by moving abroad.
It can be split into three families of spending:
- defense, which benefits you globally via Pax Americana, free trade routes etc. and should you require it, "Captain Phillips" style rescue.
- "socialism", in the form of benefits that everybody has to pay for and that you can receive if you trigger certain situations (retirement, unemployment, etc.). Most expatriated Americans probably already benefitted from free education which is included here.
- "generally making the country locally better" (justice, environment, etc.).
Of these, only the latter doesn't directly impact Americans abroad. The first benefits you wherever you are; foreign citizen somewhat benefit from Pax Americana but there is no guarantee it will continue, whilst US citizen are covered globally with much more certainty. The second is a form of compulsory insurance for life developments that will probably coincide with repatriation. But that's about 7% of the budget (rough back of the envelope).
The question is why don't other countries tax their citizen abroad? I think it is mainly because they can't afford to enforce it (good luck, Estonia, forcing JP Morgan to give you access to their New York client data). If they could, with any degree of certainty, they would in a heartbeat. France proposes to do it every 6 months.
This is, to put it mildly, a controversial claim.
- Most expatriated Americans probably already benefitted from free education which is included here.
When I point out the insanity of the law that denies free choice of public schools, its defenders usually try to justify it by saying schools are funded by local property tax rather than national income tax. Is this not the case?
Whether you consider that global relatively free trade is not beneficial to the rest of the world is up to you, but as a citizen of the rest of the world who did benefit I'm quite glad the US did not go isolationist after WWII.
Regarding schools, whether the taxpayer's money is used appropriately is another discussion, irrelevant here since Americans, through their elected representatives, chose to spent the money in this way.
Funding-wise, last year's budget spent $100bn and this year wants $117bn on the Federal end for "Education, Training, Employment and Social Services" (see link above) of which $69bn in 2015 is for Education (see: http://www.ed.gov/news/press-releases/obama-administration-2...).
The question is why don't other countries tax their citizen abroad?
I assumed that the general consensus was that it all balances out at the end of the day – countries don't tax their citizens abroad, but do tax noncitizen residents who have income in the country. Either approach isn't all that bad, but it's interesting to think about how it can realistically be handled where individuals can hold multiple citizenships. My partner is dual US/UK, and completing a US tax return when you haven't lived in the country in decades is expensive and time-consuming.
Tell that to the lybian, syrian, iraki, Salvadoran, etc... that have "benefited" from the "Pax" Americana
I wouldn't personally advocate that stance - I think it's problematic with respect to consent - but I can see that in the case of extremely high emigration rate the viewpoint might be very tempting.
- Social Security is collected on what I paid into the system while I was living/working in the US. Not a part of this
- Voting is a right - nothing to do with taxes
- My "consular services"? My passport renewed? I cost me $100 or something like that to get my passport renewed, and most of us never go anywhere near our "consular services" - I'm not even sure what they offer, except to business people over here via the Amer. Chamber of Commerce (which they pay an arm & a leg to join)
Wrong.
Your Social Security benefits are proportional to what you put in (usually), but you will receive more money than you put in and more money than you money earned over that time period, assuming a normal life expectancy.
The trope that you only get what you put in with SS and Medicare is false.
Your rights can only be secured if the Government can pay for them.
[1] http://travel.state.gov/content/passports/en/passports/infor...
Trust me, it is as close to nothing as nothing gets.
Also US is still the sole global superpower.
The US is the worlds #19th richest country as far as GDP (per capita) which makes the most sense as a measure of individuals and taxes.
I don't think it makes any sense given that lower GDP nations should be doing the same thing to extract money from the US economy on any of their citizens who make more than ~$20K (if their GDP were $14K) based on the same "logic".
When The US is happily paying fairly for its brain drain, it can complain. But either way as an expat I actively boycott US services and financial relationships for my own protection.
(edit- make it clear I mean per capita, and reference: https://www.cia.gov/library/publications/the-world-factbook/... )
Interestingly, the US relatively high tax compliance rates, compared to other large/industrialized countries [0]. Presuambly the wealth you refer to is what results in the absolute dollar amount of evasion being higher, despite the relatively low rate of evasion.
[0] http://blogs.reuters.com/david-cay-johnston/files/2011/12/GL...