Extracted from the Wall Street Journal of June 28, 2006 pages A14

Our Taxed Expats

By NEWT GINGRICH and KEN KIES

...

All things being equal, it is cheaper for our employer to hire a non-American for a foreign position. If our employer moves us, it likely will have to raise our pay to cover these additional tax costs to get us to agree to the assignment. If our employer hires a foreign national, already onsite, it simply pays a base foreign salary.

...

We would propose something radical. Why not follow the lead of our trading partners and exempt foreign-earned income completely? If that is too far-reaching, we should repeal the tax increase, effective back to its January start date, and restore the intended utility of section 911 by increasing the exemption amount to $117,000, which would take into account inflation since the amount was originally set (at $70,000) in 1982.

Either of those approaches would mean more U.S. players out on the field. Global business competition is already fierce enough. We shouldn't sabotage ourselves.

Mr. Gingrich, a senior fellow at the American Enterprise Institute, is former speaker of the House of Representatives. Mr. Kies, a managing director at Clark Consulting, served as chief of staff of the Joint Committee on Taxation 1995-98.

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