How to Protect Your Income from Taxation?

I didn't post this to get involved in some ideological debate as to the validity of various tax systems, merely posted a couple of methodologies and responded to state that wealthy on net leave this nation and the nation continues to find ways to keep them from leaving or charges them (via taxes) to do so.

This post is about protecting your income from taxation, not the ideological merits of the tax system.

However, I believe that is a novel debate - probably best posted in its own thread. Of which, when time affords, I would be happy to comply with my own thoughts on the subject.

 

The downsides are debatable. Do you honestly believe that those millionaire that choose to live in Switzerland, Monaco, or a host of other nations are significant to a point of not being worth it?

John Templeton MAY have said he regretted it, who knows if he did or his reasons for making such a statement. The simple mater is he always has a choice to return and since he hasn't that should speak volumes of that regret.

On the other hand how many of the wealthy regret staying? Which is equally a valid question. This is all conjecture and circumstantial, with no basis of validity.

The world is a big place, everywhere has advantages and disadvantages. We can only personally rate those as per our own social and personal values - be it climate, taxes, religious, cost of living, or a host of issues.

However, there does come a time when the tax rate on income (capital gains) begins to out weight the other personal advantages/disadvantages.

Simple example, living in California and paying $100k in state taxes worth it, versus having residency in Incline Village, Reno and saving that money? One can still own a home in California, in such a structure to garner the advantages of Prop-13, but avoid the nasty state income tax. The question one must ask themselves is $100k worth the effort and hassle. To some - no and others yes.

Take that to a grand scale. If I pay $400k in federal tax, but could live abroad and pay next to nothing - is that place of residency worth the hassle.

It comes down to an individual decision, there is no right or wrong answer.

Of course we could get caught up in political rhetoric and ideological drivel and ignore the role of government, by replacing the "rights" with what we believe is the moral "need" - and thus the need for MORE taxes for a host of MORE programs. I personally hating down the road.

 

A tax rate of 15-35% is not a massive infringement of liberty. ..............

I can only repeat myself here : get your numbers right

 

And you are?

To tell me that 35% tax rate, property tax, sales tax, and state tax are not a "massive infringement" of liberty?

When you start paying 6 digit in taxes, with crappy roads, expensive private schools and universities, poor public schools, local government failures, cuts in emergency services, and into a host of programs that you pay into but do not receive benefits from - then and only then - get back on your horse.

 

Which observation of mine was incorrect - that potential net profits are higher in the 1st world major economies? Or that tax havens are generally less free societies than places like the USA, Canada, Australasia and Western Europe? Or that tax havens have less rich residents than the world's major economies? AFAIK all those 3 claims are true, and you certainly didn't supply and evidence to refute them.

Of course, a country with over 300 million citizens will see more numerical outflow than one with 8 million like Switzerland, or one with 30,000 like Monaco. That proves nothing other than that there is a large population disparity. 30 people emigrating from Monaco each year would be a 0.1% expatriation rate. The same rate in the USA would be >300,000 people. I don't know the exact figures, but I seem to recall renunciations running at a few thousand a year, maybe 10,000 at the higher end? I.e. 0.003% or less - hardly a deluge. And most of them will be back, and most who don't return will regret it, like John Templeton. Whereas those that go the other way, like George Soros or Rupert Murdoch, don't seem to regret taking up citizenship.

What about members of the Forbes 500 - how many renounced US citizenship, versus how many gave up a foreign citizenship to become American? That would be a very telling statistic. For every billionaire who leaves (how many?), there are others who go the other way. The US is a very attractive destination for rich foreigners, and a 15% CGT and dividend tax rate ain't going to put them off.

 

You should be happy to have roads, schools, emergency services no matter the quality. Most countries don't have them.
Beside you can go out without hiring body guards. You can travel without paying bribes every 60 miles. You can buy property, get a license plate and get a fair trial without paying a bribe. You have property right an no random expropriations. It isn't the case in all countries. Thats what you pay the 35% for.
The infrigment to liberty would be not having all of these.

Ninna

 

I was addressing TD80 who said he was an investor. I wasn't talking to you.

 

Hello? And what planet do you reside on. I have lived in Asia and Europe, have traveled extensively around the world. Yeah they have emergency services, roads, and schools. You are just being silly or trolling - I can't tell.

You obviously have never ventured beyond 30 miles of your home.
This is typical of ideologues and ignorance.

Buy a plane ticket and go overseas - I am happy to provide a list of 1,000s of cities in which the quality of life is just fine and you don't need a body guard or have to bribe people.

And I thought the sheeple were banned from posting on these forums. I guess I forgot why I stopped posting on here - ug.

 

Of course it is a judgement call, as is any major life decision. But it is perfectly legitimate for someone such as myself who has moved country to a place he pays virtually no tax, to comment on his experience, and warn someone less experienced of the potential downsides. This has nothing to do with conjecture, rhetoric, or ideology, it is simply real world experience from someone who has walked the walk, so to speak.

You may have heard the saying "the grass is greener on the other side of the fence". It is the duty of those who have been on that other side, to inform people about the realities, and how they differ from the expat fantasies that so many Americans and other 1st world residents like to dream about while they moan about their privileged existences.

I describe what I experience. If it was all great, I would be posting here encouraging people to do it, rather than mostly the opposite advice.

 

I am "overseas".
Here are some places you should visit before understanding how lucky you are to be in a country where you pay 35% taxes (I personally pay north of 50% and I wouldn't move for any sum of money): north part of south america, south africa, some parts of west africa, north africa (try driving there for more than 60 miles without meeting a "friendly policeman" who cares about "your safety"), places east of turkey up to azerbadjan. Asia is fine except Myanmar (of course) and bangladesh.

Ninna