THE TRANSATLANTIC MAGAZINE
THE TRANSATLANTIC MAGAZINE
American Citizens Abroad (ACA) and other organizations have long focused on how RBT can benefit the individual US citizens living and working overseas, however its impact is much more far reaching. RBT plays a role in advancing US economic growth and national security interests by supporting US citizens working in foreign countries. As essential "boots on the ground," Americans abroad expand trade opportunities and secure markets for domestic businesses. By removing the financial barriers of double taxation, RBT ensures that US talent remains competitive in these critical foreign positions. These aspects of a RBT system, while widely understood, are not often captured in discussions and are not easily quantifiable when analyzing the costs and benefits of the reform.
ACA has always maintained that US citizens living and working overseas are key to creating economic opportunities that benefit all US citizens, both those in the United States and in foreign locations. Whether it be a small one-person consultancy or a team of corporate leadership, who better to create US business opportunities, open new markets, and advance US interests than its own citizens.
However, Americans are often at a disadvantage when competing for jobs located oversees. When applying for a position, an individual must either accept the reality of double taxation, paying both US income taxes and income taxes of the nation in which they reside, on their foreign earned income, or negotiate for "tax equalization" with their future employer (where the employer bares the cost of the double taxation penalty) – something that no citizen of any other developed country must ask for. As a result, both Americans and the United States are at an inherent disadvantage in the global marketplace. Therefore, as Congress moves toward the introduction of RBT legislation, it is important that it be viewed as a tool for global competitiveness. This reform will put US citizens abroad on an equal tax footing with citizens of other industrialized nations working outside their home country and lift the economic burdens of citizenship-based taxation.
RBT should be viewed as an investment in much the same way that the United States views key international strategic programs. For example, the United States routinely deploys orders of magnitude more capital overseas through executive-branch tools explicitly designed to advance US economic and national security interests:
These programs are justified by the fact that they return interest income, fees and equity, create and support US jobs, ensure the selection of US firms as vendors and operators, facilitate placement of US senior management in key operational roles overseas, RBT should be evaluated through the same investment lens. RBT would represent a one-time structural reform, not an annual appropriation, delivering sustained economic and strategic returns without balance-sheet risk or new bureaucracy.
US citizens overseas often occupy senior roles in finance and capital markets, energy and infrastructure, advanced manufacturing and logistics, technology and supply-chain management.
These individuals function as commercial force multipliers -- driving US exports and services revenue. They also steer procurement towards US vendors and anchor supply chains to US firms rather than foreign competitors. Profits and capital gains are repatriated back to the United States along with the institutional knowledge, intel, and expertise these individuals gain from working overseas.
ACA members can provide transaction-level evidence of these effects.
"I work in cross-border energy and strategic supply-chain transactions. I have direct connectivity with the US Commerce department, EXIM, DFC and national-security stakeholders. I have seen specific cases where US tax friction reduced American participation abroad and by removing that friction it would have increased US deal flow and generated higher downstream US tax receipts through corporate profits, capital gains and domestic employment," said Ben Freeman, ACA member.
"Americans on foreign boards improve US access to those markets. The primary mechanism for generating powerful international ties is leveraging prior affiliations rooted in US institutions. Human capital that alleviates information asymmetries and fosters trust. The likelihood of two organizations forming a critical co-investment relationship increases directly with the number of prior education or employment affiliations shared by their employees. When RBT lifts the friction, allowing American professionals to join foreign boards, they import these US-centric affiliations, strengthening the relational links between the international firm and the US financial ecosystem." Louis Scott, ACA member, consultant working in the UK.
RBT will also help bolster US national security, a priority for both parties in Congress. Modern national security depends on resilient global supply chains, early access to scarce resources, and real-time commercial intelligence. US citizens living overseas are indispensable "boots on the ground" in this system.
Nearly 90% of Tungsten's global supply chain is controlled or processed by China. In a conflict scenario, Tungsten becomes an immediate strategic choke point. Securing alternative supply requires US citizens operating in Central Asia, Africa, and allied jurisdictions, and US.-aligned professionals structuring offtake, processing, and financing. This requires continuous US commercial engagement that cannot be substituted by foreign nationals without misaligned incentives.
Other critical areas where US presence overseas is decisive and in energy security (gas, infrastructure, grid assets), semiconductors and advanced manufacturing tooling and maritime logistics.
Citizenship-based taxation actively discourages US citizens from occupying these critical roles at precisely the moment when geopolitical competition demands the opposite. RBT empowers US citizens to deploy internationally and in these key economic areas and in strategic geographic regions throughout the world.
RBT represents:
RBT should be viewed as an important component to the economic and national security infrastructure for the United States. If the United States wants to empower its citizens to spread not only US values but to strengthen our economic footprint and ensure national security, then Congress needs to make RBT part of that formula. This is a priority for the Administration and the Congress, both Democrats and Republicans. Congress and the Administration should take a comprehensive approach to RBT and should consider the secondary benefits that perhaps cannot be quantified with numbers but are intrinsically understood.
All other industrialized nations tax based on where the income in earned, that is what RBT will do for its US citizens living and working overseas. It will put US citizens on equal footing with foreign nationals working to secure, in the interest of the US., markets and resources worldwide. US citizens are at a disadvantage under citizenship-based taxation (CBT), which limits their ability to help the United States with its important economic and strategic priorities and initiatives. The time has come for the United States to relieve its citizens from the onerous barriers and economic weight imposed by CBT and give its citizens the support and tax structure they need to succeed internationally. Congress and the Administration need to consider the overall benefits of RBT as a long-term investment in the United States' interests and in its citizens.
ACA acknowledges and thanks contributors Ben Freeman and Louis Scott.
[4] China's Tungsten Export Controls: Strategic Mineral Crisis
