Foreign earned income exclusion a lower income taxpayer, even if the taxpayer is in a higher tax bracket. Foreign earned income exclusion The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. For 2017, the maximum exclusion is $102,100 per taxpayer, $103,900 for 2018 (future years indexed for inflation). In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum ($44.19 per day in 2015) but with limits. The exclusion is available only for wages or self-employment
Dual income tax Dual income tax The dual income tax system levies a proportional tax rate on all net income (capital, wage and pension income less deductions) combined with progressive tax rates on gross labour and pension income. This implies that labour income is taxed at higher rates than capital income, and that the value of the tax allowances is independent of the income level. The dual income tax system deliberately moves away from the comprehensive income tax (global income tax) system which taxes all or most (cash) income less deductions (net income) according to the same rate schedule. The dual income tax