Cite as: 515 U. S. 450 (1995)
Opinion of the Court
of its residents, even income earned outside the taxing jurisdiction: 11
"That the receipt of income by a resident of the territory of a taxing sovereignty is a taxable event is universally recognized. Domicil itself affords a basis for such taxation. Enjoyment of the privileges of residence in the state and the attendant right to invoke the protection of its laws are inseparable from responsibility for sharing the costs of government . . . . These are rights and privileges which attach to domicil within the state. . . . Neither the privilege nor the burden is affected by the character of the source from which the income is derived." New York ex rel. Cohn v. Graves, 300 U. S. 308, 312-313 (1937).
This "general principl[e] . . . ha[s] international acceptance." American Law Institute, Federal Income Tax Project: International Aspects of United States Income Taxation 4, 6 (1987); see, e. g., C. Cretton, Expatriate Tax Manual 1 (2d ed. 1991) ("An individual who is resident in the UK is subject to income tax on all his sources of income, worldwide."). It has been applied both to the States, e. g., Shaffer v. Carter, 252 U. S. 37, 57 (1920); see 2 J. Hellerstein & W. Hellerstein, State Taxation § 20.04, p. 20-13 (1992), and to the Federal Government, e. g., Cook v. Tait, 265 U. S. 47, 56 (1924); see 1 J. Isenbergh, International Taxation 45-56 (1990).12
11 For nonresidents, in contrast, jurisdictions generally may tax only income earned within the jurisdiction. See Shaffer v. Carter, 252 U. S. 37, 57 (1920) (as to residents, a State "may, and does, exert its taxing power over their income from all sources"; as to nonresidents, "the tax is only on such income as is derived from . . . sources [within the State]").
12 Although sovereigns have authority to tax all income of their residents, including income earned outside their borders, they sometimes elect not to do so, and they commonly credit income taxes paid to other sovereigns. But "[i]f foreign income of a domiciliary taxpayer is exempted, this is an independent policy decision and not one compelled by jurisdictional considerations." American Law Institute, Federal Income
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