The U.S. government has long created hardships for Americans who live abroad, and much of the problem relates to the tax code. America is the only country that taxes citizens on their global earnings, and in 2010 Washington exacerbated that by passing the Foreign Account Tax Compliance Act, or Fatca. As this law comes into force, it is doing immense harm to Americans and American interests abroad.

Aimed at preventing money laundering, the financing of terrorism and tax evasion, Fatca requires foreign financial institutions...