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Old 08-01-2007, 11:51 AM   #21  
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Default Just voted...

Just voted and feel lovely....

I'm on a trip and have been discussing the LOA with my almost 60 and over 60 crew members.

Quick aside: it is my opinion that the MEC feels this LOA is good because it solidifies scope. That may be true. The Block 4 email that just came out further confirms this thought. If this is true, I wish "they'd" be straight and say, "dudes, this thing stinks BUT is worth it because it solidifies scope."

Back to the subject...after some discussions, the other guys on my crew comfortable with what BC says.

I began to read some of the LOA pertaining to STV and about 15 minutes later, one crewmember said, "SVT or STV? I thought this was about Single Visit Training for those folks at FDA's...which is a good deal...."

Needless to say we talked some more.

The reality to me about the LOA is it creates loads of grey areas. Additionally, I don't like the idea of STV, especially since I'll end up getting STV's.
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Old 08-01-2007, 12:55 PM   #22  
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Default Where are you getting this stuff?

[quote=TonyC;206686]
[I'm sure I'll regret doing this.]




Tax Gross-Up is EXACTLY what makes Tax Equalization work. It's not only "in" the LOA, it's a key component that allows the language, "a pilot bears approximately the same US Federal tax burden as he would pay if he were assigned to a domestic base rather than CDG or HKG."

Taxes paid by the employer to the host country are accrued to the employee as taxable income, and thereby increases the employee's tax obligation to the U.S. (and maybe the applicable state). This is not the choice of the employee or employer, it is IRS regulation. In effect, that "raises the pay" of that employee. A gross up is applied to ensure that the tax obligation on that increased income does not impose a tax burden that he would have not borne had he been assigned to a domestic base.

I hope this brief explanation will help everyone see it more clearly. (If not, you can find my contact info on the ALPA FEDEX website.)

Consider also the Price Waterhouse Cooper's explanation of Tax Equalization Policy. As you read their information you might notice Tax Equalization is not a scheme devised by FedEx -- it's a standard option for companies with expatriate employees.


I won't get into a discussion about whether this is good or bad -- I leave that debate in your hands. I simply believe the debate will be more relevant if the subject matter of the debate is better understood.






[My post on this subject and silence on other subjects should not

be misconstrued as agreement with the views being expressed on
those subjects. This post indicates nothing more than my inability
to bite my lip. Please forgive me.]
.[/quote
This is what the LOA says:

]Federal Tax Equalization Services
Pilots accepting permanent vacancies in CDG or HKG are both entitled and required to use the tax equalization procedures and tax return filing services (US and foreign) offered by the Company through its vendor. The purpose of tax equalization is to provide that a pilot bears approximately the same US Federal tax burden as he would pay if he were assigned to a domestic base rather than CDG or HKG. To facilitate accurate tax computations and reporting, pilots will be required to provide all necessary tax information to the appointed tax provider

Where does it mention tax gross up? Don't put language into the contract or LOA thats not there, it is neither honest nor enforcable. The person you chastised in you previous post pointed out the factual definition and explanation of a "tax gross up" not some hidden reference to a web site and theoretical tax program.

Have you read the Price Waterhouse Cooper's (PWC)Information?

This is a theoretical tax program. Lets say you used to live in California, you sold your house and have no economic ties to the place. You pay all applicable federal state and local tax deemed appropriate by (PWC) including special local tax provisions. On the other hand you move from Anchorage sell your house and have no economic ties, you pay only theoretical federal taxes. Two identical people same job, same place, same income, no home outside the FDA, two very differnt tax obligations.

Oh, and you put the proceeds from your home in a CD. Better check the tax implications, spousal income, and income earned from investments both inside of and out of the host country may be taxable by the host government and is not covered by the employeer.

IRS information, check pamphlet #54 on the IRS web site. Especially for the persons interested in HKG. Without tax equalization, $82.4K tax exemption, tax credit or income adjustment for host government taxes paid, credit applied to income above exemption amount (Captains may want to take a look at that). Income earned outside of company still taxed by both. Live where you want. If you can get a work visa? Will not get the $2,700. If you don't take the move package no taxes on move benefits. Your local tax professional can run these numbers for you and get you an accurate estimation of you tax obligation. Seen any examples from the company or PWC. Don't use the excuse there are too many different individual situations. Use the generic 6 yr wide body FO and 10yr wide body Capt living in Memphis. Give an educated person something with which to compare.

Remember, this copied from LOA

NOTE: Proposal made with
the assumption that Hong
Kong government authorities
approve a pilot FDA

Do you think the FDA will be approved if the LOA is not ratified?

Leverage? This is not about leverage, it is about an informed decision.

