Posted on 04/20/2002 12:50:10 PM PDT by Action-America
(It's starting - The media finally takes notice of IRS induced capital flight / my title)
By NELSON ANTOSH
Copyright 2002 Houston Chronicle
Five Houston companies are racing the clock to move their places of incorporation to a pair of offshore tax havens.
The companies -- four in the oil and gas service business and one a manufacturer, Cooper Industries -- see reincorporating in Bermuda or the Cayman Islands as a way to cut their income tax bills, which rewards shareholders and makes the companies more competitive.
Cooper has predicted that the move would increase its cash flow by $55 million a year by cutting its tax rate from 32 percent to the 20 to 25 percent range.
While the companies argue that they need to be able to compete with firms based in countries with more favorable tax rules, the rush offshore has drawn a hostile response in Washington.
In addition to Cooper, the Houston companies looking to change are Nabors Industries, the nation's largest driller of oil and gas wells on land; Noble drilling, a major offshore contract driller; Weatherford International, a provider of oil-field services and equipment; and Veritas DGC, a seismic company, whose services help find oil and gas.
All of a sudden, the firms, which will still have their headquarters in Houston, are on politically perilous ground. The politicians see this as an unpatriotic move that could sap the country's tax base at a time when deficits are again looming.
A bill with bipartisan support, which was introduced April 11 by the Senate Finance Committee, is designed to eliminate the tax advantages these companies are hoping to achieve.
Ranking committee member Chuck Grassley, R-Iowa, and Chairman Max Baucus, D-Mont., want to stem the reincorporation tide by amending the federal tax code.
"These expatriations aren't illegal. But they're sure immoral," said Grassley.
They want to stop reincorporations retroactive to March 21, when the senators warned companies thinking about moving to tax havens that they would do so at their peril. Their bill, known as the Reversing the Expatriation of Profits Offshore Act, would not reverse transactions completed prior to that date, however.
Despite concerns about lost tax revenues, the trend to moving offshore is accelerating, involving big industrial firms such as Ingersoll-Rand and Stanley Works.
Some Houston oil-field companies got in ahead of the deadline. Transocean Sedco Forex, the world's biggest offshore driller, became a Cayman Island company in May 1999, when it was still just Transocean Offshore, said spokesman Guy Cantwell.
GlobalSantaFe, the second-largest, became a Cayman Island company last November through the merger of Global Marine with Santa Fe International, which has been incorporated in the Cayman Islands since 1990, said spokeswoman Stephanie Price.
Those that are still trying to get to get their domicile moved must win the approval of shareholders. The actual reincorporation takes only a few days. They are hoping to be in Bermuda or the Caymans before the end of this quarter.
Oil-field companies are at the forefront because so much of their business is already offshore, and that percentage promises to grow as the reserves in the United States are gradually depleted.
They say they need to cut taxes to keep up with competitors based elsewhere, and even with at-home competitors who enjoy the tax advantage.
A "me too" scenario emerges. Noble needs to do it because Transocean and GlobalSantaFe already have, said John Rynd of Noble Drilling.
While countries such as Bermuda have no income tax or capital gains tax, the companies incorporated there still must pay taxes on their profits earned within the United States.
"The United States is the only place in the world that taxes corporations and individuals on income no matter where it is generated," says financial analyst Jim Wicklund of Banc of America Securities.
This means they pay tax in the Middle East or Brazil, if that is where the rigs are working, and again pay tax on that income in the United States.
This amounts to double taxation, said John Breed of Cooper Industries, a major manufacturing company whose products range from Crescent wrenches to Halo lights.
The proposed law would eliminate the tax advantages of reincorporating by telling the IRS to do a "substantial business activity test."
The company would have to answer the question: Does it have significant assets, employees or real property in its new corporate home, or is it just a manila folder in a filing cabinet? If it flunks the test, it would be considered a U.S. company for tax purposes.
The lawmakers call reincorporation an inversion, in which the U.S. corporation forms a subsidiary in a foreign tax haven. Then the subsidiary becomes the parent, thus "inverting" ownership.
