> how could the US government stop this from happening?
By taxing based on residency, not citizenship, like pretty much all other countries on Earth.
People have the right to lower their tax liability within the law, they have the right to move, and they have the right to renounce citizenship (if they have another one). We're not going to prevent any of that from happening. The only thing the US can do is to remove the incentive to renounce citizenship if they think that this is a problem.
Do you have a citation where US (federal) law requires one to have a foreign citizenship in order to renounce US citizenship?
Or, would it be possible to renounce US citizenship without foreign citizenship, perhaps while maintaining citizenship in one's state of origin in one of the seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—which levy no state income tax, or in one of the two others, New Hampshire and Tennessee, which don't tax earned wages? In other words, could one reside overseas but maintain a tie with a particular state within the USA without any relationship to the federal government?
Ah, well according to Google the US are one of the few countries that does not require another citizenship in order to let you renounce citizenship.
So, indeed you could renounce US citizenship without having any other one... But that would make you stateless, without passport, etc. which does not sound like a good idea.
Wouldn't you not have a passport in that case? So presumably you would never be able to get back to the state you have a tie to, right? Seems like a tenuous circumstance.
By taxing based on residency, not citizenship, like pretty much all other countries on Earth.
People have the right to lower their tax liability within the law, they have the right to move, and they have the right to renounce citizenship (if they have another one). We're not going to prevent any of that from happening. The only thing the US can do is to remove the incentive to renounce citizenship if they think that this is a problem.