When one needs a model to see the affects of the Democratic Party's socialist agenda, they need only look at countries like Sweden, France, Germany and, closer to home, Lousiana to see the devastating conditions created by an overly intrusive government, bankrupt social programs and a growing dependent class that is under-educated, illiterate and generally unemployable for most jobs beyond Burger King.
So where then do we look for the alternative? Where is the model of limited government, freedom and self-reliance that real conservatives long for? The US? Hardly, you have to travel almost to China to find it.
The proposal to rescind America’s “estate tax” fell three votes short on the Senate floor last week.
Most citizens don’t care, and for good reason. The estate tax generates a little more than 1% of all U.S. tax revenue. The tax only affects 0.5% of Americans.
But those affected care a great deal. They potentially face a 55% levy on transferable assets. And a majority of this money has already been taxed in one form or another.
Think of it this way… Warren Buffett, whose net worth is estimated at $40 billion, faces a $22 billion dollar bill from the IRS at some point in the not so distant future. Now it’s pretty well known that Buffett frowns upon the practice of passing great fortunes from generation to generation. It’s also worth noting that steel magnate Andrew Carnegie supported the estate tax as well.
But many of the world’s wealthiest families don’t share this sentiment. In fact, they spend great sums of money avoiding it. According to the House Joint Economic Committee, “The $23 billion in revenue it raises is illusory, since estate tax avoidance activities likely generate equally large revenue losses under the income tax.”
“Teddy Roosevelt argued that the transmission of vast fortunes between generations threatened to create a permanent aristocracy and, moreover, ruined the characters of the undeserving heirs.”1
Say what you want. Personally, I could not care less if an heir or heiress (you can enter a name here) can buy 10 Porsches or 100. It doesn’t affect my daily life all that much... unless, of course, I own Porsche stock.
But if you’re interested in an investment vehicle that may capitalize on the substantial market of circumventing government-imposed wealth redistribution, consider this. Money will flow where it’s treated best. And I think you’ll be hard pressed to find any other place in the world that treats money better than Hong Kong.
The highest tax bracket comes in at 17%. Individuals are only assessed on annual employment income. Dividends and capital gains are not taxed. Like many progressive tax systems, Hong Kong grants allowances for certain deductions like charitable contributions. When you consider that Hong Kong provides arguably the world’s greatest municipal services in a relatively crime-free environment, you are unlikely to find a more favorable tax policy anywhere in the world.
And like the low personal tax rates, Hong Kong’s estate tax holds a maximum rate of 15% on assets exceeding US$1,350,000. So when Li Ka-shing, the world’s tenth richest man, looks to pass on his $18.8 billion, he’ll do so under very favorable circumstances.
And here’s the kicker…
Hong Kong recently repealed its inheritance tax on property. Consequently, many Hong Kong property owners (U.S. citizens who own Hong Kong property are still taxed under U.S. inheritance laws) are now able to pass down real estate assets without any tax liability whatsoever.
It’s no wonder 21 billionaires call Hong Kong home. Hong Kong is the land of the rich. And I’m not just talking a few scattered billionaires. One in seven adults living on Hong Kong Island can claim the exclusive title of being a HKD millionaire. In fact, according to a Citibank-commissioned survey reported in the South China Morning Post this February, Hong Kong millionaires have roughly $4 million ($512,821 USD) in liquid assets, on average. And of those assets, one-third of that amount sits in common, low-yielding bank accounts.
Hong Kong is still the gateway to China. And over the long run, it should continue growing in step with China’s projected growth for decades.I believe Hong Kong will become a tax haven for the new class of super rich. Its skyline competes with Manhattan, its weather compares with Miami, Disney has just moved in across the harbor, and Macau – the Las Vegas of Asia – is just a 45 minute boat ride away.
What’s not to love?
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