Residency Based Tax Bill Introduced in Congress

[TJKansai]

https://www.democratsabroad.org/elective_rbt_explainer

[Tkydon]

"US citizens, but not “green card” holders, residing overseas (newly called “nonresident US citizens”), in general, would be removed from the category of individuals subject to US income tax and taxed like nonresident aliens (foreign individuals)."

This is contradictory...
nonresident aliens (foreign individuals) are subject to US income tax and taxed on US sourced income...

You need to read the Tax Treaties between the US and the country of residence.
Non-Resident Aliens are still be taxed in the US on US Sourced Income, as defined in the treaties. A Tax Withholding Agent will be compelled to withhold tax at source, based on the filing of a form equivalent to W-8BEN, maybe Form 8854, or 30%. Tax rates depend on the reciprocal rates as stipulated in each agreement.
https://www.irs.gov/businesses/internat ... ies-a-to-z
https://www.irs.gov/businesses/internat ... -documents
https://www.irs.gov/pub/irs-pdf/p515.pdf

However, it will no longer be necessary for employers to compensate American Employees for their higher tax obligations, which will no longer be the case, so American Employees should expect their compensation to fall...

Individuals who want to transition to new RBT rules as Non-Resident Citizen status with a net worth exceeding $13.6 million ($27.2 million-married couples) will have to pay the “transition tax” on deferred income. The tax applies to a deemed sale of all property. Tied to estate tax unified credit. These amounts revert to $5 million or approximately $7 million when adjusted for inflation, if TCJA is not extended.

Equivalent to the 'Exit Tax', anyone with total assets in excess of the amounts shown would have to mark their assets to market and pay Capital Gains Tax as if they had liquidated everything... It looks like an Up Front Wealth Tax on those individuals to separate you from 20% or more of your assets on Day 1...

And I have not seen any mention of any change to the PFIC Rules...

[RetireJapan]

"US citizens, but not “green card” holders, residing overseas (newly called “nonresident US citizens”), in general, would be removed from the category of individuals subject to US income tax and taxed like nonresident aliens (foreign individuals)."

Most important point IMO is that this proposal is for a voluntary process where people have to apply for the new nonresident status. People who prefer the current system would just not apply.