Low TAX JURISDICTION HIGH TAX JURISDICTION INCOME BELOW FEIE LIMIT 1.
The above analysis does not apply to foreign investment income because the FEIE only applies to earned income, i.
tax liability primarily in low tax jurisdictions on investment income and to the extent that earned income exceeds the FEIE maximum.
Conversely, the FTC would not be required for expatriates and the FEIE and FHE could be completely eliminated if worldwide taxation was not imposed on U.
Furthermore, self-employment tax is due on any amounts excluded from income under the FEIE and FHE rules.
The competitiveness or export promotion argument in favor of the FEIE and FHE is that U.
To be considered a "qualified individual" and thus eligible for the FEIE, a person must meet two conditions.
The FEIE has been a catalyst for significant controversy since its introduction nearly a century ago, with its opponents calling for major modifications to, or the outright elimination of, this tax program.
To comprehend the arguments made in support of and against the FEIE, it is necessary to first have a basic understanding of the policies that guide the United States in making decisions related to international taxation.
Champions of the FEIE maintain that Section 911 is consistent with the components of U.
Proponents of the FEIE rely on the net income theory in arguing that U.
at 747-48 (making the point in the context of the debate over the justification for the FEIE
and FHE); see also David R.