Next, the shareholders of the U.S. corporation exchange their shares for shares in the foreign subsidiary.
Such transactions to level the playing field historically have not been an issue, said Jack Allender, a tax lawyer for Fulbright & Jaworksi. The ability of some foreign companies to go beyond that is what has got everybody's attention, he said.
One way to do this is by using the overseas operation as a bank -- lending capital to the U.S. operation and thereby creating deductible interest expenses that wouldn't have been available if they hadn't made the move.
The proposed law calls such finessing of the tax code "income stripping," and would require IRS approval for a period of 10 years on such things as third-party interest deductions, transfers of intangibles and cost-sharing arrangements.
Shareholders have the last say, but nobody knows of a reincorporation that was voted down.
Weatherford International will vote on moving its place of incorporation to Bermuda shortly after the annual meeting on June 26, said spokesman Don Galletly, who sees little sign of shareholder opposition.
"I think the vast majority see this as a long-term benefit to the company," he said. Almost 65 percent of the company's income now comes from outside the United States and that trend is expected to continue.
Cooper Industries is one of the few companies to furnish numbers on what there is to gain from reincorporating, because this has become a political issue.
Since it is impossible to predict what will happen with the legislation, the company decided to press ahead on Bermuda, said spokesman John Breed.
Having started the process last June, Cooper Industries should have been in Bermuda by now but for the delay caused by a takeover offer from Danaher Corp. last August. The vote is scheduled for May 14.
Moving requires a review by the Securities and Exchange Commission. U.S. accounting standards and disclosure regulations must be complied with in order for shares to be traded on the New York Stock Exchange.
Nabors Industries decided to move to Bermuda on Jan. 2 and completely missed its target date of April 15, mainly because the SEC is making such a lengthy review, said spokesman Dennis Smith.
The SEC randomly selects some applications for a more extensive review than others, he said. Nabors is now tentatively planning for a shareholder vote on June 13.
Noble Drilling had about 60 percent of its assets in, and derived 70 percent of its revenues and 80 percent of its net income, from international markets during the first quarter, said spokesman John Rynd. Its vote on moving from Delaware to the Cayman Islands will be held during the annual shareholder's meeting on Thursday.
Veritas DGC, which is in the process of merging with Petroleum Geo-Services to form the world's second-largest seismic company, chose the Cayman Islands as a sort of compromise, said Mindy Ingle of Veritas.
The definitive merger agreement probably won't be signed until the end of April, and a date for voting on reincorporating can't be scheduled until after that.
"It's not 'IRS induced.' It's 'Congress-induced.' "
Granted. Congress passes the laws and is behind the whole thing. But, it is the IRS that wealthy expatriates generally cite as their reason for leaving - not Congress nor the level of taxation, but the IRS. That is why I use that term.
Their concern, I have learned, is that their entire fortune can be confiscated with a single signature of one non-elected bureaucrat at that agency. As pointed out in the above article, the United States is the only country in the world that taxes corporations and individuals on income no matter where it is generated. That means that not only are your US based assets at risk, but your foreign assets are at risk, as well. By moving offshore and spreading your wealth among several countries, it becomes close to impossible to lose everything due to a single event.
Incidentally, I have been encouraging my readers for years, to develop and maintain an exit strategy, just in case. I began developing my own exit strategy in 1994, when I first became aware of what was going on. But the thresholds that I had set to trigger my exit strategy were so far beyond what was reasonable to expect, that I felt certain that I would never have to implement it. Today, things have become so bad that those once extreme thresholds are not only, no longer extreme, but well within the realm of possibility.
Congress induced or IRS induced makes little difference. The wealthy are being forced to leave. This does not make them unpatriotic. In fact, if anyone in this scenario is unpatriotic, it is the lawmakers who are passing the laws and the IRS agents that enforce the laws that leave the wealthy no other choice, than to take all of their money and expatriate.
"Now who is really getting screwed, we lost our jobs, we lost a major corporation and we still buy this crap."
