Why does the US tax people based on citizenship?

I renounced my citizenship in 2002, just after Dubya shat out the USA Patriot Act - the first piece of overtly fascist and unconstitutional US legislation. And it was NOT cheap back then.

The US taxes you if you're an American living and earning money abroad, even if you don't live in the US and you don't use any US public service. And if you want off the hamster will, the US makes you pay one last time for the privilege.

Why? Because it's a mafia state, when it's not a fascist one too.

American living abroad here. I have lived and worked here for 5 years. Not once have I paid taxes to the USA. I have to file my taxes every year, but since my wife and I do not make more than $260,000 combined, we do not have to pay taxes to the US government. There are even more tax credits we get by living in a country with a tax treaty with the USA (foreign tax credit).

Why don’t Americans living abroad renounce their citizenship? Many reasons. First, most Americans living abroad probably have family in the USA. Giving up their citizenship would mean having a more difficult time crossing borders into the USA. They would also be giving up the ability to move back to the US if they wanted to. They would give up their ability to vote in US elections, which may be important to them if they have family there. Additionally, until recently, it cost like $2500 to renounce an American citizenship. I think it now costs like $800. It also takes months to get approval from the state department.

So if you don’t make a whole lot of money, why would you want to give up citizenship? Renouncing your citizenship really only has negatives unless you make a lot of money.

Also, to address why they don’t consider naturalization. Many probably do consider it. But it takes a lot of time, effort and money to become naturalized in most countries. Right now I’ve been here for 5 years and I will only become eligible for naturalization at the end of this year. After applying, it will probably take another year, lots of paperwork and money to become a citizen.

I'm gonna ask as a Brit, but how?

Say you're an American. You move to the UK, get british citizenship, a job, bank account etc.

How do the American IRS know? And how do they even enforce it?

You have reporting requirements called FACTA and banks have reporting requirements for US customers. It's annoying to say the least.

They don't, you're just obligated to report your global income as a US citizen. This isn't a big deal if you plan to never go back to the US to live there, but if you do (or aren't sure), this becomes a major issue because all those years you didn't file your taxes with the IRS makes you effectively a tax cheat whether or not you owe any taxes at all.

If you pay income tax to another foreign government (that has a tax treaty with the USA) and you earn below the threshold for an individual or a household, then you don't pay taxes at all. In order for the IRS to determine this they need to know how much you made. I don't know what the actual threshold is for individuals, but in the 5 years that I've been living outside of the US, I haven't paid a single cent in US income tax. It's a pain in the ass, but whatever, you get used to it.

The other person responded with the why, but not the how.

Realistically unless you step foot on US soil, or the country you moved to has existing treaty deals to deal with it like Canada does, they won't be able to do anything about it. It's unlikely the US would try to extradite you, and even more unlikely the country would cooperate with it.

Being said, countries that do have treaties about it could simply freeze your assets or wages prior to you receiving them, and pay your delinquency off that way.