The average American has always had a love-hate relationship with the IRS-with hate predominating. The so-called Exit tax kicks in the moment you think of expatriating from the U.S. The current maximum capital gains rate is 23.8%, which includes the 20% capital gains tax and the 3.8% net investment income tax. Why its unfair? Currently, federal income tax brackets range from 10% to 37%. Nearly half of the American population pays taxes and in fact, the top 50% account for nearly the entire federal income tax. So the question of levying an exit tax on Americans relinquishing their citizenship really means I am going to get what I can from you before you make a break for it. In other words, the IRS ensures that the relinquishing citizen would never feel grateful for giving and doing his bit for the great country. The current threshold is so less ($12,550 and $28,500.) that almost everyone who holds a reasonable job pays his federal taxes by filing an income tax return each year. Then consider that inflation in the millennium year was around 3.3% whereas today it's over 8%, so where has real income disappeared? Then when someone decides to head west (after paying all his legal dues of a lifetime), IRS slaps him or her with the Exit Tax. Hence the question.
Not everyone who wants to leave the USA or gives up their citizenship is subject to the exit tax; there is a relatively high wealth allowance. Incidentally, this tax is well founded in terms of content and can therefore be understood as quite appropriate. See the following link for details:
https://www.greenbacktaxservices.com/blog/exit-taxes-us/
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