It almost sounds like you are blaming the corporation that moved offshore. Remember that the reason that these companies are moving offshore is because our tax laws are giving them no other choice. Remember that the companies mentioned in the above article are choosing to leave, even in the face ot legislation that will actually punish them for leaving. They want to be gone before things get worse than they already are.
It isn't a crime or even immoral to do everything you can, within the law, to protect your assets and income from possible confiscation. These companies are leaving now, because the way things are going, if they don't leave now, they may soon find that US taxes have become untenable, but that in the mean time, newer, even more abusive laws have been passed, making it nearly impossible to leave. The only choice then, would be bankruptcy.
You can boycott those companies if you want, but it will do no good. In almost all expatriation cases, the companies involved have very large offshore sales. Furthermore, many US companies that have not traditionally had large offshore sales are now working hard to develop significant offshore sales. Makes you wonder if maybe they don't expect the market in the US to remain viable for very much longer. No. The answer is not boycotts.
The answer is to vote out any Congressman or Senator (Democrat or Republican) that continues to support the current tax system, or any tax system that will require the IRS or an agency like it. That includes the flat income tax, which will still require the IRS. The only tax alternative that is currently on the table, that would actually reverse IRS induced capital flight, is the National Retail Sales Tax. Every other alternative amounts to nothing more than rearranging the deck chairs on the Titanic.
The way that the Japanese upstream is for their American companies to pay big "consulting fees" to their Japanese parent firms. Those consulting fees are so large that their American subsidiaries make almost no profit each year.
No profit, no income taxes.
That's the angle that the socialists can't figure out. They want to punish the wealthy and redistribute funds, but their income tax only works when evil capitalistic corporations are making a profit.
So companies pay big foreign consulting fees in order to reduce their official profit in the U.S.
Of course, the same people own the foreign corporations that are recieving those consulting fees, so the net effect is that money made in America is being sent overseas without ever being taxed.
Over time, all businesses will tend toward this model. It is the natural response to taxes on income.
The sales tax is therefor inevitable. The only variables are How Long it will take before Congress replaces the income tax with a national sales tax as well as How Much pain Congress will inflict trying to keep the income tax before that point in time is reached.
I agree. And this is essentially what the Value Added Tax does. For example, if the tax rate is 15%, and if you buy something for $50 and sell it for $85, you pay 15% on the difference. The first seller would pay 15% on the first $50.
I don't like the VAT tax. It imposes too many complications. The seller must keep records of how much he paid for each thing, calculate the value he added, and then apply the tax rate. Easy enough for the seller, but it makes the auditor's job more difficult. You have to know the cost of every material at the time bought. In the European system (the only VAT I know of) there are exceptions and the code keeps getting longer and longer.
I want a code that is easy to implement, easy to understand, and easy to audit.
We can fix it. What we need is an Amendment for Taxes and Funding. [1] Abolish all forms of duties, taxes, levies, and excises other than a sales tax. [2] Set the tax rate at 10% federal, 10% state, 10% county. [3] Forbid any exemptions, exceptions, or exclusions.
I know taxes will cascade on some items. The cascade wouldn't amount to much compared to the burden of reporting, remitting and keeping records on all the other taxes now used. Once a month the seller would report sales and remit ten percent of that amount to each level of government. An audit would only have to check how much sales were. The tax code would be the size of a small pamphlet. Everyone could easily understand the process. That is my aim - simplicity.
It is not that complicated. You don't need to keep track of every item. Just add up the sales in aggregate, subtract the aggregate purchases used in production, and apply the tax rate to the difference. (OK, so I know the politicians will make it more complicated than that.)
At least it doesn't offer all the opportunties for manipulation that the income tax does, e.g. deciding what is capital versus expense, depreciation rates, considering various depreciation schedules, etc.
A VAT will lead to a hopelessly complicated tax system. It will get more and more complicated as the years go. The VAT was born in France in 1954. Or look at the EC. See how complicated it has grown in 50 years. Soon it will be as complicated as our own code.
