Quote from Ghost of Cutten:
Ok here's another point against expatriation - your after-tax earnings are a function of two variables: your tax rate, and your pre-tax earnings. You can boost after-tax earnings either by reducing your tax rate, or increasing your pre-tax earnings.
One nice thing about 1st world countries is they contain the world's leading financial centres. Perhaps you ought to consider the possibility of finding collaborators to boost your trading results, or raising investor funds to scale your edge and boost income via performance fees.
I think the residence of the world's millionaires show that the gains to being 'in the system' actually more than offset the higher tax burden in those areas. So paradoxically, it may actually be much more profitable to pay higher taxes in places like NYC or London, than it is to trade tax free in Monaco or the Bahamas.
Finally, the idea that some offshore tax haven is more free than a 1st world country is a joke. Taxes beyond a certain point are certainly a restriction on freedom, but there are significant freedoms that are non-monetary that are just as valuable if not more. No society can tax its citizens so highly that they cannot make an honest living and afford to live, so there is a natural limit on them. The same cannot be said about restrictions on other freedoms - we see across the world that free speech, voting, gun rights, sexual liberties, usage of narcotics and stimulants, property rights, and other freedoms are oppressed indefinitely.
A tax rate of 15-35% is not a massive infringement of liberty. Obviously any pro-liberty person would prefer it to be at the lower end or below. But let's not act as though this is the 1930s or 1970s with confiscatory tax levels.
I find you observation incorrect.
We have had a collective out flow of millionaires out of high tax countries (including the U.S.) - the increase in residency in Switzerland, Monaco, Andora, Hong Kong, Caribbean, and a host of other nations state that those with higher income move.
Those that don't move out of the U.S. have complex tax advantages. Check out how many major US companies are domiciled off-shore - lots.
Sure we have new millionaires every year, but as far as flow - it is out-flow not in-flow.
Think about the migration problem. You don't have wealth Swiss trying to obtain residence in this country, you have poor people. Migration is a combination of opportunity and taxes.
Corporate U.S. has been moving out of this country for years in search of cheap labor, less hand-cuffing regulation, and of course lower taxes.
The U.S. has one serious difference between nations of the world. The U.S. is the only nation that taxes you on your nationality and not residence. If you are a U.S. citizen no mater where you live, you still have to PAY U.S. taxes (minus the initial off-setting amount). That is double taxation.
If you are Swiss, German, UK, of most other nations you do NOT pay tax back to your national country if you reside abroad, you pay taxes based on residency.
The reason that Dart and other wealthy people give up citizenship is to avoid the national taxation law. If they instead used the residency system that the rest of the world did, you would not have the exodus of expatriation.
