You are correct. I should have been more clear that I was only talking about US citizens. For US citizens it is citizenship based tax, as opposed to resident based taxation. The US and Eritrea are the only countries in the world that do this.

To your second-point, I have the same issue from the other side. I cannot take advantage of IRA- and/or 401k-like investments in my country of residence, because the assholes at the IRS refuse to recognize them as such — even though there is a tax-reciprocity treaty between the countries. So if I invest, I have to declare any gains as income for my US taxes (and this would be compounded each year), while not in my country of residence, and the difference has to be discussed with my accountants in both countries. The cost of compliance is greater for me — even as a relatively high income earner — than the gains I would make.

I have enough income to be able to invest other places, but I read about horror stories all over the world of expatriates who are going bankrupt and/or loses their businesses because of these stupid and vindictive laws.