But, according to the recent flood of e-mails, from our block reps, union, and company "leadership", they seem to elude to some esoteric information that has been explained to them in such a manner as to overide any concern that may be put forward on this, the ALPA webboard, or by personal interaction. They are telling you how to vote based on information they have received. Why not put out that compelling information to everyone so we can all be so sure this is a good deal.


Your parting note was that you would not discuss if this is a good or bad deal. How could you? You have no comparisons, no examples, no solid information. Just a theoretical tax program that tells us we will pay "approximately" , is that more approximately or less approximately, than we would have paid if I remained in place in the US. In addition, with the complexity of this type of tax program you will have to live what PWC tells you. Unlike most tax programs you will not be able to simply check this yourself. You could hire an international corporate tax consultant, that shouldn't cost much, if you don't agree. Remember you, by agreeing on the LOA have agreed to this tax program, even though you have not been shown any examples of how it would "theoretically" work.

Tony, I appreciate your willingness to address issues in this forum. That goes a long way towards establishing your genuine concern about this issue. I just think, having seen how the previous contracts have been enforced, that noone should count on anything, not in specific enforcable language, being binding, improving or changing unless it is in the best interest of the company.
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Old 08-01-2007, 07:35 PM   #23  
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Default

Quote:
Originally Posted by UnskilledFXer View Post
This is what the LOA says:

Where does it mention tax gross up?


The person you chastised in you previous post pointed out the factual definition and explanation of a "tax gross up" not some hidden reference to a web site and theoretical tax program.


Without tax equalization, $82.4K tax exemption, tax credit or income adjustment for host government taxes paid, credit applied to income above exemption amount (Captains may want to take a look at that).



NOTE: Proposal made with
the assumption that Hong
Kong government authorities
approve a pilot FDA

Do you think the FDA will be approved if the LOA is not ratified?


But, according to the recent flood of e-mails, from our block reps, union, and company "leadership", they seem to elude to some esoteric information that has been explained to them in such a manner as to overide any concern that may be put forward on this, the ALPA webboard, or by personal interaction. They are telling you how to vote based on information they have received. Why not put out that compelling information to everyone so we can all be so sure this is a good deal.


Your parting note was that you would not discuss if this is a good or bad deal. How could you? You have no comparisons, no examples, no solid information.

Tony, I appreciate your willingness to address issues in this forum. That goes a long way towards establishing your genuine concern about this issue.

(I quoted the fourth sentence ("Without tax equalization...") because I don't understand what you were saying.)


I tried to provide you with facts, and I apologize if you felt I was chastizing.

I can answer any of the above questions you have raised, but I won't do it here in public with 4760 amateur tax accountants and the rest of the world looking on. If you'd like to ask a specific question on the ALPA Webboard, I'll do my best to accomodate you.

The first time a math teacher demonstrated to me on the chalkboard how to use the Quadratic Formula, I watched, and followed the calculations, and believed that it was correct. I could not have immediately stood up at the same chalkboard and demonstrated to another class of students how to do the same thing. Since then I've practiced, and applied the skill, and even "re"-learned it to help teach my own children.

Similarly, the first time an accountant stood at a white board and explained the industry standard method of Tax Equalization, I watched, and followed the calculations and believed it was correct. I worked through more examples, asked questions, and discussed hypotheticals. That doesn't mean I'm prepared to stand before 4760 amateur tax experts and tell you how Tax Equalization works. I'm not going to school to become an acountant. However, I'll be happy to share with you my "class notes" and the "teacher's handout" (I'll bring them to the Hub Turn Meetings tonight and tomorrow (if I don't get called on Reserve) and do my best, but I'm not an accountant. That's why we hired an accountant. There's nothing esoteric about that.


Let's deal with the facts.




.
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Old 08-01-2007, 07:42 PM   #24  
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Default

Quote:
Originally Posted by TonyC View Post
(I quoted the fourth sentence ("Without tax equalization...") because I don't understand what you were saying.)


I tried to provide you with facts, and I apologize if you felt I was chastizing.

I can answer any of the above questions you have raised, but I won't do it here in public with 4760 amateur tax accountants and the rest of the world looking on. If you'd like to ask a specific question on the ALPA Webboard, I'll do my best to accomodate you.

The first time a math teacher demonstrated to me on the chalkboard how to use the Quadratic Formula, I watched, and followed the calculations, and believed that it was correct. I could not have immediately stood up at the same chalkboard and demonstrated to another class of students how to do the same thing. Since then I've practiced, and applied the skill, and even "re"-learned it to help teach my own children.

Similarly, the first time an accountant stood at a white board and explained the industry standard method of Tax Equalization, I watched, and followed the calculations and believed it was correct. I worked through more examples, asked questions, and discussed hypotheticals. That doesn't mean I'm prepared to stand before 4760 amateur tax experts and tell you how Tax Equalization works. I'm not going to school to become an acountant. However, I'll be happy to share with you my "class notes" and the "teacher's handout" (I'll bring them to the Hub Turn Meetings tonight and tomorrow (if I don't get called on Reserve) and do my best, but I'm not an accountant. That's why we hired an accountant. There's nothing esoteric about that.


