Kim, a U.S. citizen and resident, owns and operates a novelty goods business. During 2022, Kim reports taxable income of $115,000: $50,000 from foreign sources and $65,000 from U.S. sources. In calculating taxable income, the standard deduction is used. The income from foreign sources is subject to foreign income taxes of $17,500. For 2022, Kim files a joint return with her spouse.

a. Assuming that Kim chooses to claim the foreign taxes as an income tax credit, what is her net Federal income tax payable for 2022?

b. Recently, Kim has become disenchanted with the location of her business and is considering moving her offshore operation to a different country. Based on her research, if she moved her business to her country of choice, all relevant revenues and costs would remain approximately the same, except that the income taxes payable to that country would be only $7,000. Given that any foreign income taxes paid are available to offset the U.S. tax liability (whether she operates in a high-tax or low-tax jurisdiction), what effect will this have on her decision regarding the potential move?