On Sat, 17 Aug 1996, Vincent Cate wrote:
Robert Hettinga <rah@shipwright.com>
However, as Black Unicorn has noted here before, the Phillipenes are the only other country besides the USofA where citizens are taxed any income you get, no matter where on earth you actually earn it.
It is not exactly that bad if you are outside the USA. I got ahold of the IRS codes on this before I left the USA (so about 2 years ago). The rule then was that the first $70,000 you earned was tax free if you were outside the USA for 330 days or more of the year. From another x-pat in Anguilla I heard that the $70 K had been increased.
Is this so? Last I had heard, Congress was looking at eliminating the credit altogether. It's slightly misleading to call it "tax free", though; the way I understand it, it's not included in the IRS's estimation of your assets, but may play a factor in determining the final amount of $$$ you end up paying. Very rarely does it translate directly into a $70,000 break on your taxes, although it does help. At least that's the way it has been represented to me (albeit by an expatriate chapter of the American Businessmen's Association). There are no doubt rules and exceptions to what manner of income may be exempted, as well. It would be wonderful if the amount were increased. It would be preferable if the requirement to pay taxes at all were eliminated, but that would be asking too much of today's deficit-hungry, anti-"corporate welfare" environment... Not that it affects me anymore one way or the other, except insofar as it hinders the desireability of U.S. workers abroad. One wonders that whether the spread of such potential tax-avoidance schemes as ecash/data-havens may, er, restore U.S. competitiveness in a novel way. :-) -David Molnar