Can you name for me a scenario in which a 10% markup will drastically increase costs? I am interested in the idea that to compute VAT you would add sales and subtract purchases and tax the difference. What happens if you buy more than you sell? Would you pay no tax? How do you distinguish between consumption for sale and internal consumption?
I would be happy to support a VAT if they would eliminate the income tax. The only new tax suggestion I don't like is the flat income tax. Ugh.
"Nothing immoral about robbing the national coffers of funds to support and maintain a powerful military and infrastructure?"
That statement only tells us that you are one of those who cannot leave and therefore feel a need for such an infrastructure. A person who chooses to protect his wealth from an out of control government, by leaving, is much more interested in supporting the infrastructure of his new and more free country.
"Nothing immoral about putting profits about national loyalty?"
Such a statement is a poor attempt to mislead, while completely ignoring the real issue.
In fact, corporation officers in the United States are LEGALLY obligated to take all reasonable legal measures possible to obtain the greatest amount of profit for the company's stockholders. They are protected under the corporate veil, ONLY as long as they make such reasonable efforts, even if their efforts fail. To fail to make such reasonable efforts would lift the veil of corporation and they would then become liable to stockholder suits against them.
It seems clear that all of the companies listed in the above article will reap substantial profits by reincorporating offshore. Therefore, to fail to present that option to stockholders would make them liable to stockholder suits. Also, keep in mind that the board cannot make that decision alone. It requires stockholder approval. And, as the article points out, "...nobody knows of a reincorporation that was voted down." The stockholders are making that choice.
The fact is that it is not the directors of the expatriating corporations who are immoral. It is the lawmakers who create a web of laws that place those people in a no-win situation. The corporate officers either fail to do their jobs and become legally liable or do their jobs and make a decision that will send their company's profits offshore.
It is our lawmakers who have forced company executives into that position.
Those executives have no choice.
If you want to suggest that someone in this scenario is immoral, don't look at the executives. Look at your elected representatives, instead. If they support the income tax (progressive or flat) or support wealth punitive legislation, then they are the immoral ones. If, on the other hand, you knew this and still voted for them, then I suggest that you go find a mirror.
There is a scene in the movie BLOW which you should watch before you consider sending your first penny overseas. In that scene, the star drug dealer goes to withdraw his money from his Panamanian bank account, only to be told by his banker that his money has been appropriated by the government, but oh we're really sorry.
Taken in that light, you aren't paying income taxes so much for government services as you are paying for American protection against your funds being confiscated. Of course, I'm sure that there are dangers of that happening even here, but it is a daily occurance overseas.
"Taken in that light, you aren't paying income taxes so much for government services as you are paying for American protection against your funds being confiscated. Of course, I'm sure that there are dangers of that happening even here, but it is a daily occurance overseas."
Actually, your information is woefully out of date (about 10 or 15 years).
To begin with, today the United States government confiscates more dollars, per capita, than any other western style democracy in the world. The reason is simple. The United States claims the right to ALL of a citizen's assets, regardless of where in the world those assets were acquired or where they are domiciled. Furthermore, one agency or another of the US government makes such confiscations on an almost daily basis and without due process or a follow-up conviction. That means that as a US citizen, your entire estate is at risk every day. See Forfeiture Endangers American Rights (FEAR) for a chronicle of just some of the more blatant confiscation abuses of the US government.
On the other hand, even the most tyrannical of foreign governments never attempt to seize assets outside of their own borders, unless of course, those assets were stolen from the government or the royal family. Even if they wanted to, they don't have the power. That means that the most that you can lose by any single event is what you have invested in that one country. Moreover, confiscations by foreign governments rarely happen outside of three contexts - court ordered seizures as a result of a conviction, violent revolution and the number one reason - pressure from guess who... the US government, wanting the assets of US citizens. But, if you are crazy enough to have invested your money in Venezuela...
