[jhancock]

Most people savvy enough to make international investments have setup structures that ensure they don't pay any tax at all. Forcing the issue and making everyone pay where the value is generated would be a win for each country. The U.S. has lost massive potential tax revenue by not collecting on foreign investment gains in U.S. entities. China does not need to make such a move as they already have in place a much larger protection deal going: your gains in China for the most part, get locked up in RMB and can't easily be moved out of China. So although your foreign invested capital gains are not taxed directly, your gains mostly have to get reinvested in other China interests. Now that is a sweet racket!! Its t least on par with the petrodollar scheme.