Best Country for Trading (Tax efficiency)

[Swan Noir]

The fact is there are a large number of venues where you can trade either tax free or virtually tax free. There are also corporate and other structures that exist to get to your goal.

BUT NONE OF THESE VENUES OR STRUCTURES COPE WITH THE FACT THAT US CITIZENS ARE OBLIGED TO FOLLOW US TAX LAW OR POTENTIALLY SUFFER CRIMINAL PENALTIES.

Why bother focusing the conversation on the laws of other jurisdictions? Unless you are prepared to solve the problem created by your US citizenship first it is too early to look at the pretty pictures in travel brochures.

 

[Lethn]

It shouldn't be a problem if you're a citizen of said tax-free country, the only issue I have is that some of these carribbean Islands don't even have high speed ISPs unless of course there's something I'm missing completely.

 

[dandxg]

Quote from Lethn:

It shouldn't be a problem if you're a citizen of said tax-free country, the only issue I have is that some of these carribbean Islands don't even have high speed ISPs unless of course there's something I'm missing completely.

This has been covered before if you search ET for Pacific Fiber Ring.

Panama, CR, and 1st world island are fine. DR not so good either from a power or internet standpoint.

 

[Lethn]

Hmh, I'm planning on actually living in a income tax free country though so I'm not sure. I think I'll need to do some independent research, miles away right now but nothing wrong with preparing

 

[ET873]

Quote from TraderZones:

#1. Worry about becoming seriously profitable first. A lot of these "renounce your citizenship" come with a lot of longterm unexpected impacts on them. For example, what kind of job would you expect if you move to the Bahamas and gave up your citizenship?

99+% of would-be traders will be breakeven, losing money, making modest amounts, or giving up in the near future anyway.

#2. If in USA (Canada? elsewhere?) Put your money into an IRA. You can trade many things into this, and not worry about taxes ever (Roth) or until later (standard IRA), and stay where you are.

Yes, worry about becoming seriously profitable first then later figure out how to keep more of what you earn (tax-efficiency). You would only move to the Bahamas and give up your citizenship if you already have enough money to live comfortably on for the next 60 years. In that case, your trading is your career and if something happens that causes you to lose more than you win, you simply stop, do something else, or figure out what went wrong.

Can you high-frequency trade with a Roth IRA?

 

[ET873]

Quote from Hombre:

I don't think so, that is just an urban myth or a scam.

If " easy " means pay up to $100,000 and wait 3-5 years that i can believe.
However , as long as you keep US citizenship, you are taxed anyway.

Once the money is outside the US in a foreign account, how would the US know about it? If they don't know about it, you simply don't report capital gains in a foreign account.

 

[ET873]

Quote from Swan Noir:

TZ has it all correct. Work toward sustained profitability (not 90 days of "good luck") and, once you have real confidence in your methodology look at a Roth IRA.

A Roth has the risk of the government reneging on their commitment to not tax but at worst they will impose a levy (almost certainly less than the tax rate at the time) and you will still be way ahead.

Do not look for zero taxation or absolute certainty look for a good bet on tax efficiency. For many, Roth is that bet.

I don't think so. I didn't create this thread purely out of the tax efficiency question. It's also about questioning whether the US is really the best place to hold ALL of our assets going forward. The US is one of the very few countries that taxes people based on citizenship and not by where they actually live. Does that scare anyone else? It's like being in a mafia family, they want a piece of the action no matter where you go. Furthermore, I think a lot of people are uncertain about where this country is headed. We have an increasing percentage of the population who do not want to work and only wants to live off of others. They want what we have. These people would have been weeded out by natural selection 100 years ago, but today we have programs to ensure they remain well-represented in the population. I am not talking genetics or biology, I'm talking about culture. There's a growing culture of people who are perfectly happy living off of others. The political system is well aware of this fact and they manipulate it for votes. All that matters is gaining the majority of the vote and since we have an increasing population of people who want wealth redistribution (currently done through massive government spending which will inevitably translate into higher taxes for some), because I guess it's "unfair" to be wealthy, then someday perhaps all a politician needs to do to get elected is say, "90% tax on the wealthy and Spanish will be recognized as a second national language". Anyway, I am going off on a rant here, but the point is, I think it's wise to begin looking at diversifying our securities outside of US control for reasons of safety as well as tax efficiency.

 

[ET873]

Quote from TraderZones:

And there is similar risk that fleeing to a banana republic or another country will wind up taxing you or other problems, anyway.

Take a look at Venezuela and Chavez. This is what you can get in a tax haven or foreign country. Take a look at Rhodesia and other African countries, where whites had their farms nationalized. Sarajevo had the Olympics. A decade or so later, the country was wracked with war as it disintegrated. Look at what happened to Argentina.

Right or wrong, a tax refugee who gives up their US or western citizenship trying to save a few bucks is a very misinformed individual.

If anything, having dual citizenship is a good thing. People go through the wringer cycle, trying to get US citizenship. Maybe they know something the tax refugee has failed to consider.

Yeah, there are some countries which are worse than the US. I never argued against that point. But there are also some countries that allow you to keep more of what you earn. What about the Bahamas?

 

[ET873]

This plan is actually illegal, but I don't see how one could be caught. So I am not recommending that anyone do this, just throwing it out as a thought experiment:

You renounce your US citizenship and get citizenship in a country with no capital gains taxes. You setup an account there, but never leave the US. You continue to live here and have a family member buy or rent a place where you live. You live someplace where you can get all your groceries on foot so you don't need to drive. You continue to trade from your residence. Disadvantage is that you would not be able to take a flight out of the US unless perhaps you charter your own plane. You would also need to do this while in good health as you might not be able to get health insurance, although Obama will probably soon change that. Americans are pretty picky about privacy so unless you do something wrong, I don't see any place where you would need to show ID. There are hundreds of thousands of illegals who have been living in my state for years.

 

[TraderZones]

Quote from SNYP40A1:

Once the money is outside the US in a foreign account, how would the US know about it? If they don't know about it, you simply don't report capital gains in a foreign account.

:eek: This isn't 1971. :eek: