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To Limit the Effects of Outbound Foreign Direct Investment on the National

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To limit the effects of outbound foreign direct investment on the national economy, home governments may impose differential tax rates that charge earnings from abroad at a higher rate than domestic earnings.


Definitions:

Federal Government

The national government of a federated state, which holds the authority to govern at a level above individual states or provinces.

Personal Income Tax

A tax that governments impose on individuals based on their earnings or income.

Top Marginal

Refers to the highest tax rate applied to the last dollar of taxable income in a progressive tax system.

Federal Income Tax Rate

The percentage of an individual's or corporation's income that is paid to the federal government, which varies based on income level and filing status.

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