Expatriation: Not Just for the
From the Soveriegn Society...
Treasury Secretary Tim Geithner said in a speech this week that keeping current tax levels -- even on a short-term basis -- “would hurt economic recovery by undermining confidence that we are prepared to make a commitment today to bring down our future deficits.”
The U.S. Treasury estimates that allowing the Bush tax cuts for the wealthy to expire could add nearly $700 billion to the economy over the next decade.
But at what cost, in the meantime, as the country stands to lose more and more of its high-income earners and investors who are seeking refuge outside the United States?
What Will YOUR Next Tax Bill Look Like?
“Soak the Rich” is the theme du jour. From the United States to Athens, big-spender governments are scraping for tax dollars. And they’re looking to “New Deal- style taxation to fill in the deficits.
America’s rich are facing their biggest tax hikes in history come Jan. 1, 2011.
But that’s not all…
We’re also looking at an assault on the middle class.
Average Joes struggling to pay increasingly unaffordable mortgages on homes worth less than they owe … unable to save for a rainy day or kids’ college funds … concerned they may not have a job tomorrow … are also facing their biggest tax hikes in history.
Soak the Rich;
Squeeze the Middle Class
If the “Bush tax cuts” expire at the end of the year, tax rates for every bracket will increase. It’s not just the wealthy who will be impacted -- the middle class will find itself being squeezed as well.
Tax on dividends will jump from 15% to 39.6%. Capital gains, 15% to 20%. And the death tax will be given new life at 55%.
The child credit shrinks and the marriage penalty gets worse -- war on the average American family?
If you work hard -- whether you’re a billionaire, a small-business owner, or a cashier -- the U.S. government wants to squeeze everything it can out of you.
At worst everyone will suffer tax increases.
And at best, they’ll extend the cuts for households earning less than $250,000 per year but let the cuts expire for those earning more. And this is still an assault on your average middle- to upper-middle class family.
If you run a small business earning $250,001, you’re taxed the same as a movie star making $25 million a film!
There’s just no difference between the hard-working middle- to upper-middle class family and the very rich in the eyes of your government.
So what’s an average American to do?
Fair Weather Patriots
Well, I know that many Americans are scandalized at the thought of anyone surrendering their U.S. citizenship – that’s unpatriotic, they say.
If you’ve been a reader for long, you know there are very substantial tax savings for wealthy U.S. citizens who are prepared to end their citizenship.
In 1962, the late John Templeton, respected international investor, businessman and philanthropist, surrendered his U.S. citizenship to become a citizen of The Bahamas. This saved him more than US$100 million when he sold the well-known international investment fund that still bears his name, not to mention millions more in U.S. estate taxes.
But increasingly, regular folks are choosing to make this move as well, and not just for tax purposes.
I know from experience that many Americans see ending U.S. citizenship status as the means to escape government tyranny. Tyranny in the form of unconstitutional violations of our rights, constant surveillance, destruction of personal and financial privacy.
And certainly, increasing taxes to finance bankrupt spending policies and the welfare state is now a more compelling reason than ever.
According to a recent Financial Times article, the U.S. Embassy in London has a large and growing waiting list of Americans wishing to relinquish their citizenship. They are seeking shelter from the IRS.
The waiting list has Americans on hold until February, when the earliest appointment is available. This is because an unprecedented number of Americans living in the UK are looking to end their U.S. tax responsibilities abroad once and for all, ahead of the huge tax hikes now in the works.
But it’s not just the U.K. Embassies across the globe are swarmed with Americans hoping to begin the same process.
Taxation Without Representation?
We all know the phrase. A slogan that originated during the 1750s and 1760s and one of the main causes of the American Revolution. Americans believed that a distant government taxing them from afar was unconstitutional. You still see it on the license plates in Washington, D.C.
Now, almost alone among the nations of the world, American tax law imposes income taxes on U.S. citizens and resident aliens ("green card holders") no matter where in the world they actually live and without regard to where their income is earned.
The United States is unlike most countries which enjoy territorial tax systems -- meaning taxes are imposed only on income earned within their national borders. Thus a Canadian or an Englishman can move out of their home country and legally avoid most domestic taxes.
That underscores a major point we repeatedly explain here at The Sovereign Society – the only legal method by which U.S. citizens and permanent resident aliens (green card holders) can end their U.S. tax obligations is to end their status as U.S. persons – a process called expatriation.
What About You?
Whether you are in the highest tax bracket, or somewhere in the middle, your government is planning to squeeze you for all that they can.
You can fight back. But there’s only one legal way to do it.
If you think expatriation could be for you, the first step is to choose a new jurisdiction and apply for citizenship. There are a number of ways one can gain citizenship. You can contact the embassy of your country of choice, or check out my Passport Book, a complete guide to each citizenship option for 80 desirable countries.
If you don’t like the ever-increasing tax rates that big government is forcing upon you, you can join the many Americans who are voicing their opinions loud and clear by voting with their feet.