Direct Tax code- removal of RNOR status

[SAPPORO]

But why have RNOR, special int rate and tax free status for NRO/NRE account? Other countries don't give such rebates (ex USA). America even taxes its citizens when they live outside.

There is an annual foreign income exclusion of a hefty $127K on earned income for US citizens. I guess USC Desis that R2Ied and working in India use that tax break presumably designed for diplomats stationed overseas.

AFAIK Foreign Earned Income Exclusion (FEIE) and Foreign Housing Deduction don't apply to US Govt Employees stationed abroad (like diplomats and state dept officials). It really is designed to relieve tax burden on US Citizens living and working abroad (congress even tied it to inflation in the 80s, decades after being stuck on a fixed amount since the 1920s).

Thanks for correcting me. FEIE was setup to avoid double taxation. Some smart Americans work in middle east to get the most benefit out of it since they don't pay any taxes there as well.
Since US govt employees are paid by the US govt and don't pay any taxes abroad, there is no question of double taxation and consequently no FIEI.