The first tax expatriation rules were enacted in 1966. The rules were created because Congress instituted a flat 30% tax on U.S.-sourced investment income for nonresident alien individuals. At the time, the top graduated rate for individuals was 70%. Congress was concerned that high income individuals would move abroad and renounce their U.S. citizenship so that they could be taxed at a flat 30% rate on their U.S. investment income. The special expatriation rules required... Read more →