Well, then maybe you need to do a little more reading yourself, Juice. Your actual tax burden between the foreign country and the US become FedEx's burden under equalization. FedEx will collect from you...and I quote from the company website....

"Tax equalization is accomplished through the collection of a Hypothetical federal, state and local income tax..."

"Q: How does the overseas assignment affect my state and local income taxes?

A: Estimated and final hypothetical state and local income taxes will be computed on Company income allowing deductions and exemptions as determined under the laws of the tax jurisdiction the overseas employee was relocated from."


Now, you wanna run those numbers again on a first year F/O relocated from California or Iowa?

Of course your actual burden would not include state taxes, but that's not what comes out of your pocket. The "hypothetical tax" is what FedEx withholds from you and they pay whatever your true burden is.

Your bill: Hypothetical Federal, State, and Local taxes from state in which you relocated from.
FedEx's bill: Actual burden figuring FEIE, Foreign Tax Credit and foreign tax burden.