Originally Posted by ubermich
Hong Kong does have much lower taxes, however, the united states is one of the few nations that actually taxes its citizens. So even if you don't live or work in the US, if you are a US citizen, then you pay US taxes. You can deduct your Hong Kong taxes from this, so it's not like you are paying double, but you don't just pay US taxes. However, there is something you can set up, I'm not too familiar with, but you can avoid paying US income tax as long as you don't even step foot inb the US for at least two years, but then after that if you come back, even for a day, you have to start paying taxes again.
The above is not correct, in fact, the last sentence is pure fiction. A U.S. citizen or green card holder is required to report their global income and is still required to pay tax. However, a U.S. citizen or green card holder can have an $80,000 foreign earned income exclusion if they meet one of two tests. The first, and best, method is to be a resident of a foreign country for a full calendar year. The second method is to be IN a foreign country for 330 days out of 365. This deduction is on top of any other deductions you may have so that a person residing in a foreign country needs to make over $100,000 per year to reach a point where they have to pay any tax to Uncle Sam. In the case of a Cathay captain making $200,000 per year he would also be able to offset his U.S. taxes with the taxes he paid in Hong Kong.
Typhoonpilot