There are over 300,000 voting US citizens living in Israel at this time, and that number continues to grow every year.
While it is true that there is a federal tax exemption, allowing Americans to live a normal life abroad as long as they earn wages, those who are self employed owe self-employment taxes to the US on top of the taxes they have to pay to Israel.
In many countries there is a totalization agreement that addresses the fact that it is unfair to force individuals to pay social security taxes twice. Yet the US has yet to sign an International Social Security Totalization Agreement with Israel. This leaves American citizens living in Israel in the unfortunate position of being taxed twice for social security. This is an excessive and unfair burden that must be remedied.