There are many different scenarios which the law as it currently stands do not adequately cover for.
Scenario:
* Parent gains US citizenship through immigration. Parent inherits from grandparents.
* Person gains US citizenship through immigration. Person inherits from parents foreign bank accounts.
* Based on my understanding, US now has a claim on monies which have at no point entered the US, nor have been derived from US related activities.
* This is crazy.
I'm totally fine with paying taxes on income derived from being in the US but to have to pay US taxes on income derived elsewhere is just insane overreach.
I'm not a tax expert but don't think the scenario you describe is correct.
In most countries when you inherit it's the estate that is taxed and generally the estate is taxed in country of domicile of the estate rather than citizenship of the recipient.
In your scenario the estate would would be taxed by the country of domicile, and then the remaining money transferred to you. If you were a US person then you would be taxed on any interest or capital gains from that point onwards.
That said this kind of thing is generally fairly complex (determining country of domicile for example is not obvious) so generally you would involve an accountant or tax professional.
To be clear, the money is not intended to transfer into a US bank account. So for all intents and purposes, it has remained outside the US and will continue to do so.
The point being that the US has no business trying to tax income generated from funds that has never entered the country. Residence based taxation (like the rest of the world) would address this immediately.
Almost all countries tax foreign income of residents. In your example you would be taxed on gains beyond the initial amount in all countries that aren't considered to be tax havens.
(The non-domiciled rule in the UK being one notable exception)
I went digging for more information and it seems that he now is potentially supportive of residence based taxation instead of citizen based taxation.
From reddit.com/r/expats4sanders, http://www.democratsabroad.org/our_candidates
There are many different scenarios which the law as it currently stands do not adequately cover for.
Scenario:
* Parent gains US citizenship through immigration. Parent inherits from grandparents.
* Person gains US citizenship through immigration. Person inherits from parents foreign bank accounts.
* Based on my understanding, US now has a claim on monies which have at no point entered the US, nor have been derived from US related activities.
* This is crazy.
I'm totally fine with paying taxes on income derived from being in the US but to have to pay US taxes on income derived elsewhere is just insane overreach.