It could be beneficial to if working abroad because the United States is one of the only countries on the planet that taxes earned wages abroad while offering absolutely zero tangible benefits to those who do, perhaps besides the passport itself.
Given much of the free world depends on the US for defense, maybe it's not "zero tangible benefits"?
Yea, it's annoying, though. Under $130k a year you don't pay. So this is a 1%-er problem. And, you still deduct your foreign taxes and just pay the difference. I'm not saying that makes it ok, but you aren't double taxed, you're just taxes as tho you were back in the USA.
The rest of the world pays for US defense through investing in US treasuries, which they are moving away from for obvious reasons. The US isn’t providing defense for free, they are compensated for it by the world buying their debt at favorable yields considering the debt load (~120% of GDP as of this comment).
Your argument needs ‘public debt /held by foreigners/ as percent of gdp’, I think? Or rather ‘public debt /held by foreigners to whom US provides defense/ as percent of gdp’ Then you are down to Japan.
I don’t really understand the advantage of doing it this way vs having them pay directly.
Re debt loads - does the debt load actually materially affect default risk in this case? It’s not like US bonds are officially rated as high risk, at least. Debt to GDP is one thing but without a comparison to other bonds and their associated debt to GDP and a relationship inferred from that data it doesn’t really say anything in a vacuum. Why would it be done this way instead of just paying directly? As opposed to the more straightforward explanation of US bonds just having a favorable payout to risk ratio vs other options. It just smells like some kind of conspiratorial thinking and I’m not sure if it actually adds up.
Honestly asking by the way, I haven’t seen anyone spell out the theory and it just seems quite hand wavey to me.
I don't know why you got downvoted for just asking a question. I'd be curious too. In some countries it's much easy to become a citizen (give up your previous citizenship) than it is to get permanent residency permission (in which you're still technically a citizen of your previous country)
