For some Americans, a surprising aspect of the saga of Meghan Markle, also known as the Duchess of Sussex, was learning that, as a U.S. citizen living in the United Kingdom, the Duchess was obligated to pay U.S. income taxes on her worldwide income.[1] President Donald Trump has echoed concerns raised in this controversy about the United States’ worldwide income taxation of its citizens living abroad. In particular, during his 2024 presidential campaign, President Trump called for “ending the double taxation of overseas Americans.”[2]
I found myself drawn into this debate about the United States’ citizenship-based taxation by virtue of a 2011 article I had written in the Iowa Law Review.[3] In that article, I responded to criticism of the United States’ citizenship-based taxation and, in particular, defended the United States’ taxation of its overseas citizens on their respective worldwide incomes.[4] A key component of the then-prevailing critique held that the United States cannot in practice enforce its income tax against U.S. citizens living abroad.[5] In contrast, I argued for citizenship-based taxation on enforceability grounds, contending that citizenship is an administrable proxy for domicile. Like domicile, citizenship reflects permanent allegiance to the home nation. Many nations tax individuals residing abroad on their respective worldwide incomes based on such individuals’ continuing domiciles at home while they live overseas. U.S. taxation of its overseas citizens by virtue of U.S. citizenship is a more efficient way of obtaining similar results without engaging in the fact-intensive inquiries necessary to determine a taxpayer’s residence or domicile.
This analysis raises a question which, among others, I now address: why should an individual’s domicile (or residence) in a nation be the basis for taxing that individual’s worldwide income while she is living in another nation? The answer, I argue, is to be found in the notion of “fiscal citizenship,” an individual’s obligation to support the national political community of which she is a member, even if living outside the borders of that nation.