Impact on Trade of Changes in Taxation of U.S. Citizens Employed Overseas

For 50 years, tax exemptions or tax breaks have been given on income earned by U.S. citizens employed abroad. The Tax Reform Act of 1976 reduced the amount of the tax break, and by the spring of 1977, U.S. individuals and businesses operating overseas were expressing concern that this reduction might force many citizens to return to the United States and seriously reduce the competitiveness of U.S. industry abroad.