Not entirely true (expat from 2011 to 2013, please seek qualified tax professional advice). The US grants an exemption of something like $60K/year for income e

Not entirely true (expat from 2011 to 2013, please seek qualified tax professional advice). The US grants an exemption of something like $60K/year for income earned entirely outside the US. It has to be paid by a non US entity in local currency. And, IIRC, there were a few other requirements. They will also credit you with any income tax you may have paid in your country of residence. You are correct that you're pretty well screwed in a high cost-of-living country as the base exemption won't go far. But then, you're pretty well screwed by the IRS sticking its nose into the bank accounts of US citizens looking for transactions of $10,001.