Only the U.S. and Eritrea Tax Citizens Abroad

The freest country in the world shares a policy with a dictatorship.

Americans like to talk about being exceptional. The freest, the bravest, the smartest. These are vague claims, hard to prove or disprove. But there’s at least one way we are unambiguously exceptional. The United States is one of only two countries on Earth that taxes its citizens no matter where they live.

The other is Eritrea.

That’s the list.

If you’re an American citizen, moving abroad doesn’t cut the cord. You still have to file with the IRS every year. You still have to report your income, your bank accounts, your investments. Even if you owe nothing. Even if you’ve lived overseas for decades and pay full taxes in your new country.

There are exclusions and credits — you can usually avoid double taxation if you do it right. But you still have to do it. Miss a form? Ten thousand dollars. Forget a detail? Criminal liability. The only way to avoid it is to pay an exit tax while renouncing your citizenship.

Eritrea’s version is simpler. Two percent of your income, collected through embassies. If you don’t pay, they might withhold paperwork. Or harass your family. The U.N. has condemned it as extortion.

We don’t talk about it much. Probably because there’s no noble way to explain why we’re on a list with Eritrea.

And no one else.