I’m hoping the policy is where the tax applies to money earned past that exemption
Seems to be the case; nothing in the links I looked at contradicted it, and one specifically said:
Income above the current exclusion of $91,400 ($182,00 for couples) is taxed at 28 percent up to $171,550 ($208,850 for couples). Above $171,550 are progressive tax brackets that go up to 35 per cent.
Seems to be the case; nothing in the links I looked at contradicted it, and one specifically said:
http://internationalliving.com/2010/04/14-foreign-earned-income/