Reasons to tax non-resident citizens:

1. Many countries grant expats the right to vote. So you might argue "no representation without taxation!"
2. Citizens are entitled to consular assistance when abroad.
3. It prevents tax avoidance, in the form of high wealth citizens relocating to foreign tax havens.
4. It prevents unfair tax competition. If only residents are taxed then foreign governments can seek to lure high wealth individuals by offering tax breaks.
5. The potential for tax avoidance and tax competition limits the policy making freedom of governments when it comes to setting tax rates for high earners, and may create a race to the bottom that erodes the tax base in all nations, to the common detriment.

In Europe, whenever any party proposes to increase taxes on high earners opponents invariably argue that the policy would be counter-productive, because high wealth individuals would simply relocate abroad, which may lead to the policy producing little additional revenue for the government, or even a net loss.

When the French government recently attempted to introduce a 75% income tax rate (for earnings over €1 million per annum) there were high profile cases of wealthy individuals threatening to flee the country, including the actor Gérard Depardieu (who followed through).

In the UK, a common argument of Conservatives is that any increase in taxes on high earners will make the country "uncompetitive" (in the sense that the rich will flee to foreign tax havens).

Why don't more countries do it?

A. Administrative convenience: Taxing non-residents is complex to administer and difficult to enforce.

B. Ideological opposition: The right regards tax competition as a feature rather than a bug. A territorial taxation system enables tax avoidance by the rich, limits the policy-making freedom of governments, and helps reduce the size of the state. So what's not to like?

"Competitiveness" can be used as a convenient excuse for opposing popular tax rises on high earners, while presenting the right as sensible pragmatists and the left as unrealistic ideologues.

C. European integration: In Europe, all EU citizens have the right to work and reside anywhere in the union. This means that there would be an awful lot of non-resident citizens for national tax authorities to keep track of. It also means that it is relatively easy for an EU citizen to settle in another member state and, after a period of time, become naturalised and renounce their native citizenship.

Any policy of taxing non-residents would therefore probably have to be imposed at the EU level in order to be truly effective. At the moment there is little appetite among member states for the EU to be given more powers over taxation.

D. Scaleability: For similar reasons I suspect one reason this policy seems to work for the U.S. has to do with scale. If every U.S. state had its own "citizens" and tried to tax them regardless of where they lived in the union (or the world) I expect that would be impracticable. The policy no doubt benefits from being implemented at the federal level.

Reasons to tax non-resident citizens:

1. Many countries grant expats the right to vote. So you might argue "no representation without taxation!"
2. Citizens are entitled to consular assistance when abroad.
3. It prevents tax avoidance, in the form of high wealth citizens relocating to foreign tax havens.
4. It prevents unfair tax competition. If only residents are taxed then foreign governments can seek to lure high wealth individuals by offering tax breaks.
5. The potential for tax avoidance and tax competition limits the policy making freedom of governments when it comes to setting tax rates for high earners, and may create a race to the bottom that erodes the tax base in all nations, to the common detriment.

In Europe, whenever any party proposes to increase taxes on high earners opponents invariably argue that the policy would be counter-productive, because high wealth individuals would simply relocate abroad, which may lead to the policy producing little additional revenue for the government, or even a net loss.

When the French government recently attempted to introduce a 75% income tax rate (for earnings over €1 million per annum) there were high profile cases of wealthy individuals threatening to flee the country, including the actor Gérard Depardieu (who followed through).

In the UK, a common argument of Conservatives is that any increase in taxes on high earners will make the country "uncompetitive" (in the sense that the rich will flee to foreign tax havens).

Why don't more countries do it?

A. Administrative convenience: Taxing non-residents is complex to administer and difficult to enforce.

B. Ideological opposition: The right (and some elements of the centre-left) regard tax competition as a feature rather than a bug. A territorial taxation system enables tax avoidance by the rich, limits the policy-making freedom of governments, and helps reduce the size of the state. So what's not to like?

"Competitiveness" can be used as a convenient excuse for opposing popular tax rises on high earners, while presenting the right as sensible pragmatists and the left as unrealistic ideologues.

C. European integration: In Europe, all EU citizens have the right to work and reside anywhere in the union. This means that there would be an awful lot of non-resident citizens for national tax authorities to keep track of. It also means that it is relatively easy for an EU citizen to settle in another member state and, after a period of time, become naturalised and renounce their native citizenship.

Any policy of taxing non-residents would therefore probably have to be imposed at the EU level in order to be truly effective. At the moment there is little appetite among member states for the EU to be given more powers over taxation.

D. Scaleability: For similar reasons I suspect one reason this policy seems to work for the U.S. has to do with scale. If every U.S. state had its own "citizens" and tried to tax them regardless of where they lived in the union (or the world) I expect that would be impracticable. The policy no doubt benefits from being implemented at the federal level of a very large nation.