``You are not comparing 35% with 0%, you are comparing 15-28% (LT capital gains/dividend rate, blended futures rate, taking advantage of various tax planning measures) with 15-20% (typical tax rate in low tax countries with actual civilisation and proper societies. `` For the little guy this may be true but unfortunately the more you make the less appealing is the trader status in the US compared to foreign alternatives. I don`t know what you are smoking but I am NOT paying 15-28% taxes in the US as a trader (K1) with more than 400K of net P&L. Before I relocated I used to pay over 40% (federal,state,city and self employment tax). I have a six figure net savings every year and I fly back as many times as I want. GET YOU NUMBERS RIGHT
That's right. It's awful how cheap it is to run this business...LOL. However, my advices on deductions : - When you are looking for a vacation, choose a place where there is a trading seminar/expo, pay for it and attend it even if it is just to have a proof for the tax officer. It will take you 1 morning of your vacation week but you can deduct plane tickets and hotel. - If you are a traveler and like to work from different places, take 3-6 months to trade from a known financial center outside your country, possibly the one where you are supposed to trade. Deduct everything: Plane, Apartment, office,restaurant, transportation... -When you are buying an office item, just go for the best, even if it is more pricy. Example: You are hesitating between a 800$ laptop and a 1400$ one. In reality, you are hesitating between a 1100$ one and a 1400$ one as the money you won't spend will be taxed 50% or so. So just go for the best. ...
No one suggested becoming the citizen of a tax haven. After all, it's not citizenship that determines your freedom, it is the laws in the country you reside in. A US or UK or Swiss citizen in Dubai is just as unfree, if not more so, than the locals.
Agree 100%. Watching US resident traders bitch about taxes is like watching 6'5 basketball players whine that they aren't tall enough. I thought the Brits were the world's biggest moaners, but recently the US is certainly giving us a run for our money.
I find you observation incorrect. We have had a collective out flow of millionaires out of high tax countries (including the U.S.) - the increase in residency in Switzerland, Monaco, Andora, Hong Kong, Caribbean, and a host of other nations state that those with higher income move. Those that don't move out of the U.S. have complex tax advantages. Check out how many major US companies are domiciled off-shore - lots. Sure we have new millionaires every year, but as far as flow - it is out-flow not in-flow. Think about the migration problem. You don't have wealth Swiss trying to obtain residence in this country, you have poor people. Migration is a combination of opportunity and taxes. Corporate U.S. has been moving out of this country for years in search of cheap labor, less hand-cuffing regulation, and of course lower taxes. The U.S. has one serious difference between nations of the world. The U.S. is the only nation that taxes you on your nationality and not residence. If you are a U.S. citizen no mater where you live, you still have to PAY U.S. taxes (minus the initial off-setting amount). That is double taxation. If you are Swiss, German, UK, of most other nations you do NOT pay tax back to your national country if you reside abroad, you pay taxes based on residency. The reason that Dart and other wealthy people give up citizenship is to avoid the national taxation law. If they instead used the residency system that the rest of the world did, you would not have the exodus of expatriation.
I guess if you measure it by net population it IS a trickle, if you measure it by LOSS tax revenue to the Western Nations is a FLOOD. Remember it's a progressive tax system, 1 billionaire leaving a high tax nation = how many mean income tax payers? It was bad enough that Clinton had to sign into law a tax expatriate system, to slow the tide. Which is constantly ramshackled as more leave. I know 2 personally that left prior to Obama taking office, concerned about the tax repeal. Both now live in Europe. So you are right, it is a few when measured against the population - but measure by capital and the story changes.
An informative article about expatriation: http://www.forbes.com/2010/03/23/ex...acare-personal-finance-robert-wood_print.html Worth a read. Obvious if it wasn't a problem, there wouldn't be a law that has been revised in 1996 and again in 2008.
the law is nothing more than a withholding tax for hi net worth people. the government wants you to mark to market if you leave. why should someone be allowed to spend their whole life in the us as lets say a real estate tycoon and build a billion dollar estate of realestate holdings tax free and then when he is ready to sell be allowed to leave the country,then sell,and escape all taxes?
It's nothing to do with morality. It's to do with finding it laughable that a US trader/investor is pleading 'woe is me' over taxes, when most people in the USA and abroad are suffering far more from the much higher taxes they have to pay. Your complaint is intrinsically laughable, like someone on a cancer ward moaning about having a cold. It is not a hypothetical situation, many people have done it. The problem is, there's a lot more to life than economic and security interests. There are real downsides to living in a tax haven, several of which have been pointed out on this thread. Hell, there are real downsides to simply moving to a foreign country, even a 1st world country where everyone speaks the same language as you. For the vast majority of those people, those downsides turn out to be more important than the benefit of paying very little tax. Even John Templeton, who took UK citizenship (one of the best in the world to have) and emigrated to the Bahamas, during a time when US tax rates were *much* higher than they are nowadays, said that he regretted it. And I am pretty sure he saved a heck of a lot more on taxes than you or I would. I've also moved and lived abroad and paid very little tax, although I did so not exclusively for tax reasons. My conclusion is similar - for anything more than a year or so, it is simply not worth the trade-off, unless you would want to live there anyway for its own sake. The benefits of life are far greater than the benefits of a higher compound rate of return. These are experiences and lessons from people who actually did what you are (I presume) merely talking about. Maybe it would be wise to listen?