I'm amazed that there are folks who actually still think there is a expat income exclusion. And no doubt you voted on the LOA without knowing that. Although BC and his entourage never really explained that. Instead they merely stated that "tax equalization" was the "norm" with many companies. Of course nobody asked what the "norm" expat packages those companies offered. But I digress. The tax break is still there for the expats, according to the IRS. However, the individual going to HKG signs a document which in essence, signs those benefits which you, the employee, are eligible for, and gives them to the company.

I wanted to go from SFS to HKG but after running the numbers, it wasn't worth it, to me. Also, the tax breaks the company gets isn't limited to just the foreign income exclusion (which was about $85,000 when I left, not $130K as Convair thought). There are also tax write-offs for the Hong Kong taxes paid and housing paid. I believe the company would get back in excess of $60,000 a year with my "tax equalization." Remember too, they are paying Hong Kong taxes. The write-off for those taxes paid are huge though. For me the company would have paid roughly $65,000/year for me to be in HKG. The tax write offs would return about $60,000/year. I saw the lines for some of the guys that were going to HKG in SIBA status. The deadhead fare was about $6,000 each way. Perhaps going to HKG should not be a financial windfall to the crewmember going there, as BC stated, however, did it need to be a financial windfall to the company at the crews expense? I think not.

Finally, to those thinking of commuting, beware as a couple posts explained. Price Waterhouse does your taxes two ways. One, as if you receive the expat tax breaks. The second, as if you don't live abroad, but rather in the states. The difference is what the company gets. That's simplified to say the least. And I know my former Subic buds are chomping at the bits to correct some errors in what I've said. For whatever misquotes I have stated, I apologize in advance. It's a bit difficult to say you live abroad, if the wife and kids live in the USA. Even harder if one of them is earning an income stateside.

What I have stated is not exact by any means, but it is fairly accurate. As is written on many a financial disclosures, consult your financial consultant first. Money magazine proves every year there are fifty different tax returns from fifty different tax preparers, all running the same numbers for the same hypothetical family.

As a side note, before the LOA was signed, O and the SFS ACP talked to us after a fact-finding mission to HKG. In a span of one hour we had been told at least a half dozen times that someone could rent a decent place in HKG for $3500. Each time the figure of $3500 was mentioned a follow-on "we're not stating the company is going to offer that," was also stated. After the LOA was a done deal I flew with the current ACP in HKG. He told me "the company was willing to pay $4000/month in housing, but the union took the first offer of $2700." That was not second hand news. That was straight from his mouth. Was it true? I don't know. Who cares, I didn't bid it.