In fact, most of the favored tax haven nations have very stable parliamentary governments. Furthermore, a large number of them are members of the British Commonwealth, adding significantly to their political stability. Many others have similar ties to France, Holland and other well established nations. In fact, if you have enough Irish blood, you can get an Irish citizenship almost immediately and you will find that Ireland is considered to be a tax haven nation. Another member of the Commonwealth that is very stable is Belize. They got their independence in 1981 and they are very protective of their sovereignty. They take severe offense to other nations trying to tell them how to run their government. As a result, privacy laws in Belize are among the best in the world right now. Bermuda is also very stable, although it is somewhat expensive to live there. And, those are just a few examples.
I really suggest that you check out the Escape Artist web site for their country profiles.
Also, check out the Action America links page for more links to expat related material.
As for upstreaming, it is very illegal, unless you are a foreign citizen. If the IRS ever tracks the ownership of the offshore company back to you, they will fall on you like a ton of bricks. True offshore entities, on the other hand, use upstreaming to gain great advantage over US companies. When US companies use that tactic, they must limit the offshore payments to realistic and justifiable amounts or risk losing large sums of money to IRS confiscation, should the IRS decide that it is upstreaming. Some US companies do upstream in an attempt to stay even with their foreign competition. Others just leave and become that foreign competition. But, where they go is as varied as their businesses.
That's why I urge anyone thinking about moving offshore or investing large sums of money offshore, to learn as much as possible, before making a decision. There is no one easy answer for every company with a certain level of income. That's why I am constantly urging people to develop an exit strategy, even if they never plan to use it. That way, should things happen to get bad enough, you have already done your homework and don't need to waste time trying to determine just which country is best for you. The reason for that is because if that time should come for you, you probably won't have time to learn and do everything that you need to do before leaving.
But, count on it. With over 100,000 wealthy Americans leaving every year, there must be something out there that is a damn sight better and safer than what they are offered here. In fact, things are getting so bad here that every month or so, another country passes the United States on the freedom scale. The phrase, "With liberty and justice for all," now seems to apply more properly to many foreign countries than to the United States. Don't be afraid to move offshore. Just do your homework, first.
I presume that you understand what that means if you had any money down in Argentina today...
I am interested in the idea that to compute VAT you would add sales and subtract purchases and tax the difference.
What you describe is a subtraction method VAT.
This differs from a corporate income + payroll tax how?
(sales - purchases) = (earnings + payroll) = corporate income + SS/Medicare wage base.
All you seek to do is take our current business tax structure & exchange depreciated capital expenditures for expensed capital expenditures.
The current corporate income/payroll tax structure now in place is a VAT, a levy imposed on businesses at all levels of production, passed on to the consumer hidden in the price of goods and services. It lacks only one small modification to make it conform to the European, WTO tax system.
Exchange depreciation for expensing, and be welcomed to the global government.
http://www.taxfoundation.org/foundationmessage03-00.html
" Under the WTO definition of the term, a sales tax is an indirect tax, as is an European-style VAT. The economic equivalence of an European-style VAT and a subtraction-method VAT is well-established. A subtraction-method VAT is essentially identical to a business income tax except that all purchases of plant and equipment may be expensed, rather than depreciated as under current U.S. law.
As Glenn Hubbard of Columbia University and others have argued elsewhere, the signal difference between expensing and economic depreciation is the time value of money, estimated in percentage terms at roughly 3 percent of the value of the principal annually. This means that for a relatively small amount of tax revenue, the U.S. could make its corporate income tax a WTO-sanctioned indirect tax. "
Definition [ http://www.encyclopedia.com/articles/13330.html ]:
value-added tax
levy imposed on businesses at all levels of production of a good or service, and based on the increase in price, or value, added to the good or service by each level. Because all stages of a value-added tax are ultimately passed on to the consumer in the form of higher prices, it has been described as a hidden sales tax. Originally introduced in France (1954), it is now used by most W European countries.
As if we needed to hide our taxes from the view of the electorate any more than they already are.
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, ... the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
The Honorable James DeMint (R-SC)
United States House of RepresentativesTHURSDAY, APRIL 5, 2001
12:00 noon"In 1996, Congress passed a historic welfare reform law that has dramatically reduced the number of Americans who depend on welfare. In spite of this positive development, Representative DeMint is concerned about the steady growth of a welfare/entitlement state that extends well beyond the poor and is forcing millions of middle income Americans into dependency.