Let's deal with the facts.


.
Tony,

Perhaps the Accountant I helped hire can fill in this table:

>>>>>>Estimated Tax Equalization Benefit
Memphis
Income..............CDG...........HKG>>>>>>>CAN

100K
150K
200K
250K

Tell him its OK he can get his numbers from Price Waterhouse again
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Old 08-01-2007, 07:56 PM   #25  
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Default

Quote:
Originally Posted by TonyC View Post

Let's deal with the facts.
A couple of questions.

1. Is it a fact that FedEx will withold a hypothetical "tax" based on your federal, state and local obligation as if you were actually there?

2. Is it a fact that if the total burden to the US government and Hong Kong Governements combined is LESS than the hypothetical tax withheld, the company keeps the difference?

3. Given the facts that (a) Hong Kong tax is on the order of 17% and (b) that the company is allowed to apply the FEIE to that persons' federal obligation, and (c)that all the money paid to the Hong Kong govt in taxes is deductable or creditable to the US Federal obligation, that the norm rather than the exception would be a person having an actual burden lower than the hypothetical that the company withholds?

1 and 2 should be an easy answer here. 3 might take a little figuring, but again, where are the examples? The company only uses an example of a domicle that won't exist as someone who wouldn't benefit and a generality of "special situation" to describe the other people from whom they will be witholding money which should rightfully be in their pocket.

4. Isn't it a fact that passage of this LOA gives the pilots permission for the company to "keep the change" in regard to tax "equalization"?

I expect the company to use such convoluted tactics to confuse us and sway our vote. I'm disappointed that my Union seems to be doing the same thing.
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Old 08-02-2007, 03:40 AM   #26  
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Default Just as Expected

Quote:
Originally Posted by TonyC View Post
(I quoted the fourth sentence ("Without tax equalization...") because I don't understand what you were saying.)


I tried to provide you with facts, and I apologize if you felt I was chastizing.

I can answer any of the above questions you have raised, but I won't do it here in public with 4760 amateur tax accountants and the rest of the world looking on. If you'd like to ask a specific question on the ALPA Webboard, I'll do my best to accomodate you.

The first time a math teacher demonstrated to me on the chalkboard how to use the Quadratic Formula, I watched, and followed the calculations, and believed that it was correct. I could not have immediately stood up at the same chalkboard and demonstrated to another class of students how to do the same thing. Since then I've practiced, and applied the skill, and even "re"-learned it to help teach my own children.

Similarly, the first time an accountant stood at a white board and explained the industry standard method of Tax Equalization, I watched, and followed the calculations and believed it was correct. I worked through more examples, asked questions, and discussed hypotheticals. That doesn't mean I'm prepared to stand before 4760 amateur tax experts and tell you how Tax Equalization works. I'm not going to school to become an acountant. However, I'll be happy to share with you my "class notes" and the "teacher's handout" (I'll bring them to the Hub Turn Meetings tonight and tomorrow (if I don't get called on Reserve) and do my best, but I'm not an accountant. That's why we hired an accountant. There's nothing esoteric about that.


Let's deal with the facts.




.
Fact, Nothing you say in a telephone call is legal or binding, unless it is recorded, with your permission, and you have the expertise in the area you are commenting on. You already said your not an accountant. You can tell me what ever you think you know but that's about it.

Fact, you shouldn't be standing before 4760 amateur tax accountants. Thats not your job.

Comment, You obviously have had some sort of class that enabled you to understand the tax equalization concept. Why hasn't the union sent out information to the rest of the crewforce, of at least a generic tax example.

Fact, I spoke with an IRS representative, specializing in US citizens living abroad, I asked one question, after aprox. seven minutes of research the questions still could not be answered. I was directed to an e-mail address and resubmitted my question. The question was answered with supporting documentation and tax code references.

Non-Fact, Question, Still think you can answer any question I pose?

Fact, The more I'm told to call someone, and get their opinion, that's all it is, for reasons stated above, the less I like it. Professionals, accountants, were hired to give information, if you believe that a select few should receive this information and the rest of us should accept hear-say from our reps you are mistaken.

Fact, misinformation or wrong assumption with regards to tax questions can harm people financially.

Question(I don't expect you to answer) Empty nest couple with rental property income, and large annual dividend and interest income. Will income generated from either of these sources be taxed by the Hong Kong or French Government? Will FedEx pay any portion of this? Better check before you vote. If you get an answer from the company, better get it in writing.

Remember, what you don't know will cost you.
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