Swan I appreciate your contributions as it made me go back and do some more research and while I haven't found anything particularly new and positive in terms of tax avoidance, it was a nice R&D experience into the latest trends in off-shore business practices. My posts on this topic in general basically boil down to: I have a firm belief, based on great American precedent, that you can't trust a strong central government. The problem is, we REALLY can't trust a strong central government in the kind of debt we find our existing one in. It is liable to do crazy things when it is put against a wall, things like seizing 401Ks, implementing capital controls (we are getting capital controls lite in 2013 already, it is law right now), devaluing the currency overnight, raising taxes to 90% for the top bracket, etc. Do these things sound implausible and unfathomable to many of you? Well here is the scary thing, there are 20th century historical precedents for ALL of the above many of which happened here in the USA. Pension (aka 401ks and IRAs nowadays) seizures are the one thing I don't believe has happened here historically but we saw it happen in Argentina in the last year or so. Although our government has done it in a round about way with the social security tax. I'm not a super doomer. I'm not a fairy tale believer either. I like the facts and empirical data. Too many Americans are operating on blind faith and blind hubris both of which are unwarranted at this juncture. I believe, in an effort for the government to deal with this mathematical certainty of default they have created, the scenario is going to play out approximately as such: 1. Aggressively close tax loopholes. If you are not a monster multi-national with a bag-load of lobbying cash or enough tax lawyers to keep the Feds bamboozled for the next 20 years in discovery, your loopholes are closed or you are going to be get audited eventually and the consequences could be dire. 2. Implement Test-Case Capital Controls. We have a light version of these coming into effect in 2013, see the HIRE act where they buried in this bill that you will be subject to a 30% withholding tax for trying to move any significant amount of cash out of the country: http://www.gpo.gov/fdsys/pkg/BILLS-111hr2487ih/pdf/BILLS-111hr2487ih.pdf 3. Implement full-blown capital controls so there is no escape when the 4th stage engages. 4. When the crisis hits, devalue currency, raise taxes, seize assets, and put this thing in a such a bad state that phase 5 seems like a real good idea. For most whose assets are still in-country or within reach, there is no escape from some level of harm in this phase. Everybody loses it is just a matter of how much. 5. With the circus in full swing, come to the rescue with a new currency. Use IMF and World bank to restructure debt agreements with powerful foreign creditors to deal with trade problems stemming from the default. Stability slowly comes back and the system is effectively "reset". 6. Credit expansion, new generation of suckers, here we go again!
TB80 ... I profoundly share your fundamental distrust. During the coming collapse of fiat currency governments the world over will attempt to salvage the old regime with astonishingly uneconomic policies that will only make matters worse. We are totally agreed on the chances -- nearly a certainty -- of insanity ruling the day. The ongoing question is how to anticipate and react to the insanity as it unfolds.
how far do you think you can trust some of the third world shitholes that some of these guys are talking about moving their money too?
If you read TD80's posts you quickly realize he is not the type of analytical thinker that will have either his capital or his person in some unstable venue. The others you refer to? They will never get past Cancun on spring break ... lol. For almost all of them this is simply conversation.
Reduce Taxes: Move and set-up shop in the U.S. Virgin islands. This works, only if you can start a business and hire at least 5 locals (I think it is only 5). There are several trading operations that have done this. Taxes are 5% on capital gains and you MUST reside in U.S. Virgin Islands for at least 6 months out of the year (non-concurrent). You must form a business that creates jobs for the local economy. Avoid Taxes: This way is more complex and involves trust. I know of a few that do this, but it is not worth it unless you are talking a million or more in capital gain income. While it is legal - it is also complex and costly to set-up. Several firms and even companies have set these up. So it is really out of reach of most traders or prop-traders. Old method: Of course there is the old tried and true ADR method from a decade or so ago. However, I think the IRS shut that door - I am not sure - but I remember those that did play that game. Mark-to-market method: Lastly - for mark-to-market, year-end con/rev also worked well and still does. However this is just delaying paying taxes. Move: Dart family gave up citizenship and moved to the Caymans. I actually personally know someone that has done this and moved to South America. So it works and they live and travel and enjoy life (and trade). However, they don't come back to the U.S. However, their answer was - the world is a big place. They spend time in Europe during the summer and South America during the winter. Of course they have serious coin to enjoy their freedom. The reality - it comes down to coin. You have it - you can BUY freedom. You don't you pay to play.
but don't you get free healthcare and a bunch of other goodies? does it cost money to attend college there?
it is not just 35 %......... a full time stock/options trader (no 60/40 LT/ST capital gains split as for futures trader) who makes 300k plus - from home or as a minority partner in a prop firm will pay the top % in federal income tax or 39% short term capital gains tax if you are filing as independant contractor plus state and city tax plus self employment tax. Schedule K1 of Form 1065 ---> 1040 Depending in which state you file you are looking at 40-45% total. Unless you are able to produce this kind of P&L consistently forget about trading as a profession since you will fail LT. Btw itemized deductions like hardware depreciation,data fees,internet,phone and magazine subscription will not help you a lot.
Yes, it's all free. University costs like $500 a year, all included. Healthcare is like free, all payed back. But why do I have a feeling that I payed more for it than you guys from the usa ?
i say that this whole idea on minimizing tax is flawed . the way i look at it the more tax i pay the better >>> all for obvious reasons ... im happy to pay my share , all it means is that im earning exceptional coin ... tight ass f#%*s get what they deserve ... how much do people actually want ... meglomanic significants ... how many gold taps do people need .. i say more than none is tooooooooooooooo many . its all good to be independently wealthy but this gangster type helicopter riding elitism does nothing for me ... you got plenty above realistic needs ... spread it around a&#holes ... greed is a disgusting disease ........ be nice and feel good