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There is an extreme financial disincentive for Americans to work abroad. If you travel frequently to Dubai (as an example) as I do, it will astonish* you to di

There is an extreme financial disincentive for Americans to work abroad. If you travel frequently to Dubai (as an example) as I do, it will astonish* you to discover very few Americans working there, but tons of British, Australian, South African, etc. people busily making a living, building a business, etc. The reason is taxation. Americans working in Dubai (no income tax there) must still pay U.S. income tax and pay a ton to get the tax returns done correctly. A British citizen working in Dubai pays nothing to Inland Revenue and does not file a U.K. income tax return. Question: who is cheaper to hire, if you are an employer in Dubai? Hint: that's why all of the international bankers are NOT American. ------- * Sarcasm. EDIT: this is one reason why our law firm has a booming business in expatriation -- people giving up U.S. citizenship/green cards.

spikels 13y ago
This effect is biggest in low tax countries because of the credit US citizens end up paying the HIGHER of US and local income taxes (more or less - rules are complex). Also see relatively few Americans in Hong Kong and Singapore which have low tax rates like Dubai. Unlike almost everyone else in the world there is no benefit for Americans to work in low tax countries because they still end up paying US tax rates. If a company hires an Austrailian and an American in Hong Kong the American ends up with less after tax income. So the draw to these places is much less for US citizens.
- vasilipupkin 13y ago
  There is still a benefit, because you pay only federal income taxes, but not state taxes and you do not pay various other taxes such as medicare surcharge on investment income. So if you are from a high tax state in the U.S. ( California or NY ), it may still make sense.