I know of a graduate student in MIT from Taiwan who inherited money back home BEFORE he came to America and has the inherited money deposited in a Taiwanese bank earning interest. Quite substantial amount too.
After getting his graduate degree, He worked for a Silicon Valley company after graduation and became a permanent resident two years ago ( a green card holder ). He pays taxes on his income from his salary here in the US.
He is now in a dilemma — because according to our tax code, he has to declare income FROM ALL SOURCES.
Is it immoral and criminal of him if he did not declare the interest income he gets from the money deposited in a bank account in Taiwan under his Chinese name? ( THAT WAS EARNED BY HIS PARENTS AND NEVER ENTERED THE US AT ALL ).
This is a very important question because MANY hard working LEGAL immigrants, who never depend on government largesse are asking themselves the same question.... many have money deposited back home BEFORE they came to the US. Does Uncle Sam have a moral claim to that money?
The result of this will be to debase the advantages of being a US citizen. Eventually it will make it harder for companies to employ talented individuals in the US. It will contribute to the decline of the US as an economic power.
It has no such moral claim - but it has a claim nevertheless. Likewise with monies earned overseas; the US and Eritrea are the only two nations that tax based upon citizenship, not locale. The US makes a claim to taxes on any money you earn anywhere in the world, if you're a citizen or permanent resident. Highly immoral - but a claim nevertheless.
As far as income taxes go, I'm not sure they are inherently immoral - but I do consider non-flat income tax rates as immoral. If we're going to tax income, then it should be a single flat rate that all pay, regardless of amount of income.