Americans Abroad by the Numbers
Why do Americans live abroad, how many of them are there, how many of them pay U.S. taxes, and why does it matter?
All these questions are important for the U.S. Congress as it considers whether to end double taxation and other discrimination against Americans living abroad. If expats leave the country to evade taxes, they won’t find much sympathy in Congress, to say the least. If there are only a few million expats, the tax impact of any change will be smaller than if there were tens of millions of them. If hardly any of them owe U.S. taxes, the impact of any changes will be smaller than if millions of them do.
The answer to the first question is easy: life! Some are born and raised in the United States, but move overseas to study, or to work, to retire, or for love. Some are born in the United States as children and leave the country before they can even walk or read, but they are still U.S. citizens because they were born on U.S. soil.
The answer to the second question is that no one really knows, but estimates vary from at least 5 million to as many as 9 million.
The third question goes to the absurdity of the current U.S. tax system. Of the 5-9 millions who live abroad, 77% have adjusted gross income below $100,000–which is well below the Internal Revenue Service’s $126,500 foreign earned income exclusion, and 62% reported zero U.S. tax liability from 2016-2021. These are the IRS’s own figures.
For millions of Americans living abroad, the dream of exploring new cultures and opportunities is often overshadowed by a complex and frustrating tax burden. Unlike most countries, the United States taxes its citizens on their worldwide income, regardless of where they live. This system of citizenship-based taxation, combined with tax obligations in their host countries, leads to double taxation for many American expats. This issue not only creates financial hardship but also discourages Americans from living and working abroad, hindering global engagement and cultural exchange.
Our one-pager on Americans Abroad by the Numbers lists 10 key figures on U.S. citizens abroad.
As the one-pager and chart here highlight, a significant portion of Americans abroad are middle-income earners with modest savings. Despite this, they face hefty costs to comply with U.S. tax regulations, often paying thousands of dollars to accountants for assistance, more than Americans living in the United States would usually need to pay. The burden of double taxation and reporting disproportionately affects these people, creating unnecessary financial strain and complexity.
The solution is in hand: The United States should move to the type of residency-based taxation system like that in use in every other free country in the world (the exception being Eritrea) and only tax U.S. citizens if they live in the United States or have U.S.-source income.
Tax Fairness for Americans Abroad implores the next Congress to heed President-elect Donald Trump’s campaign pledge to end double taxation for Americans abroad as a matter of priority. We are already actively engaging with Congress to work out how to make it happen and look forward to working with Congress to this end.
