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Taxation-Proposed Changes In The Tax Treatment Of Foreign Income, Donald D. Davis S.Ed.

Michigan Law Review

The United States has the power to tax the income of its citizens and domestic corporations even though that income is earned in a foreign country. When it is recognized that income derived abroad generally incurs tax liabilities to foreign governments as well, it immediately becomes apparent that the American businessman doing business abroad may, absent some sort of relief provisions, easily be the victim of double taxation. Relief has taken a number of forms. Income derived by American corporations in certain geographical areas is under proper circumstances wholly or partly exempt from federal income taxation. Thus, citizens and corporations …