Montano Cabezas


The United States is alone in its practice of taxing the worldwide income of not only U.S. residents, but also U.S. citizens. Such a practice, at least at first glance, presents serious equitable concerns for Americans who live abroad. The author notes that the government last discussed its reasons for using such a system in 1924, the year in which the Supreme Court affirmed the constitutional validity of citizenshipbased taxation in Cook v. Tait. In justifying its decision, the Supreme Court relied on the inherent benefits received by U.S. citizens and their property from the U.S. government, regardless of where the citizens made their home or where the citizens' property was located. Despite the Supreme Court's finding, the appropriateness of using citizenship as a jurisdiction to tax has been the subject of academic controversy. In addition, there is strong evidence that American citizens living abroad view citizenship-based taxation as unfair and unjustified. If citizenship taxation is to continue, then it would be helpful if Congress or the Executive Branch explained the reasons for its continued use to combat the perception of unfairness.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.