Posted on 07/05/2002 8:04:38 PM PDT by Action-America
Defending the American Dream
How the Wealthy Defend Against
Taxes, Tort and Terrorism
July 4, 2002
John Gaver
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As our elected representatives argue among themselves about how best to exert even more legislative control over citizens and corporations, in the name of "fighting terrorism", they fail to realize that just that sort of draconian legislation is actually brewing a virtually unseen crisis of terrifying proportions. Combine that with the effects of the terrorist attacks of September 11, 2001 and more data that we have uncovered and what you have is a recipe for disaster.
The wealthiest people in the United States - those who have achieved the American Dream - those who pay almost all of the taxes - those who are responsible for the vast majority of US investment capital - are leaving the United States large and growing numbers. This isn't news. We have known about the growing expatriation rate for some time and common sense tells us that it isn't the poor who are leaving. But, new data that we have uncovered confirms that it is indeed, the wealthiest Americans, who are being forced to leave. Furthermore, we can now expect to see this government induced capital flight increase dramatically in the near future, as a result of the growing media attention to this issue and the effect of the terrorist attacks.
This is a very serious problem, because as we have shown in previous articles, if only the top earning 1% of taxpayers leave (just over a million taxpayers), it will mean a loss of over one-third of income tax revenue, requiring a 50% tax increase for those who remain.
It would be a serious mistake to call those who are leaving, unpatriotic. After all, what could be more patriotic than defending the American Dream. In fact, all that they are doing is responding to a recent spate of oppressive laws, designed to punish the wealthy for having achieved the American Dream. If anyone in this equation is unpatriotic, it is our elected lawmakers, who are attacking the American Dream and forcing these patriotic Americans to defend what they have achieved, by taking it elsewhere.
Those who have followed our articles on Action America (http://www.ActionAmerica.org) in recent years are already aware of this disconcerting trend of government induced capital flight that has been growing like a cancer, just under the surface. But, rather than report on an issue and then just set back on our laurels, we're constantly looking for new sources of information that might indicate that things are either better or worse than first reported. The reason for this article is that we have, indeed, uncovered new information.
It's getting worse.
I'm sorry to have to say this, but it looks like the flight of wealth from our shores is much worse than originally reported; worse even than reported in our annually updated article on this subject, "Tick-Tick-Tick - The Economy Bomb" which you can find at (http://www.ActionAmerica.org/taxecon/ticktick.html). There are three new facts that point to this ominous conclusion. Actually, it is two new facts and one that has been around for a while, but it took some work to uncover it.
1) The major media is taking notice.
In recent weeks, I have read numerous news articles about how Congress is considering several different pieces of legislation aimed at preventing major corporations from reincorporating in offshore jurisdictions, in order to remain competitive with their foreign rivals and punishing those corporations that leave anyway. What those corporations are doing is referred to as corporate expatriation and is not only legal, but in many cases, necessary in order to stay competitive with their foreign rivals. But, it's not corporate expatriation that this article concerns. I only mention it, because it demonstrates that the media is beginning to take notice of capital flight issues.
In previous articles on the subject of capital flight, we have pointed out that even though the number of wealthy individuals choosing to leave the United States, for more wealth friendly climates, is increasing rapidly, the worst flight will not occur until the media takes notice of what is happening and draws attention to the problem.
Oops! The media is taking notice.
Granted, the current news is not about the government induced individual expatriations that represent a true threat to our economy, but only about corporations that expatriate and cause no real harm to the economy in the process, since their jobs stay here. But, if the media is now reporting the smoke of government induced corporate expatriations, how long do you think it will be before they find and begin reporting on the fire of government induced individual expatriations?
As the media tries to bleed every ounce of interest out of the story of corporate expatriations, it's almost certain that some industrious journalist, eager to make a name for himself, will soon stumble across the facts surrounding expatriation of wealthy individuals. After all, it's not that hard to run across that info, once you start looking. For example, let's just take two likely search terms that a journalist might use in such research and try them on the Google search engine (http://www.google.com). Since we are talking about "expatriation" and "capital flight", let's use those terms.
Note: To enter a two word phrase into Google, you need to quote the phrase. So, to see how easy it will be for a journalist to stumble across this information, go to Google and enter:
"capital flight" expatriation
On July 4, 2002, if you entered that search criteria on Google, you would have found that 11 out of the 42 listed links related to the increasing level of expatriation of wealthy individuals. In fact, 5 out of the 10 links on the first results page directly addressed individual capital flight and four of those were Action America articles.
Even dropping the quotes in the search does not significantly change the outcome of the search, other than increasing the number of results. One National Review article that was returned verifies, "As taxes continue to soak up a larger percentage of the GDP, the number of U.S. citizens moving out of the country is increasing". If National Review is reporting on this ominous trend, how long do you think it will be before other major news sources pick up on it?
The major media, in general, has not yet realized how serious this is. But, as you can see, it's only a matter of time. Whether the story is broken in the Wall Street Journal, on Fox News or through any other large news outlet, the other news organizations will jump all over it and the word will spread like wildfire. In fact, as pointed out above, it actually looks like National Review is beginning to take notice.
