What is a tax invader?

There are three choices:

1. Residence-based taxation. Normal, sensible countries do this. The USA and Eritrea do not.

2. Citizenship-based taxation(CBT) is needed to stop rich Americans leaving the country to avoid paying taxes. Countries where most US expats live have higher taxes than the USA so nobody moves from the US to the UK to pay less taxes. If this is the intent of CBT, production of a UK tax return is sufficient.

3. CBT is so US expats actually pay tax to the USA. Eritrea takes an honest approach and asks for 2% of income. The US relies on random mismatches of tax policy with the host country, gotcha regulations like PFIC and massive fines for insignificant paperwork errors or omissions.

Prior to the Obama administration, option 2 was the de facto policy but now we seem to be moving to option 3. If the US really wants to tax expats, at least they could do it in an honest and straightforward way.

In light of Weller's post, I've recently thought of some ideas that Congress might consider as an intermediate ground between keeping the current rules and completely abolishing CBT (if the latter is too unpopular among the general U.S. population):

1. Expand the FEIE to allow ANY foreign-sourced income to be excluded, up to the same amount that applies to earned income right now (this would solve the problem of for example USCs who receive disability benefits that are tax-free in the other country getting them taxed by the U.S. government).

2. Allow capital gains/losses, etc. to be reported in the local currency if the USC is a resident of the country where the property is located (the conversion to USD would just be a mathematical one, converting the net gain/loss in the local currency rather than taking the gain/loss in USD; the taxpayer would be required to be consistent though so as not to pick the more favorable currency at the time).

3. Introduce the "same country exemption" for FATCA and exempt accounts located in the same country where the USC resides from FBAR.

4. Raise the filing threshold for those living abroad so that those who have no tax liability due to the new FIE in #1 do not have to file a return (if FTCs are taken due to higher income then a return could still be required for the purpose of keeping track of which tax credits have been taken and which have not). This would help solve much of the frustration with expats whose issue is more with the process rather than the outcome (being required to fill a return when the IRS will not get any money from them).

5. Write into law that the State Department may not charge an exorbitant fee to renounce or relinquish U.S. citizenship.

6. Allow "accidental Americans" who have never claimed U.S. government benefits, voted in a U.S. election, or lived/worked in the U.S. as an adult to renounce without being rendered a "covered expatriate" or being required to back-file tax returns.

1. American citizen resident in the U.S.
2. American citizen resident in the U.K. short term (less than 10 years)
3. American citizen resident in the U.K. long term (more than 10 years)
4. US/UK dual citizen resident in the U.K. long term (more than 10 years)
5. UK/US dual citizen resident in the U.S. long term (more than 10 years)
6. British citizen (past dual US/UK) resident in the U.K.

A. Most assets (pensions, investments) in the U.S.
B. Most assets (pensions, investments) in the U.K.

Question #1:
What are the chances of 1A, 2A, or 5A agreeing on US tax policy (CBT) with 4B or 6B?

NOT considered: The population of the UK is 64 million. The population of the US is 320 million.
Considered: The number of UK citizens living abroad is estimated to be between 4.5 and 5.5 million.
Considered: The number of US citizens living abroad is estimated to be between 5.5 and 8.5 million.
Considered: The number of UK citizens renouncing UK citizenship is on average roughly 550 per year. (The highest recorded year was 2002 with 1140.)
Considered: The number of US citizens renouncing US citizenship has increased yearly, and is now 4,300 (highest year was 2015 – number given is known to be low).

Considered:
For the UK: 5 million expats, 700 per year renounce.
For the US: 7 million expats, 4,300 per year renounce.

Considering, as a percentage of expats who renounce citizenship per year, a US citizen expat is 5 times more likely to renounce citizenship than a UK citizen expat.

Question #2:
Is the higher likelihood of a US citizen renouncing citizenship of any consequence?  Is the increase above normal, (problems with dual citizenship, for example), related to US tax policy (CBT)? Should it be interpreted that US tax policy (CBT) is of significance, or is the tax policy a contributing factor, and if so, should it be disregarded as insignificant?