For those that think tax equalization is bad:

150k income
U.S. Tax obligation = 150k * .33 = 49,500.
U.S. Tax obligation using foreign exclusion = 150k - 85k = 65k * .33 = 21,500.

Foreign Tax Rate % * 150k plus U.S. tax obligation using 85k exclusion
20 30,000 + 21,500 = 51,500
30 45,000 + 21,500 = 66,500
40 60,000 + 21,500 = 81,500
50 75,000 + 21,500 = 96,500

Foreign Tax Rate % * 150k plus U.S. tax obligation using tax equalization
20 30,000 + 49,500 = 79,500, but you pay 49,500
30 45,000 + 49,500 = 94,500, but you pay 49,500
40 60,000 + 49,500 = 109,500, but you pay 49,500
50 75,000 + 49,500 = 124,500, but you pay 49,500

According to my calculations, if you used the 85k foreign exclusion on a 150k income, which left you a 21,500 tax obligation to the U.S., you would need your foreign tax percentage to be 18.7% to break even with the tax equalization package.

Obviously, you can modify the numbers (income, tax percentages, brackets, writeoffs, expected vs. unexpected foreign taxes, etc) here, but my point being that we definitely do not lose with tax equalization vs. the foreign exclusion.