There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy.
70% of the public clamors for more from government, believing someone else is footing the bill.
And you wish to perpetuate the tradition:
Sir Alex Fraser Tytler (1742-1813). Scottish jurist and historian:
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.
I would be happy to support a VAT if they would eliminate the income tax. The only new tax suggestion I don't like is the flat income tax.
jadimov, hate to be the one to inform you, but the problem, is that "flat income tax" is a VAT.
A VAT. is called a consumption tax because ( Consumption = GrossIncome - Investments). And the tax is calculated by multiplying the rate times (Gross sales receipts less production purchases and wages paid)
Folks, that is the essential methodology of the "INCOME TAX."
Labels can be deceptive when one does not look behind the smoke screen.
None other than the father of the flat tax, Robert Hall of Stanford University (along with Alvin Rabushka), in his 1995 Ways and Means Committee testimony said, "The Hall-Rabushka flat tax is a value-added tax."
Which was pointed out again in additional hearings in April of 2000:
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
| In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
CONSUMPTION TAX PROPOSALS; 1996 Deloitte & Touche LLP
The Flat Tax is a VAT even as the current income/payroll tax structure now in place is a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services.
As long as government is able to play a shell game with hiding taxes from the Voter(i.e. individual) it can rely on the old maxim:
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
and keep right on growing without bound.
"I presume that you understand what that means if you had any money down in Argentina today..."
Argentina is a non-issue, as regards the vast majority of expats. I know many expats in several countries and I can assure you that none of them would have had money invested in Argentina. After all, Argentina is not now and never has been considered a haven nation.
Primary haven nations for American expats are nations such as:
Those are just a few. But, it demonstrates the type of mostly stable countries where most American expats are investing. Also, most of those countries, with one notable exception, rate higher on the various freedom scales than the good ole US of A.
I did include Panama, because some wealthy Americans, who are still here, put a portion of their money in Panama, because of the extreme secrecy of Panamanian Private Interest Foundations and the fact that it will be very difficult for the US government to make such vehicles illegal, without adversely affecting other foundations that they want to protect. Panama also has a very large expat community that helps fund the nation, so regardless of who is running the country, it behooves them to protect those expats.
I included Cuba, because there is tons of money being made there by Europeans, while US citizens are prohibited from such investments. It may be considered risky. But, most investors in Cuba only invest a small portion of their wealth there. Most investors do believe, however, that whoever is invested there when Castro dies will soon find themselves extremely wealthy. But, that will certainly not include any American citizens.
Nevis is primarily a banking center. It the smaller of the two islands that form the single nation of Nevis and St. Kitts. Nevis has very little commerce, other than banking. St. Kitts, on the other hand, has a small banking sector and more exports. Neither seems to offer enough to attract Americans to live there. Until recently, Nevis was one of the very best banking centers for privacy. But, last year, they did make some concessions to the totalitarian OECD. Still, they rank quite high as a banking center.
Notice also, that to US citizens, even high-tax jurisdictions like Canada and the United Kingdom are considered havens. That is because they don't tax the offshore income of their citizens, like the US does. But, the Inland Revenue of the UK is taking lessons from the IRS, so the UK may not last long as a haven for Americans. After all, most wealthy expats are more concerned about privacy than taxes.
The best general advice seems to be to spread your wealth around, thus eliminating the possibility of losing everything due to a single event. But, that only works if you are not a US citizen. Remember, as a US citizen, your money isn't safe anywhere, if the government wants it.
So you see, offshore isn't really so scary, after all. It only requires a little common sense.
Should we sacrifice ourselves to the nation? If we do so are we not its slaves? Those who claim it is immoral to keep what one has earned also believe in the phrase "from each according to his ability, to each according to his needs". Where do we draw the line and who decides where that line is drawn? That which exists in the United States does not belong to the government. It does not belong to the people collectively. It belongs to individuals. The government belongs to those individuals. It was created to protect us from the very sentiments you have voiced.
And if I may say so, it is not doing its job.
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