Originally Posted by dherloc
Sort of standing at the fence on this one...not on the other side though...yet.
I have two friends that I worked with over the years that work mainly out of country. They come back every few months for a week or so to visit family, then go back. I would think ALL of their money is earned overseas. But, their families do still live here. So in their case, I would think that they should be taxed.
Lets say you are single with zero ties. That would be a better argument for keeping all (most?) of it.
But of course, there are lots of instances over the last few decades where the situation has turned south in a hurry for those working overseas. In that case, do you 'send in the Marines' to get a person out? My grandfather missed being caught up in the overthrow of the Shah by a month. He was working for Bell in Iran at the time and given a slightly different set of circumstances, could have ended up needing government intervention to bail him out. That intervention did not work out well in that case, but there are many others where it did. Those were tax dollars at work.
Like I said...pretty close to being on the fence with this one. Makes for an interesting discussion doesn't it.
Are you aware of how taxes on overseas income works? Are you willing to give me a TAX REFUND when I never paid taxes because the overseas tax credits and tax exclusions exceeds my tax liability and YOU OWE ME MONEY?
There is also a $95100 (for 2012) tax exclusion. This means the first $95k is tax exempt.
Now, onto an example. I have an acquaintance that lives in Switzerland. She is a dual citizen (USA and Swiss). One parent is each nationality (for those that dont think you can have dual citizenship, you are wrong). She has never lived a day of her life in the USA. She has only ever done small vacations to visit family. She has always lived in Switzerland. The US government (IRS) sent her a letter that she needs to be filing US taxes. Keep in mind she has never lived in the USA. Never received a benefit (no schooling, no anything) yet gets a letter that she has to file taxes.
I can tell you what the end is. She is in the process of renouncing USA citizenship. One would think that is easy, but the USA wants its tax money....