Many wealthy individuals are already aware of this flight, but have no idea how serious it is. Oh, most wealthy Americans know a couple of people who have expatriated, but they think that those expatriations were one-of-a-kind events and that expatriations, in general, are infrequent and of little concern. When stories about expatriations start showing up in the media every day, they will realize just how serious a problem it really is and start planning their own escape. ("Escape," by the way, is the common term used by most US expats to describe expatriation. That in itself, is a sad commentary on where our government has brought us.)
Other Americans, who are already in the process of planning to expatriate, will speed up their departure, knowing that in response to such news, the government will try to slam the door shut on expatriation. This additional boost in expatriations will certainly become part of the news, which will encourage even more expatriations and that cycle will continue until such time as the government really does close the borders. But as history shows, even that won't stop capital flight.
Unfortunately, our lawmakers are so obsessed with their own power and control, that they are unlikely to realize in time, that their attempts at control are only making matters worse.
2) New evidence proves it is the wealthy who are leaving.
As we have shown in previous articles, there is ample evidence of the growing number of expatriations. However, the amount of dollars concerned has been, until now, a matter of conjecture and projections. This new evidence actually ties dollars to these expatriates.
For many years now, Forbes Magazine has been publishing annual lists of the 400 Wealthiest Americans and the World's Billionaires. When most people look at those lists, they just look at the names and net worth of the people on the lists. But, we have discovered that those lists tell a much more important story, if you dig deep enough.
Since Forbes has been using the same basic procedures to build those lists for years, I got to wondering if those lists might reflect the same alarming level of capital flight that we, at Action America, have been reporting on. They did.
In fact, the Forbes lists show that since 1999, the number of US billionaires has dropped by over 13%, with a 7% drop in average net worth, while the number of billionaires worldwide has increased by over 80%.
Think about what those numbers say. Either wealth is leaving the United States at an alarming rate and moving offshore or wealthy people in the United States are losing huge amounts of money, while wealthy people in the rest of the world are making tremendously more money. It doesn't matter which explanation you accept, because if you accept the second scenario, how long do you think wealthy Americans will continue to stay in such an inhospitable business environment before adopting the first scenario. What it comes down to is that the land of opportunity no longer offers the greatest opportunity.
You won't find the above information quoted in any major media source. I had to take it upon myself to do the research. For your information, the lists that we used were the Forbes 400 Richest Americans and the Forbes World's Billionaires for 1999, 2000 and 2001. Since the information was not easily downloadable, we had to copy and paste the Forbes data for the last few years, from dozens of web pages, into a single worksheet. We totaled up the number of billionaires in the US and worldwide for each year, along with their combined net worth and used that to calculate an average net worth for each group. If you want to go to that effort (3 to 12 hours, depending on the speed of your Internet connection), you will come up with the same results.
By doing the research yourself, you eliminate a lot of the spin. This is especially true, when you use non-political data, such as the Forbes lists. Perhaps it is for that reason that nobody in the major media ever thought to use the Forbes lists in such a manner. I certainly don't believe that Forbes has been tweaking their lists to make a political statement, just waiting for someone to stumble across that data. In fact, such unbiased information from a non-political source soundly substantiates the information that we have derived from many other sources that might be considered political.
3) Since September 11, more people who can afford it, are leaving.
[Click here to read the rest of this article.]
Shall I send flowers, or will they accept a small check?
New data.
Shall I send flowers, or will they accept a small check?
No need to do either. As the article above shows, they are all moving to their new homes in Paradise, where they don't have to deal with the IRS.
Note that the reason that there are fewer billionaires in the US is because they are all being forced to move offshore, which accounts for many of the new foreign billionaires.
Just keep in mind that as more billionaires are forced to leave, those Americans who are left here will have to make up the difference in much higher taxes.
Not likely, and the second part there is why. Who will stand for such a thing? Why wouldn't I vote with my feet in the face of such a thing also? Hell, I'll just dig up the old family tree and go find some of my relatives back in Ireland, where the taxes are suddenly sensible...
Who will I get to fix my toilet, grow my food, and drive the big rigs over the road?
Worse yet, who will you get to pay the 56% of the taxes that the top 5% of income earners pay?
Don't pity the billionaires. They are the ones who are moving to Paradise. Pity yourself and all the rest who remain behind.
If just the top 5% leave, that means that you and everyone else who is still here will have to deal with a 124% tax increase, just to keep the military and services at the current level.
Terrible, just terrible. Who shall come to their aid?
Why wouldn't I vote with my feet in the face of such a thing also? Hell, I'll just dig up the old family tree and go find some of my relatives back in Ireland, where the taxes are suddenly sensible...
Well, general_re, it sounds like you are one of those who are lucky enough to both have enough money to move and the presence of mind to be prepared. I hope that you have your Irish passport already. If you can prove your Irish heritage within two previous generations, it is almost automatic.
I too, am prepared to move at a moment's notice, if need be. I just feel sorry for those who can't move.
It is not yet a certainty that the government will let things get that bad, but it certainly doesn't look good. Even though it would be a death knell to the economy, I would not be surprised if they completely close the borders to wealth some day soon, rather than give up some of their precious power, by passing less oppressive laws.
If Gates departs for Nicobar, to dwell amongst the tax-free cannibals, where will you get bug-fixes for Microsoft .............. never mind.
-- dighton, vacillating between the Light and heresy.
Jeez, then we're completely f****d. Please reconsider.
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